Are dark stores a good solution for online fulfillment?
Through a special arrangement, presented here for discussion is an excerpt of a current article from Commerce Anywhere Blog.
Toys "R" Us has been offering omni-channel (so sick of that term) journeys such as buy online/in-store pick-up for several years. Stores are also used to fulfill online orders, which becomes particularly important during the holidays. In both cases, a store employee picks product from the floor and move it to the backroom.
Someone from Toys "R" Us told me a funny story about this. You can imagine the chaos on the floor during the holidays, so when employees were picking items they were constantly being interrupted to answer questions or retrieve items from high shelves. To combat the issue, employees assigned picking duty did so without an official uniform. Yep, they had to wear street clothes to get the job done.
Some U.K. stores have found a hybrid solution in the "dark store."
Although online grocery shopping hasn’t yet taken off in the U.S., it’s quite popular in the U.K. Orders are fulfilled at a nearby store and delivered by truck. Pickers are given a large cart with separate bins for separate orders, and they use a tablet to efficiently navigate the store. With enough orders, you can imagine those customers slowing down the pickers. The grocery store layout isn’t really conducive to both types of foot-traffic. Thus the dark store was born.
Just as you might expect, the dark store has no customers and is used strictly for picking and fulfillment. Its location and layout are similar to traditional stores, but there are no price tags, no endcap advertising, and no checkout lines. It’s a neighborhood warehouse, complete with fresh, frozen and dry goods.
Sainsbury, Tesco, and Waitrose continue to open dark stores in the U.K., filling 4,000 online orders a day per store in some cases. I suppose this makes perfect sense in areas where order volume is high, like big cities. In the suburbs, it might be acceptable to leverage the existing store, perhaps with an express lane for crowd-sourced deliveries like Instacart.
Although I don’t know of any dark stores in the U.S., it wouldn’t surprise me to hear that Amazon Fresh and Fresh Direct are using them.
- Dark stores – Commerce Anywhere
- Dark Store – Wikipedia
- Inside the supermarkets’ dark stores – The Guardian
- Sainsbury’s to open first ‘dark store’ – The Daily Telegraph
- Are stores the answer to peak-time online fulfillment challenges? – RetailWire
Are dark stores a better answer to burgeoning demands for online fulfillment versus existing stores? What do you see as the pros and cons of picking from existing stores versus dark stores?