Dark stores – the future of retail

Dark stores - the future of retail

According to the Financial Times, it is estimated that by 2023 the global e-commerce market will reach $ 6.5 trillion, totaling 22.3% of total retail sales. As internet access and adoption increase rapidly worldwide, the number of digital shoppers continues to grow each year. In order to meet the growing number of demands and to respond to the challenges caused by the workforce deficit, retailers are constantly looking for new ways to automate and optimize their business.

A solution that developed massively during the pandemic and is starting to grow in Romania, is the transformation of physical stores into dark stores.

What are dark stores and what novelty do they bring to the e-commerce model?

A dark store is a physical location, a retail distribution center, or a point of sale, dedicated to fulfillment operations. Generally, it is an extended warehouse that can be used to facilitate a click and collect service through which a customer collects or receives an order placed online.

These distribution centers are not open to visitors, thus allowing more space for the store’s inventory and to honor orders quickly and accurately. Dark stores offer buyers multiple resources and options that enhance the sales experience: home delivery, same-day delivery, or picking up from the store.

Dark stores benefits 

In addition to being a way to reduce costs, optimize the supply chain and stimulate online shopping, dark stores also offer a number of benefits that are not found in a conventional point of sale.

Quick and contactless shopping 

The need for social and safety measures has created the need and demand for contactless shopping. Dark stores allow consumers to buy from a store without having to enter it. They can place their order online and either pick it up or receive it shipped. In this way, dark stores combine the safety of online shopping with the (almost) instant satisfaction of receiving the order much faster.

Improved distribution and faster delivery 

Turning physical stores into dark stores is a smart way to efficiently speed up order fulfillment, by including a variety of distribution options and by physically bringing products closer to consumers.

Larger audience and wider coverage 

Turning a physical store into a dark store opens the door to a much larger potential audience because the products of your store are now accessible online for everyone, 24/7.

Improved SKU management  

Food retailers gain an important advantage from opening a Dark Store. One of the reasons is that Dark Stores improves SKU management by optimizing storage space and click & collect capabilities. There are almost as many SKUs in the food industry as there are customers, so this is a big win for these retailers.

Easier to manage perishable products 

Another reason why food retailers thrive by implementing the dark store concept is that it solves the challenge of perishability. The delivery of fresh food requires impeccable control of the warehouse and efficient fulfillment of orders to minimize the time spent by a product from the moment it is taken out of the refrigerator until delivery.

More ePossibility to store a wider range of products

Because customers cannot enter dark stores, their appearance can be optimized and planned for more storage space and efficient product selection routes. Improved storage capacity means the availability of a wider range of products, and an optimized route for collecting orders as well as finding products without delay, which translates into more orders delivered.

Improved inventory control and management 

In some cases, a dark store may serve the delivery of products belonging to several stores in the same geographical region. Because these warehouses are customer-free areas, you can better control your inventory and manage larger order volumes.

Although the transformation of physical stores into dark stores began before the pandemic, as a way to reduce costs, optimize the supply chain and stimulate online shopping, the evolution of the e-commerce industry seems to push this concept to a new stage. Retailers who recognize and adapt to the constant changes in market behavior are the ones who will win the hearts of tomorrow’s customers.

If you are looking for a partner to help you understand how to make the most of the new e-commerce landscape, optimize your warehouse processes to save time, improve your performance and increase your profits, IT Genetics is the partner you are looking for.

IT Genetics employs teams of professionals with extensive expertise and over 15 years of experience in providing and integrating specialized IT solutions for logistics and warehousing. Throughout our professional journey, we have successfully delivered hundreds of projects, using the transformative power of automation to drive business to success.

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