What is a Dark Store? The future of grocery and retail

The Rise Of Grocery Dark Stores: What Is A Dark Store & How Does It Benefit Your Business?

Dark stores are an exciting, post-pandemic fulfillment concept that is growing exponentially within the grocery industry. In 2020, many businesses were forced to reevaluate their customer acquisition strategies and come up with new ways to drive sales. Curbside pick-up and same or next day delivery became the standard and the difference between good or great service. Due to the demand in eCommerce, grocers and delivery services like Waitrose & Deliveroo have been moving to a hybrid retail model known as ‘dark stores’. So what is a dark store exactly?

Essentially, a dark store functions like a micro-fulfillment centre; there is no in-person shopping. Instead, orders are placed via an app, fulfilled by pickers at dark stores, and delivered to the customer’s home within minutes.

With the recent rise in eCommerce and decline of brick and mortar purchasing, dark stores are becoming the new method for driving sales and earning potential customers. This new concept is perfect for grocers, pharmacies and CPG brands interested in being leaders in the quick-commerce revolution. These hybrid dark stores combine the ideal scenario of 'curbside pick-up' for customers or riders, with the additional option of offering 15-minute delivery to your end customers.

So, How Do Dark Stores Work?

Dark stores work seamlessly with e-commerce stores or phone apps to fulfill the high demand of rapid delivery and on-demand order fulfillment. A dark store needs to be located within a certain km radius of its customers. This will help to fulfill the demand for rapid delivery and on-demand order fulfillment. It also enables brands to offer a seamless transactions from purchase to delivery.

Dark stores work around the clock and their fundamental operations can be undertaken with an advanced software system, like OrderGrid, a small team of pickers, and a store layout that is optimized for rapid picking.

Dark store order processing is very similar to order processing at a fulfillment centre or 3PL. However, dark stores operate on a much smaller and much faster level.

Step 1: Online or mobile app orders are instantly received & processed

Step 2: Orders are electronically sent to the dark store

Step 3: Employees pick orders displayed on a digital screen within 2 minutes

Step 4: Multiple orders can often be collected simultaneously

Step 5: Orders are packed in a few seconds

Step 6: They are ready for customers to pick-up and and riders to deliver

Why Are Dark Stores Becoming The New Trend For Grocers In The USA & Canada?

The pandemic has shaped the way consumers shop, and as a result, the way we structure our business models. Consumer hype is all about online shopping, and the convenience of curbside pick-up or same-day delivery is undeniable. This new standard of living gives grocers and retailers an opportunity like never before. For brands in the USA and Canada, the ability to capitalize on the 'dark store' model quickly will allow them to be leaders in the quick-commerce revolution.

Online shopping, contactless transactions, and instant delivery have become high in demand in the post pandemic era. The aftermath has created a surge in demand for online grocery and e-commerce. However, traditional online grocery continues to be plagued by slow delivery times, inconvenient delivery slots, high minimum spends and disappointing substituted or missing items which affects up to 80% of orders.

Dark stores are the solution to these issues and the answer for keeping up with the increasing pressure for on-demand delivery during the ‘quick- commerce' era.

To learn more about how you can set up a dark store for your business, contact us.