Imagine running a retail grocery store in a large city. The location is full of food, beverages and pantry items. Plenty of staff members are on-site, hard at work. But there are no shoppers pushing carts down the aisles, checking the shelves for bargains or swiping their cards at checkout. And yet, business is booming. This may sound like an unlikely scenario, but it’s actually a significant and developing trend: the dark store.
A blend of e-commerce and brick-and-mortar retail, these “stores” are often located among local gift shops, gyms, florists, and bars and restaurants. Yet they essentially function as employee-only warehouses and fulfillment centers. They are dark to customers and predominantly supported by automation.
Grocery chains Kroger and Giant Company have built robot-run dark stores for picking orders, which are located in urban centers to support quick commerce. Kroger, Stop & Shop, Tesco, Whole Foods and Woolworths Supermarket have all explored similar possibilities.
Ride-hailing service Ola announced plans to open 500 dark stores in 20 cities in India within the next six months. The Ola Dash service is already operating in nine cities via 20 dark stores housing 2,500 stockkeeping units. In the United States, DoorDash is launching DashMart convenience stores for its own brand of ultrafast delivery.
Charlotte, North Carolina-based doughnut chain Krispy Kreme has been piloting dark stores as part of its efforts to expand delivery access points. After opening more than 50 dark stores in the United Kingdom, Krispy Kreme was able to achieve national delivery coverage. This year, the company plans to do the same in Mexico and the United States.
Also in hopes of expanding their reach, Chick-fil-A, Wendy’s and even some celebrity restaurant popups are employing another eerie-sounding concept: ghost kitchens. These are food preparation facilities specifically designed for delivery-only meals. They don’t have storefronts, dining rooms or takeout options.
Both ghost kitchens and dark stores offer a host of financial benefits, including less staff and no need for consumer amenities, such as fancy lighting or eye-catching signage. Of course, there are numerous obstacles, as well. Perhaps the greatest challenge is that many city leaders are concerned about the impacts on urban environments, including:
- Violation of zoning ordinances
- Shifting local traffic patterns
- Barriers to food access for people who use food stamps, are uncomfortable shopping online, are illiterate or cannot afford delivery fees
- Reduced consumer foot traffic leading to less business for nearby retailers
- Diminished neighborhood socialization
- Fewer people around to witness and intervene in criminal activity.
Local leaders in France, the United Kingdom and the United States are keeping an eye on these issues. Some cities in the Netherlands have taken the next step, putting a one-year freeze on new dark stores.
The switch to dark stores essentially exchanges traditional retail jobs for distribution and fulfillment roles, further blurring the lines among supply chain tiers. If dark stores continue to grow as projected and push e-commerce revenues to $6.5 trillion next year, the industry is going to need upskilled staff well-versed in supply chain, distribution and fulfillment basics to support this evolved form of retail.
ASCM offers educational programs to provide you and your team with essential, end-to-end supply chain knowledge. Look to the Certified in Planning and Inventory Management credential for expertise in materials management, master scheduling, forecasting and production planning. The Certified Supply Chain Professional credential offers insights into foundational supply chain technology, concepts and strategies. And the Certified in Logistics, Transportation and Distribution credential encompasses the critical tail-end of supply chains. Discover these industry-leading programs today.