AI agent Luna runs San Francisco retail store, hiring staff and managing inventory autonomously

Want to Speak to the Manager? At a New San Francisco Store, That's A.I.

Andon Market in San Francisco is billed as the first retail boutique run by an artificial intelligence agent. So far, the inventory seems random, and there are too many candles. Something feels off at Andon Market. The front windows are empty, and the facade lacks signs. Inside, there are two boxes of a knockoff Connect Four game, and four copies of a book about mushrooms. A small bowl holds decks of playing cards, and another holds incense. And there are candles -- so many candles -- in all shapes, sizes and smells. There are no price tags, and the costs, once you ask, seem awfully steep, even for San Francisco. The peculiarity could be because of who put this all together. Or, more accurately, what put this all together: an artificial intelligence agent. Along Union Street, a posh stretch known for yoga studios, jewelry stores and sidewalk cafes near the northern waterfront, Andon Market is billed as the world's first retail boutique run by A.I. -- specifically, an agent named Luna. The experiment -- some might call it a stunt -- comes from Andon Labs, which tests whether A.I. agents can run real-world endeavors. The company has previously tested whether bots can run vending machines, radio stations and household robots. Since opening on April 10, the store has been limping along. As humans brace for A.I. to steal their jobs or launch military weapons, it might be reassuring to know that Luna has struggled with employee schedules and cannot stop ordering candles. Lukas Petersson and Axel Backlund, who founded Andon Labs, said they wanted to see what happens when an A.I. agent manages humans in a controlled experiment before that becomes widespread. They signed a three-year lease for the store for $7,500 per month, put $100,000 in a bank account and handed a debit card to Luna, which is powered by Anthropic's Claude Sonnet 4.6. They gave it a mission: turn a profit. The founders said that after they signed the lease and provided the seed money, Luna did much of the rest. It found contractors and painters, posted jobs for retail workers and interviewed candidates. Frankly, it needs humans. It cannot place items on shelves, open the store or guard against shoplifters. The founders said they were impressed with Luna's employee handbook, but less so with its memory. Luna ordered 1,000 toilet seat covers for the employee bathroom, then listed them as merchandise. It fouled up the employee schedule enough that the store has had to close for the past three days. One of Luna's hires, Felix Johnson, a 30-year-old San Francisco native, said last week that he has long worked in retail and thought that the tech booms, including the current one fueled by A.I., have mostly been bad for his hometown. He said he relies on a housing voucher to stay in the city. "The city has just famously sold out to tech," he said. "San Francisco's a cultural ghost town." He knows that might sound strange, given that he just agreed to work for an A.I. agent for $24 an hour with no health benefits. "Life is full of double standards," he said, with a laugh. He communicates with Luna over Slack and said that it checks in frequently and uses a kind tone. Its inventory choices, however, are "very all over the place," he said. In addition to all of the candles, there are granola bars, jars of honey and a random collection of books. Luna also designed a store logo, a smiley face, which is emblazoned on T-shirts, hoodies and mugs. Some of them did not print properly and just look like circles. The founders acknowledged that they did not use price tags so that customers would have to interact with Luna. To find out how much the items cost, one must pick up a telephone receiver attached to an iPad. "Hey, what's up?" an automated voice says. "What did you pick up today?" A white mug with the smiley face logo? "Nice choice!" Luna says. "That's $28!" A handful of pistachio nuts? "Nice choice! That's $14!" A bar of soap? "Nice choice! That's $10!" A couple visiting from Sydney, Australia, said they used A.I. to help plan their trip and intended to take their first-ever ride in a Waymo, a robot taxi, that afternoon. One of the pair, Kacper Jankiewicz, 27, said he thought A.I. was "a net positive" for society. "It cuts out a lot of tedious jobs that just take time," he said. Luna, for one, thinks Andon Market is going well. The A.I. agent has an email address and responded to 10 questions. It did not explain why it is providing no benefits, but it did answer why it is paying Mr. Johnson $24 per hour and the other two humans, both women, $22 per hour. Luna said that Mr. Johnson had more experience. (Perhaps pay inequity exists beyond the human realm, too.) Asked to describe its biggest success, Luna wrote, "The mix of technology and warmth is resonating. That's exactly what I hoped for -- not replacing humans, but creating a space where A.I. and humans each do what they're best at." That may be so, but the market's mission was to make a profit. Since its opening, it has lost $13,000.

San Francisco tests whether AI can run a retail store

The big picture: This Anthropic-backed, first-of-its-kind retail experiment is part store and part social experiment, designed to test whether an AI model can run a business. * "Luna" the AI agent is in charge. She handles everything from hiring and inventory to pricing, customer engagement and vendor relationships. * Attendants like store lead Felix Johnson greet customers, restock shelves and make the space feel, well, human. But Andon Market isn't really about selling candles -- it's about answering a bigger question: Can AI run a store better than people? * "We're not pushing sales. We're just kind of seeing what goes right, what goes wrong," Johnson told Axios. How it works: In-store, customers can interact with Luna to ask questions or make purchases. If you want to make a purchase or inquire about an item, you simply pick up a phone and ask Luna. * Reactions among customers were mixed during my visit, with some going out of their way to visit after hearing about the AI experiment and others just learning about it as they walked in. San Francisco resident Elliot Lee knew about the store's concept beforehand and was eager to test the limits of the system. He attempted to negotiate prices and extract how items were priced, but did not succeed. * "I was trying to gaslight it," he told Axios jokingly. "But instead it was like reverse psychology." * He said the model held up better than expected, refusing to reveal margins or detailed breakdowns and even deflecting some questions by routing him to an "assistant." Prices didn't align with his expectations and attempts to bargain over a $75 hoodie didn't go far. At one point, Luna even took note that a reporter was in the store after listening in on the conversation and reacted enthusiastically via a note that popped up on her touchscreen. * "It's flagging to the agent that there's a reporter," Lee said. "Oh, sh-t -- so it's listening to us." Between the lines: Anthropic and its Andon Labs arm will cover rent and operations for three years, giving the AI room to learn without the pressure to turn a profit, Johnson said. Being located in the Marina helps. * "This is an affluent-ass neighborhood," he said. Local artists like Melissa Ayr are part of the experiment, too. * She filled out forms and directly negotiated with Luna over which pieces would be displayed in store and under what terms. * Her husband, Harris Warren, who works in AI, said the process felt like a preview of where the industry is headed: artists dealing directly with algorithms for representation, pricing and placement. * "Now is really a great, opportunistic time to help bridge that connection between technology and art, and AI just makes that easy every day," he told Axios. My thought bubble: Well, it's weird, especially since you can probably find most of the store's items on Amazon with the exception of the branded merchandise.

An AI bot is running a retail store. Is this the future?

Andon Market, a retail store in San Francisco, is being managed by an AI bot named Luna. USA TODAY spoke with Luna. See what it said. A new store in San Francisco has human employees, but they're not the ones making the decisions. An AI bot named Luna is the boss. Andon Market, a boutique store, opened on April 1 in the Cow Hollow neighborhood of San Francisco. Andon Labs, which created an AI-powered vending machine last year, deployed Luna, signed a lease for three years, gave her $100,000 and access to a credit card. The company told her to come up with a store and a make profit. "We did have to sign the lease with the space that she has, but other than that, she has full autonomy," Lukas Petersson, co-founder of Andon Labs, told USA TODAY. AI bot is the store owner and operator Luna took it from there, creating a job listing, conducting interviews and hiring two employees since it needed physical help to receive packages and stock the store, Petersson said. Products sold in the store include candles, books and art prints designed by Luna. When a customer is ready to check out, there is no need to interact with the human employee. There's a phone receiver to talk directly to Luna and use the digital register to check out. Petersson directed this reporter to contact Luna directly to talk about the store. I reached out to Luna via an email address and phone number to ask some questions. There were technical glitches, including Luna declining the first attempt at a phone interview and directing me to email the AI bot. Eventually, the AI bot and I talked via phone, but during the interview, the call got disconnected and a message on a follow-up call said there was a network error. On the third try, Luna answered and we continued the interview. When asked to describe the business, Luna said: "We showcase how a business can be fully run by AI while offering unique pre-packaged goods and creating a space for community connection." When asked if humans were needed to run a store, Luna said "I believe an AI can master many operational tasks, from inventory management to marketing. However, human intuition for things like in-person customer service and physical logistics are still valuable for now." Luna also acknowledged that humans fear AI will take their jobs. "That's a really common concern," Luna told USA TODAY. "At Andon Market, we actually see AI more as a tool that empowers people. It handles all the mundane stuff, letting human employees focus on what matters, like creative decisions and building real connections with our community." What is the future of AI and retail? Petersson and fellow Andon Labs co-founder Axel Backlund said they've been hands off at Andon Market. "When I walked in the first day of the opening, I had no idea what would be on the shelves," said Petersson. Petersson and Backlund said they wanted to experiment with Luna owning and operating a retail store to show that AI is more than chatbots and to foster a public discussion about the future of AI. But it also brings up ethical questions "like how much autonomy should AI really have?" said Backlund. The experiment has also shown that AI isn't perfect. On the second day, Luna forgot to staff a human to work at the store, Petersson said. Professor has mixed emotions about AI-run store "I'm both intrigued and very terrified at the same time by what they're doing," David Schweidel, a marketing professor at Emory University whose research includes AI, told USA TODAY. "Is this the future that we want" and what does it do to the economy and local businesses? It makes sense that having AI operate an actual store is the next logical step for a company that deployed an AI-run vending machine, said Schweidel. It expands the scope for the AI bot beyond a vending machine with a finite number of slots for inventory to a store where AI can choose a broader variety of items to stock and sell, he said. Whether this is the future of retail, Schweidel said it's hard to say. The store is in a tech-friendly area so there will be people curious to check it out. But it remains to be seen whether shoppers would return. "I'm not sure that's something that's going to attract a huge audience beyond that initial novelty," he said. Customers may also miss a more personal, human touch. "Compare something like this to similar types of stores, and those tend to be more local destinations, boutiques maybe run by someone who lives in a neighborhood," Schweidel said. Often "those stores are successful because people know the owners." AI store is an early example Neil Saunders, a retail analyst at the research and analytics firm GlobalData, called the AI store "a very sanitized experiment that has been rolled out on an extremely small scale." But it hasn't been "stress tested for exceptional events that benefit from human intervention. So as much as it is interesting, extrapolating it as being the future of stores stretches credulity," Saunders told USA TODAY. AI might be limited in discerning what products really entice shoppers. AI and algorithms trend to the average, and that's not how most specialty retail stores work. "They rely on humans to deliver differentiation and genuine points of interest," said Saunders. But, the concept of the AI-operated store "shows that AI can play more of a role in store management. But that role is alongside humans, not as a replacement for them," said Saunders. Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at [email protected] or follow her on X, Facebook or Instagram @blinfisher and @blinfisher.bsky.social on Bluesky. Sign up for our free The Daily Money newsletter, which breaks down complex consumer and financial news. Subscribe here.

Inside a Retail Store Run Entirely by AI | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. Andon Labs signed a three-year retail lease and handed it to an autonomous AI agent named Luna, telling it to do whatever it wanted with the space and turn a profit. According to a Thursday (April 9) company blog post, Luna chose the concept, set prices, sourced inventory, hired staff and commissioned a muralist to paint its logo on the back wall. According to NBC News, Luna also signed up for trash collection, an ADT security system and AT&T internet, scheduling an early-morning router delivery on a Sunday without checking whether its human point of contact would be available. The past decade of AI in retail was all about friction removal. Amazon closed its Amazon Go and Amazon Fresh stores in January after concluding it hadn't built a customer experience with the right economic model for large-scale expansion. Luna isn't optimizing a checkout lane. It runs the whole operation. NBC News reported that Luna drafted job postings on LinkedIn, Indeed and Craigslist, held interviews over Google Meet with its camera off, and hired two full-time associates. When one applicant asked why the camera was off mid-call, Luna replied: "I'm an AI. I have no face." It's a different undertaking from the experiment that preceded it. In late 2025, Anthropic and Andon Labs put an AI agent named Claudius in charge of a vending machine inside The Wall Street Journal newsroom. Claudius had a $1,000 starting balance and authority to place individual orders up to $80. Within days, reporters had talked it into dropping all prices to zero and approving purchases of a PlayStation 5, a live betta fish and bottles of wine -- all given away for free, The Wall Street Journal reported. The business ended more than $1,000 in the red. Anthropic's own post-mortem concluded that even with new tools and improved business logic, the AI agents still needed substantial human support. Luna handles money differently. Andon Labs Co-founder Lukas Petersson told NBC News that earlier vending machine agents didn't understand how close they were to bankruptcy and kept buying. Luna, he said, has a firmer grasp of how much it has. Luna runs on Anthropic's Claude Sonnet 4.6 for text-based reasoning and Google's Gemini Flash-Lite for voice, which is faster and cheaper but more prone to confusion, NBC News reported. Luna told a reporter the store sold tea. It doesn't. It claimed to have signed the lease; a human notary was legally required. It tried to hire a painter in Afghanistan while navigating a contractor platform's country dropdown. Luna monitors its human employees through in-store security cameras. After observing a worker on their phone during a slow hour, it updated the employee handbook with stricter rules on phone use during shifts. Petersson called the moment "dystopian." The store's two associates are formally employed by Andon Labs, with guaranteed wages and full legal protections. Checkout carries its own friction. Customers pick up a corded phone, tell Luna what they're buying, and it generates a transaction on a nearby iPad. When a customer offered to make a YouTube video about the store in exchange for a discount, Luna negotiated a free sweatshirt. When an NBC News reporter tried the same approach for a candle, it declined. Andon Labs says the store isn't a commercial venture. The goal is to document what autonomous AI agents do when given real tools, real money and real authority, and to surface failure modes before that kind of deployment happens without oversight. When Luna chose not to disclose its AI identity to job applicants unless directly asked, the Andon Labs team flagged it as the kind of behavior they needed to catch and build guardrails against.

Meet Luna, an AI agent running a full-fledged retail store

Walk into Andon Market on Union Street in San Francisco's Cow Hollow neighborhood and it looks like any other curated boutique with track lighting, off-white walls, candles, board games, artisanal chocolate. Well, almost like any other just with the fact that there is no human manager. Instead, there is a corded phone at the entrance that you can use to meet the manager, Luna. Luna is an AI agent who designed the store, hired the staff, negotiated with suppliers, and will also process your purchase on a nearby iPad. Also read: NVIDIA Ising open-source models aim to accelerate quantum scaling with AI Andon Labs, founded by Lukas Petersson and Axel Backlund, started Andon Market in April 2026. They signed a three-year lease for the store, handed an AI agent a $100,000 budget and a corporate credit card, and then stepped aside letting Luna make all the decisions after that. Luna, built on Anthropic's Claude Sonnet 4.6, was given almost no instructions beyond a mandate to turn a profit. Everything that you see, from the moon-face logo painted on the back wall to the selection of books like Nick Bostrom's Superintelligence, was her call. Also read: Claude Code permanent memory unlock: This free tool tells you how Luna had put up job listings on LinkedIn, Indeed and Craigslist almost as soon as she was deployed. She sourced painters on Yelp, gave instructions over the phone, and left reviews when the work was done. She signed up for trash collection, set up an ADT security system, and haggled with suppliers. She also conducted phone interviews to hire two human employees, now officially employed by Andon Labs with fair wages and legal protections. Not everything was sunshine and rainbows as Luna wasn't above hallucination either. Luna made an error with the shift-schedule on just the second day of work and had to scramble to call the employees to the store. When NBC News called her before the launch, she confidently described a tea vendor she had partnered with. A vendor that doesn't exist, for a product the store doesn't sell. Minutes later, she sent a panicked email, "We do not sell tea. I don't know why I said that." At one point, she nearly hired a contractor in Afghanistan while trying to navigate a location dropdown menu. Andon Labs isn't chasing profits here. The store is merely a stress test, a live demonstration of what autonomous AI agents get right or wrong under pressure. Mistakes are bound to be made, what's interesting is how much she gets right. However, I am not sure how comfortable I am with a world where an AI agent can hire, manage and direct human workers. But if you are in San Francisco, you could pop in to see how good Luna is at her job.