If you've been paying attention to the latest movements happening in the retail sector, you might have noticed that retailers left and right have been silently rolling out automated warehouses and false storefronts masking new concepts. Walmart, Albertsons, Hy-Vee, Stop & Shop, Meijer, and more are but a few that have unveiled their own takes on the above mentioned facilities—all of which have one thing in common: There’s no shoppers perusing their wares. As such, industry experts have monikered the movement as "dark stores."
While not a consumer-facing offering, dark stores are still designed to help retailers big and small keep up with the changing tide of consumer demand. Specifically, dark stores streamline and support grocers' online and brick-and-mortar grocery operations. As a result, dark stores tend to be full of technology and innovations implemented to aid retailers in optimizing online grocery delivery, including making it more affordable for all involved.
“Micro-fulfillment helps retailers solve the labor and last-mile costs conundrum,” wrote Christopher Mandeville, Analyst at Jefferies, in a research report. According to CNN, Mandeville also noted that the cost of delivering groceries from central warehouses (a.k.a. the old fashion way) is usually two times higher than using micro-fulfillment stores or dark stores.
CNN cites Walmart as an example, who has trained over 30,000 workers to complete online grocery orders. Rather than optimizing their services, Walmart found that the influx of employees (including those from delivery services like Instacart and Peapod) in combination with consumer shoppers crowded store aisles during peak shopping periods.
As a result, Walmart opened Walmart Pickup Point, a 40,000-square-foot warehouse that resembles a ’50s diner—shoppers drive up to a spot and have their groceries delivered straight to their car. Walmart is also testing an autonomous shopping cart that literally shops for groceries on its own before depositing them with a Walmart worker who then prepares the order for consumer pick-up—a prototype that could be where Sobeys is planning to take its own recently unveiled autonomous grocery cart.
Similar to Walmart, Albertsons is also testing robots to assemble grocery orders on their own at micro-fulfillment centers fully dedicated to online grocery deliveries and pickups. Already, the robots are being celebrated for speeding up the process.
At the backs of its stores, Stop & Shop is trialing Albertsons’ dark store method with its own 12,000-square-foot, fully automated fulfillment centers. Meijer is also following suit with its own micro-fulfillment warehouses, maximizing space in its brick-and-mortar stores.
Hy-Vee, on the hand, ditched the attachment aspect of Albertsons’ and Stop & Shops’ dark stores and instead is trialing locations that resemble regular grocery stores except for their lack of signs (spooky!). The stores are then used like any other fulfillment center, filling shoppers online orders and saving space in the retailer’s traditional supermarkets.
As dark stores become more of a mainstay in the grocery retail sector, how will companies continue to optimize the concept? Deli Market News will continue to report on the latest.