Dark stores: how do they reinvent last mile logistics?
Published on 29 September 2021
They have the functionality of a warehouse, but the organization of a store. Although they began to appear before Covid-19, darks stores accelerated their development during the pandemic to become an important new link in urban logistics. Designed to deliver everyday shopping in less than 30 minutes, these customer-free stores offer an unprecedented response to the challenges of e-commerce agility for consumer goods. Jean-Charles Deconninck, Chairman of Generix Group's Management Board, explains this fundamental trend.
A very local service
In large warehouses, designed exactly like a store, pickers prepare the orders placed a few minutes earlier. In their virtual baskets, consumers can find all of their brand's consumer products, from food products (fresh, liquid, but also catering, bakery, pastry, butchery) to hygiene products. In less than thirty minutes, their shopping will be in front of their door.
Reduced delivery time for companies...
By increasing the number of points of access to a store, the capillarity of the customer approach becomes stronger. While drive-in stores are a means of suburban commerce, since they require the use of a vehicle, dark stores are extremely local, with a strong appetite for hygiene and mass consumption products. “With the dark stores, we meet the need for proximity and local products requested by consumers, confirms The President. The environmental impact is also very positive."
The administrative process is also becoming simpler: "We will treat the dark stores like stores, with more or less the same supply," notes Jean-Charles Deconninck, but without the constraints.” In a country with strong regulations, such as France, there is indeed a restrictive bureaucratic process, which dark stores allow to avoid. "In addition to that, e-commerce makes it possible to reduce the density in store. Useful lever in case of gauge for example, which we experienced this year."
…but above all for customers!
Thanks to dark stores, consumers are seeing a more diverse range of shops. “These stores offer a new distribution channel," says Jean-Charles Deconninck. They increase access points and encourage local commerce.”
And for customers, the days are getting longer! "Consumers have greater flexibility. They can now do their shopping at any time. Their time span of life is becoming more important."
A human-scaled service
As these stores without customers become more and more numerous, the question of the development of automation and robotization tools in this sales system is now being raised. But according to Generix Group's CEO, the picker's job should remain manual. “Dark stores are not very automated, he explains. Their surface areas are generally not large enough and the means are too complex and costly to be profitable. Automation is developing more at the warehouse and logistics flow level." This need for manpower offers an additional advantage: the relocation of certain types of jobs to cities.
A demand-driven development
It is possible that some traditional stores will be transformed into dark stores. Jean-Charles Deconninck predicts that "the density of local shops will remain as it is, because we are at a high level of saturation. Since it is difficult to find commercial space, the brands will probably convert some of their stores into dark stores."
As an example, Il Gigante, the leading retailer in Northern Italy and a specialist in fresh produce, has been using Generix Group's WMS and OMS supply chain management solutions to replace some of its outlets as dark stores since 2019. Indeed, the proximity of the operation of these stores without customers and that of the warehouses, particularly with regard to picking tasks, makes the use of WMS algorithms, optimizing order preparation and offering sharp visibility on stocks, quite relevant. Also supported by specific OMS tools, for precise personalization of product pushes and customer loyalty actions, dark stores and their management are a natural part of omnichannel strategies.
"We are in a model of great commercial plurality," concludes The President, "before, the landscape was composed of supermarkets and hypermarkets, now there is choice. Consumers have taken back the reins of consumption."