Why it matters:
- The global market for retail automation is expected to grow at a compound annual rate of $12.3%, reaching $35.58 billion in 2029, according to The Business Research Co.
- Leaning into the trend, VenHub stores are completely automated and are operated by two robotic arms that can dispense snacks, beverages, and other packaged goods and can be remotely managed sans employees by either retailers or entrepreneurs and investors seeking a passive income.
- Plans call for rolling the startup’s giant vending machine-like stores out to other retail segments, such as consumer electronics, pet supplies, and even luxury goods.
Automated technology startup VenHub has created what looks like a giant vending machine — but the company believes it could be the robot-operated convenience store of the future.
VenHub’s strategy is to expand its automated retail solutions worldwide across retail segments, from consumer electronics and pet supplies to luxury goods, providing labor-free venues that can operate around the clock and be managed remotely by retailers but also entrepreneurs and investors seeking a passive income.
Shahan Ohanessian, Co-Founder and CEO of VenHub Global, said the company has received an extraordinary amount of interest in its self-contained robotic stores, which debuted late last year. The company now has four VenHub stores in operation, including its flagship location at the LAX Metro Transit Center near the Los Angeles International Airport, with over 1,000 units primed to launch nationwide.
Ohanessian said he launched the company in 2021 with a vision for a completely automated retail concept.
“I wanted a store that was super customer-friendly and consistent,” he said. “I wanted a store that was smart and fast. I wanted it to be safe and secure, I wanted it to be open 24 hours a day, and I wanted it to be easily installed. I wanted it to be remotely managed with no employees. I also wanted it to be low cost of entry with high profit margins, and I wanted it to be in every vertical.”
The stores feature two robotic arms that fetch items from shelves and place them on dispensing platforms, which are then lowered into reach-in compartments where customers can grab them. Customers order and pay for their products via the VenHub mobile app.
The early iterations of the VenHub stores offer commonly purchased items such as snacks and other packaged grocery goods, beverages, and personal care products. The stores include refrigerated cases for cold beverages and perishable products.
The autonomous ‘unmanned’ stores market takes flight
VenHub’s new store design comes as the $19.6 billion global automated retail market is set to nearly double to $39.1 billion by 2033, fueled by tech advancements, escalating labor costs, and consumers’ increasing appetite for convenience and personalized experiences, according to a Retail Automation Report from the IMARC Group. And autonomous, or “unmanned,” stores like VenHub’s are projected to accelerate growth through 2033 and beyond.
VenHub’s concept also comes as automation is playing an increasingly important role in driving retail efficiency. A recent report from The Business Research Company predicted that the global retail automation market would increase in size from an estimated $22.39 billion in 2025 to $35.58 billion in 2029, or a compound annual growth rate of 12.3%.
I wanted a store that was smart and fast. I wanted it to be open 24 hours a day, and I wanted it to be easily installed. I wanted it to be remotely managed with no employees. I also wanted it to be low cost of entry with high profit margins.Shahan Ohanessian, Co-Founder and CEO of VenHub Global
“Major trends in the forecast period include adoption of blockchain for supply chain transparency, growth of autonomous retail solutions, deployment of augmented reality in retail, emphasis on sustainability, and expansion of voice commerce,” the report predicted.
The Venhub model: Selling its vending machine-like stores to both retailers and entrepreneurs
VenHub’s business model calls for building the stores and selling them for a profit while collecting ongoing SAS (software as a service) and maintenance fees. Plans also call for adding advertising banners to the stores that would generate additional revenues. The stores are available for purchase by individual operators for $300,000 each.
VenHub has already received interest from a wide variety of potential buyers interested in the concept, including retailers, entrepreneurs, investors seeking a passive income, and even a private gated community in Connecticut that wants a place where children can shop without leaving the local park. Ohanessian said he sees plenty of opportunity for growth, such as by selling VenHub stores to online-only brands seeking a relatively inexpensive way to establish a physical presence.
“We’ve been blessed with demand,” said Ohanessian, noting that some of the largest companies in the world have discussed buying the stores.
VenHub’s Amazon veterans tap innovation to solve challenges, like AI for inventory management
VenHub has a slew of patents for its automation and artificial intelligence (AI) technologies, and Ohanessian said his team, many of whom worked at e-commerce giant Amazon, are constantly working on new inventions. It uses AI to optimize its inventory levels for each location, learning from each transaction and also to teach its robotic arms — which the company calls “Barb” and “Peter” — to recognize each product and handle it appropriately.
Among VenHub’s innovations is the way the robotic arms can switch from having fingerlike grippers to using suction cups for items that aren’t as easily gripped, for example.
The company has had to tweak the technology throughout its development, Ohanessian said. For example, it was originally planning to use conveyor belts to deliver the products to customers but found they were not reliable and could not be built with redundancy — thus leading to the creation of the two robotic arms that can each do the work of the other if one breaks down.
“Every day there’s a challenge that comes in front of us,” Ohanessian said. “I am celebrating that because we’re solving something that’s never been solved in the past.”
VenHub currently has just one model of the store, but three additional models are in the works. The current design measures about 800 square feet — 22 feet wide, 10 feet deep, and 10 feet tall — and somewhat resembles an oversized vending machine, with its large glass window and rows of products waiting to be dispensed. Plans call for future versions of the store that are mobile and others that are modular to fit different space configurations.
Ohanessian said he also envisions applying elements of the technology to existing retail stores and shopping centers seeking more automated retail solutions.
“We think that’s the holy grail of the retail revolution, where we can take any store and convert it to a smart store within a few short days,” he said.
[Read more: How Brands Are Using AI to Optimize Digital Out-of-Home Advertising]
Venhub has been ‘profitable from Day 1’
The company has been largely self-funded, with the help of a small crowdfunding effort, and has been “profitable from Day 1,” he said.
To raise funding for further growth, the company is planning an initial public offering. VenHub previously had plans to merge with a SPAC (special purpose acquisition company), which some startups have viewed as a low-cost vehicle for becoming publicly traded, but Ohanessian said the company decided that its stakeholders would be better served through an IPO.
Ohanessian said the company is eyeing stepping up its manufacturing capabilities to meet increasing demand. It can currently assemble one store per week, but Ohanessian said he hopes to soon increase that to four stores per week.
He also hopes to soon expand VenHub to serve other retail channels, such as consumer electronics, pet products, and even luxury goods.
“The convenience store is the first vertical. It’s not the only vertical,” Ohanessian said. “Our goal is within the next 10 years or less to become the store of anything.”
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