The term dark store refers to a retail distribution centre or outlet that caters exclusively to online shopping. It is generally a large warehouse that can either be used to facilitate a collect-and-click service or an order fulfilment platform for online sales. Some are automated and therefore don’t need lights, giving the concept its name.
The format was established in the United Kingdom, and its popularity has also spread to France. In India, dark stores have primarily been small warehouses or neighbourhood fulfilment centres serving the objective of on-demand fast deliveries primarily in a D2C (direct to consumer) model.
The current pandemic situation has toppled the traditional retail business in a big way. The ecommerce was mostly ruled by electronics and apparel retail until recently.As online shopping skyrockets during the coronavirus pandemic due to the wide-ranging restrictions limiting the number of shoppers inside physical stores, there is a paradigm shift in which the companies are racing to refine their storage and distribution processes, increasing the demand for so-called ‘dark stores’.
The Dark Store Advantage
- Additional Capacity
It gives the retailers the ability to pack, deliver and pick goods in areas with high order density. They save real-estate costs by steering clear of high traffic zones in the towns.
- Full Range of Items
Unlike a typical store, they have a full range of items. Also, they do not have to bother about the shopping experience and display or in-store advertising. Dark stores can accommodate much more variety per item at a much lesser space cost. Online dark stores open up chances for retailers to sell new goods that consumers would not find in store outlets because of space constraints.
- Great Availability
Online dark stores also offer great availability. As their operations are dedicated to fulfilling orders that are made online, they have a much clearer view of stock levels and therefore have better product availability than a pick-in store fulfilment solution.
- Increased Efficiency
Aside from that, they have increased efficiency as well. The stock managers and pickers can manage order fulfilment by dedicating the much-needed time, space, and visibility which is tough to achieve in a packed store. With the adoption of more technology they have the capability to increase the number of units that are delivered while at the same time driving a more efficient operation. They manage stock rotation excellently leading to enhanced quality.
- Improved Picking Accuracy
These stores also have improved picking accuracy. This is because the technology used ensures that the conveyor belts do not move groups of trays to the next station for picking unless the right goods have been scanned. This leaves little room for picking error. Additionally, if merchandise is out of stock, the system automatically identifies a perfect substitute instead of leaving this to the discretion of the picker.
- 24/7 Operation
As they are not restricted by opening hour regulations that are imposed on stores, online dark stores can operate 365 days a year around the clock. Orders can be delivered at the most convenient times for customers.
E-commerce Market size - India
In short, space and time optimization, real-time visibility, and efficient supply chain together make dark stores a much financially viable option to do retail grocerybusiness to meet the demands of the ever-increasing e-commerce market.
The pandemic has forced the consumers to become comfortable with the experience of shopping online, and many may not go back to their traditional habits. So, Dark stores will play a key role for grocery retail and are here to stay.
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