Dark stores are the new ‘buzzword’ of 2021-22. All online players are moving to offline delivery capabilities and all offline players are understanding how to go online.
Dark stores enable consumers to purchase from retailers without having to enter the store. In other words, the term is simply used to refer to a brick-and-mortar location that has been shut down and turned into a centre for fulfilment operations.
Globally, dark stores have been a rage–partially because of COVID-led lockdowns and restrictions, and partially because of commerce. This kind of store allows one to eliminate the need for ‘show & tell’ at the counters and can subsequently optimise on operational costs there. These have led to the emergence of some amazing companies like Jokr (www.jokr.com), led by an amazing Founder, **Ralf Wenzel (do listen to him explain the 10 min delivery model on** https://www.thetwentyminutevc.com/ralf-wenzel-jokr/) and closer home to Zepto (Zepto.com) bringing the 10 min promise to India.
To think like a common man, this of the good old ‘godowns’ (at convenient locations) x “fulfilment tech’” = dark store
However, India (& I believe other emerging markets) are complex with different consumer needs. Not all consumers are looking at just a 10 min delivery (Convenience) but a lot on “Availability” (specially in long tail categories like medicines) & “Value savings” (I might prefer a 24 hour delivery with 10% savings on my groceries vs a costed delivery model for faster convenience). A survey by Qvalon quoted in a report also shows that 49% of people are mostly focused on product availability—well ahead of price (36%) and quality (34%).
Dark Stores are not new - Tesco opened one in 2009. They are a great way to service complex & different customer needs. However, we believe that the time is right to re-invent the ‘dark stores’ which services a majority of customer needs - Availability, Affordability, Quality within the right timeframe to customers.
One of the think that’s perplexing is that no one thought of marrying the two warring parties - offline & online. Currently people working on offline stores are super successful (even in categories like electronics where ecommerce has been in existence for >10 years) & so are the online players (unbelievable work done by the early pioneers like Flipkart & Snapdeal in India). They exist as two different worlds today.
We think the time is come to think of a combined business - a world which is not either offline or online but a kichri of both - offering the best experience at the best value based on how the consumer wants it.
Think of the existing model - Godowns x fulfilment tech and imagine a front end micro consumer store (with similar psft cost structure)
This enables the (e)retailer to service maximum of consumer needs - you can run a successful offline store as usual, you can run the dark store ops for digital orders, you can offer a Buy Digital, Pick up Local - all based on what the consumer wants are.
We at Dawaa Dost have been early believers on micro stores with fulfilment capabilities at high frequency locations like Railway Stations, etc & our consumer love us. They finally have an ability to build trust in the offline world (look & feel) & convenience all under one ‘roof’.
We think the time is right to re-think ‘go to market’ which will empower the customer to choose the interaction with the brand - we call it Dark Store 2.0