Dark stores are set up typically near high demand neighborhoods but off the high street. For some segments, like apparel and durables, they may as well be set up on the city outskirts. They serve as mid-size local warehouses for storing, sorting, and handling orders.
Even before COVID-19 forced retailers in India, and globally, to rethink their operational strategy, retailers were grappling with profitability and growth-related challenges. Then came COVID-19- with footfalls nowhere to be seen, and customer demand moving online for more categories each passing day. Now the retail universe is fighting to address many challenges at once. Fortunately, there seems to be a silver lining amidst the ominous clouds, to address their problems:
- Low rentals? Check.
- Higher stock variety and availability? Check.
- Closer to customers? Check.
- Higher service levels? Check.
- Suitable for online and click and collect services? Check.
- The new way of handling the retail supply chain? Check. Well most likely!
That’s the allure of dark stores that are making their presence increasingly felt across the world in the retail and consumer goods universe.