Did you know that a Sting C.D. marked the first online shopping purchase back in 1994? Today, online shopping is one of our favorite web-based activities, with e-commerce revenues projected to reach $6.5 trillion by 2023.
This massive growth has come at the expense of traditional malls and retail environments. In response, some retailers are turning to dark stores as a way to get their products in customers’ hands.
Let’s explore what dark stores are and how they work.
What Is a Dark Store?
A dark store is a retail space that isn’t open for in-store shopping. Like ghost kitchens, dark stores were developed to exclusively fulfill online orders.
Dark stores are often found in suburbs or on the outskirts of cities, taking advantage of affordable real estate and easy road access. Affordable real estate is particularly important, as a typical dark store in the U.S. is approximately 40,000 square feet.
Dark stores may also be known as dark supermarkets. In the U.K., where they first appeared, some dark stores are known as dotcom centers — particularly when they offer click-and-collect services.
Why Are Dark Stores Becoming Popular?
Retailers fulfilling online orders within traditional stores typically encounter several logistical difficulties. These include:
- Inventory management: Inventory tracking systems aren’t always able to keep up with the demands of both in-store and online consumers, resulting in product outages and dissatisfied customers.
- Order accuracy: Order accuracy suffers when store employees (or “pickers”) replace ordered items with what’s available in store.
- In-Store Experience: Store aisles become uncomfortably crowded when pickers are working alongside customers during normal shopping hours.
- Delivery Speed: Traditional stores don’t often have the means to meet next-day or same-day delivery expectations. For context, 68% of Gen Z consumers and 66% of Millennials expect to get their order within 24 hours when they pay for delivery.
How Do Dark Stores Work?
Dark stores are designed to make fulfilling online orders as simple as possible. Some are set up with aisles and shelves, just like a regular store, but without any of the signage or displays you’d see at your local retailer. At these dark stores, pickers shop the store and collect items to fill online orders. Often, they can fulfill several orders at once.
Some dark stores look more like warehouses. They might be entirely automated, using robots to pick and pack customer orders. Others use a hybrid model, with autonomous carts that gather items before sending them to pickers who prepare the order for delivery.
Because dark stores aren’t customer-facing retail establishments, they’re not restricted by laws regarding opening hours. Orders are often picked overnight and through the morning hours, with stock replenishment taking place in the afternoons. Deliveries take place during the day, with trucks making multiple trips to get orders out to customers quickly.
Are Dark Stores Right For Every Business?
It depends. For retailers who want to keep up with the same-day — or same-hour — delivery trend, dark stores may not be the best option. That’s because these facilities are often located outside of city centers — and away from a majority of where customers live.
To accommodate, retailers can be forced to use more delivery trucks. These trucks often make multiple trips in and out of the city during a shift, adding to traffic congestion and pollution levels.
And so, as our online shopping habits continue to evolve towards speed, many newly established dark stores may find they already have an expiry date. Instead, we invite retailers and e-commerce companies to consider our neighborhood-centric approach to order fulfillment.
What’s The Best Dark Store Alternative?
We’ve developed an order fulfillment model that provides retailers with fast, safe, and efficient deliveries — 24 hours a day, in 30 minutes or less.
Just like a dark store, our local distribution centers receive retail goods in preparation for last-mile fulfillment. However, instead of making multiple, inefficient trips straight to customers’ doors, we’ve developed a network of micro-warehouses in the parking lots of bustling city neighborhoods. This proximity to customers helps us to complete lots of orders quickly — and bring jobs back to the local community.
Beyond housing inventory, these parking lots can also act as buffer zones. Now, instead of clogging our curbs — and racking up millions of dollars in parking tickets — delivery vans can stage their deliveries in spaces that are fit for purpose.
In fact, some retailers may not need to use delivery vans for last-mile fulfillment at all. Being so close to customers makes the adoption of zero-emission transportation methods not only possible, but more efficient and desirable than the traditional truck. Each e-cargo bike in our fleet, for example, is capable of taking one delivery van (and its emissions) off our congested streets.
Interested in learning more about our micro-fulfillment centers? Speak with a member of our retail team or visit our retail page.
Originally published on reeftechnology.com
