A dark store model is a traditional retail establishment that operates only as a fulfillment hub. These warehouses are not physically available for the public to visit like a normal store. Hence, they free up valuable stock space and improve the speed and accuracy with which orders get processed.
Customers can find convenient services in dark stores, such as online shopping, same-day delivery, and in-store pickup.
This idea is not unknown, of course. Whole Foods Market, Target, Walmart, Bed Bath & Beyond, and the majority of major clothing shops have all employed variants of this method.
In this article, we’ll discuss the dark store model in detail.
How Does Dark Store Model Work?
All stores can benefit from using the dark store model. However, it must provide flexible delivery and pickup times to be feasible. Here’s how a dark store model works.
Most classic dark stores generally have a designated pickup location within the shop, close to the front door. This eliminates the need for shoppers to travel the whole dark store to get their package. Besides benefiting the bottom line, this also improves the shopping experience for the customer.
Fast order pickup is made possible via a convenient curbside service. Customers can place their orders from their cars and wait for them to get delivered by store staff. Not only does this keep customers safe during the epidemic, but it’s also very handy.
Home delivery has grown in popularity, particularly among small, independent shops. Customers may have their necessities, including food and water, delivered quickly and easily using this method. Making an online business and mailing orders out is another option for delivering to clients’ homes.
Suppose you don’t have the resources to set up a dark shop. You can still manage online order fulfillment and shipment by partnering with a third-party logistics provider.
How and Why Dark Stores on Rise?
E-Commerce had a tremendous upswing in COVID-19, with more people buying things online, using contactless payments, and taking advantage of on-demand shipping.
COVID-19 also highlighted the weaknesses in many companies’ extensive and complex worldwide supply networks. The pandemic also showed how a single company’s shutdown or even a little interruption might ripple and affect the supply chain, delaying orders.
Shops are uncertain about taking on the risk of distribution network delays due to rising demands for on-demand delivery. As a result, dark stores may help them thrive in the quick Commerce, or “rapid commerce,” age.
What Are the Benefits of the Dark Store Model?
Here are some of the benefits of a dark store model:
Quick Purchasing Without Interaction
An increase in both supply and demand for contactless purchasing may get attributed to the need for social distancing and security precautions.
Hence, customers can shop online with a dark store and either pick up or get their purchases delivered.
Faster Delivery Times and More Efficient Distribution
Dark stores are a clever method to speed up order fulfillment and improve efficiency by bringing items closer to a particular market region and using several distribution channels.
Better Reach and an Even Bigger Audience
Converting a traditional shop to an online-only one, or “dark store,” exposes your products to an infinitely broader audience since they are available to everyone with an internet connection.
Better Product Management
Dark stores are notably successful as grocery stores, earning the industry name “dark supermarket.” For example, dark stores can enhance SKU management by concentrating on storage and click-and-collect options. This enhancement is fantastic news for grocery stores since the number of stock-keeping units is almost equal to the number of consumers.
Easy to Organize Fresh Goods
The dark store idea has been quite successful for supermarkets since it eliminates the problem of perishable goods. However, perfect warehouse management and lightning-fast order fulfillment are essential to reduce the time between taking an item out of a store’s refrigerator and when it gets delivered to a customer’s home.
Better Storage Management
As consumers are not allowed in dark shops, you can organize the space to maximize shelving and selection efficiency. Plus, with more room for inventory and enhanced picking capabilities, customers can expect their orders to get delivered more quickly.
Better Inventory Management
Sometimes, numerous different businesses in the same area might share the retail fulfillment needs of a single dark store. However, having no customers in these facilities allows for tighter inventory management and the handling of higher-order quantities.
Why Are Dark Stores So Popular With Grocery Delivery Services?
Perishability and the necessity for many individual stock-keeping units are only two category-level challenges unique to the grocery industry. And, grocery eCommerce’s difficulty is not in placing the order but in fulfilling it and enticing consumers to return regularly.
But dark stores solve this problem.
In the SKU Challenge:
One customer wants a 6-loaf box of gluten-free bread. In contrast, another wants a full-size bag of multigrain bread that hasn’t been treated with pesticides or preserved with artificial ingredients. Due to the wide variety of shoppers’ preferences, many different stock-keeping units for a food item may exist.
Dark stores can enhance SKU management by emphasizing storage and click-and-collect features. In addition, they can save money on property by staying out of the commercial cores of major cities. The second benefit is that they will cut down on the need for a large physical location by simultaneously serving several online supermarkets.
The customers care not about the store’s atmosphere, displays, or promotional materials but help save space. Therefore, dark markets will carry a far wider variety of items for the same amount of space devoted to stock. Mistakes in e – grocery delivery are common, but they may be reduced or eliminated with better SKU management.
A Problem of Rapid Decay:
Products sold at supermarkets are subject to a wide range of expiry dates. And, they should all be dispersed in their ideal forms simultaneously. The crackers must remain whole, the drinks must remain in their containers, and the seals must hold.
A product’s freshness is at risk at every stage between when it’s produced and when it reaches the consumer’s plate. For this reason, it’s not as simple as picking an item off the shelf and dropping it in the shopping basket for later delivery.
To reduce the time it takes for an item to go from the store to a customer’s refrigerator, efficient warehouse management, stock restocking, and order fulfillment are required. Pickers need to move quickly to meet the demands of store fulfillment. It is challenging at a normal cheap grocery store when the aisles are crowded with consumers strolling with their shopping trolleys. But, dark stores solve this problem.
The Problem of the Short Delivery Window:
Most people who shop for groceries online purchase out of need or urgency. And, due to the short delivery window, stores face great pressure to deliver the order as quickly as possible.
Take the case of late-night online purchases that need to arrive early morning so that customers can plan their breakfasts for the following day. Physical supermarkets are not the sole option for fulfilling this need. Therefore, a dark store greatly solves this issue.
Benefits of Using a Dark Store App
The use of dark shops and micro-fulfillment centers is set to become central to retailers’ strategies for addressing supply chain risk. Here are some benefits of utilizing dark stores:
Convenient, no-touch purchases are now possible in dark stores.
Contact-free shopping has become necessary due to the need for social distancing and security precautions, both of which have been largely influenced by COVID. Consumers may purchase from merchants via “dark storefronts” without visiting the physical store. For example, a customer who places an order online can pick it up in person or mail it to their address.
Dark store apps improve the effectiveness of distribution and shipping.
Switching traditional storefronts into “dark stores” speeds up the process of fulfilling orders. And, last-mile delivery is improved by stocking items closer to a given market and offering several distribution channels.
There are more items on dark store apps.
Without customers to worry about, you can optimize the architecture of “dark” shops for speedy selection and keep more items on hand thanks to increased storage space. Meanwhile, internet availability at any time opens the door to a potentially enormous audience.
Managing stock-keeping units (SKUs) is simplified by retailers’ use of dark store apps.
The dark shop idea has great potential for grocery stores since its emphasis on storage and button features may greatly enhance SKU management.
Dark store apps are an efficient tool for stock management.
With fewer customers, businesses can better keep track of their stock and place more orders. In addition, several businesses in the same area can even share the retail fulfillment needs of a single dark store.
Is Dark Store Model Successful After Covid?
Yes, it will become a normal part of the retail environment and a useful resource for many companies navigating the current economic environment.
After COVID, stores may still need to maintain a social distance from customers who have become used to the ease of delivery and curbside pickup. To assist smooth over any disruptions and maintain the safety of both customers and staff, dark shops are a great option.
Is Swiggy Instamart a Dark Store?
Following the lessons of Swiggy Stores, a hyper-local distribution platform for grocery and other needs that shut down last year, Instamart plans to deliver goods in 15-30 minutes via a system of seller-owned dark stores.
Is Dark Store Model Profitable?
The profitability of a dark store model depends on various factors like location, products, etc.
From the retailer’s point of view, establishing dark stores is more cost-effective than establishing a specialized warehouse.
Does Dark Store Model Require Storage?
Yes, but very less.
Since consumers are not allowed in dark shops, you can arrange the space to maximize shelving and picking efficiency. And, with more room for inventory and enhanced picking capabilities, customers can expect their orders to get completed more quickly.
Why Is Zepto on Rise?
One of the hallmarks of Zepto is the speed and convenience of its transactional delivery. Delivery of groceries is guaranteed to arrive within 10 minutes, and the company boasts a median service time of 8 minutes and 47 seconds.
How Do Dark Stores Help Deliver Groceries Within 30 Minutes?
Dark stores deliver groceries very quickly due to the versatile distribution network. Unlike enormous warehouses on the outskirts of a city, dark stores are usually near the delivery point.
With the help of dark retailing, brick-and-mortar stores can ride the e-commerce wave instead of fighting it. While reducing overhead and increasing productivity in the shop, retailers can stand out from the crowd by offering customers a wide variety of products, flexible fulfillment choices, and lightning-fast order delivery.
While dark stores will undoubtedly develop into a wide variety of novel formats in the future, the current market owners will be in a prime position to reap the benefits of these developments.