Dark Stores: The Future of Retail

Customers expect instant gratification when they shop. That’s why many people prefer shopping in a physical store. They can find what they’re looking for, make a purchase, and carry it along. However, the pandemic has made this type of shopping experience more difficult to provide. As a result, many physical retailers, small and large, have adopted what is known as a “dark stores” strategy. They use their retail space to store a large amount of inventory, fulfil orders. They also provide more options such as quick delivery and same-day pickup.

What are Dark Stores?

Traditional retail stores that have been transformed into local fulfilment centres are known as dark stores. Grocery stores, clothing labels, and home goods retailers are among them. Their layouts are designed and optimised for retail fulfilment of online orders. Picking and packing of all the ordered items take place in the dark store. The customer either ship or pick up the orders. This gives retailers options for both local and outsider customers.

The COVID-19 outbreak has had a major influence on the retail industry. To allow customers to purchase from a brick-and-mortar retail store without visiting a store, businesses are turning to dark stores. They provide the space needed to fulfil orders for shipping or prepare them for pickup without requiring customers to enter a crowded store.

Why Are Dark Stores Becoming More Popular in the FMCG Industry?

The FMCG industry faces a lot of unique concerns such as perishability and the need for a large number of SKUs. Managing SKUs and tracking perishability in a traditional store can be a time-consuming task. Dark stores, on the other hand, focus primarily on click-and-collect functionality. They allow for better SKU control.

Dark stores are extremely efficient because they do not require a specific location or design for the shopping experience. They don’t need any space to display in-store advertisements. Furthermore, dark stores can serve multiple online retailers at the same time. Dark stores keep a large volume of goods in a smaller space. It facilitates easy picking and packing. Fulfilment of orders occurs in dark stores. It allows merchants to make the most of available space for easy picking. Instead of the customers, store pickers now walk the aisles to find the products required in the customer order.

Benefits of using Dark Stores

The advantages of using dark stores include the ability to serve local customers. And also to expand the customer reach at a lower cost. Here are a few reasons why dark stores are more than just a passing trend.

Stocking Space

Customers are not permitted inside functional dark stores. So, their layout can be designed to improve storage and picking capabilities. Improving storage capacity ensures a wider product assortment. Faster picking ensures that orders are filled more quickly without sacrificing order accuracy.

Stock Levels

Dark stores are significantly smaller than typical warehouses. So, it is much easier to keep track of inventory levels. Many dark stores also have Warehouse Management Software. It allows them to keep track of stock levels in real-time. This software also assists retailers in determining if they have too much inventory (known as “deadstock”) or not enough. This can result in stockouts. You can ensure that you always have an ideal level of inventory by streamlining the inventory control process.

Order efficiency

Dark stores can handle a big volume of orders because they are customer-free zones. So, pickers can also easily walk aisles without having to dodge shoppers and their trolleys. The activity is significantly faster than an end customer doing the same because the pickers are working on confirmed orders. And, they are more familiar with the layout. Dark store warehouse efficiency can be increased by automating fulfilment activities with the right technology, such as Warehouse Management Software (WMS).

Order consumption

Consumers are more likely to become long-term, loyal customers after they become familiarised with your brand’s speedy, trustworthy, and accurate delivery of items. Dark stores can easily provide customers with more delivery options. This results in increased sales and customer lifetime value.

Dark Store Order Fulfillment Models

For all types of retailers, dark store fulfilment is a strategic and productive alternative. However, to be fully sustainable, it should offer a variety of delivery and pickup options.  Below are the three most typical delivery options for dark businesses.

1. Home delivery

Home delivery has become more common, particularly among local shops. Customers will benefit from fast, convenient, and frictionless delivery, especially when it comes to essentials. However, home deliveries can also be made by starting an online store and shipping orders to clients who are located further away.

2. In-store pickup

Many classic dark businesses have a designated pick-up space located near the front entrance. Customers won’t have to walk through the dark store to get their product this way. This provides flexibility and reduces delivery costs.

3. Curbside pickup

Customers can quickly pick up orders with curbside pickup. It typically consists of designated parking areas where a retailer staff will bring out the order. So the customer does not have to get out of their vehicle. This not only provides customers with safety during the pandemic, but it is also very convenient.

Dark stores will be the new way to conduct business. But it will not be without difficulties and adjustments. Dark stores, especially in FMCG industries, may cause supply chain disruptions and require additional infrastructure. Extending the current delivery and pick-up options is insufficient. To be truly effective, stores must plan their entire dark store strategy and automate wherever possible. They can improve the consumer experience and provide easier access to essential items. It also paves the path for the future of retail.

Pyrops WMS provides a solution for multiple requirements associated with dark store operations. Some of them are real-time view of stock levels, picker route optimization, lot control, cycle counting. It also provides solutions to replenishments, EAN mapping, return management, pilferage management, SLA based order processing and many more.

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