Importance Of Growing Needs In Cities Of Dark Stores

The story starts and ends at e-commerce.

Electronic-Commerce has become the core of various businesses. It has opened doors to numerous businesses leading to great competition. Speed is the mantra for survival of any ecommerce company, the longer the delivery time, the less the orders will be, and in turn less profitability. What cannot be ignored is growing competition. You have to be the best in what you are doing. To reach the pinnacle, you need to make the best use of technology and services.

One such service that is proving helpful to the e-commerce industry is Dark Store or Ecommerce fulfilment centres, or also called delivery centres.

The term dark store is not very known; it simply justifies its function. Dark stores are retail distribution outlets with strategic layouts that are used to cater only to online shopping. They are not built in a way to appear appealing to the customer but, they are built to complete the demand of the customer on time, basically a storeroom/ warehouse in your locality for faster deliveries. These are typically spaces located in cities with high demand and is converted into a local fulfilment/delivery centre. Dark stores aim to store inventory and fulfil orders as fast as possible while making the best use of space and location.

How does dark store work?

The procedure is simple as once the order gets placed, the product will be picked, packed, and billed by dark store staff. It will either get shipped or picked by the customer locally on the same day. They enable instant delivery, easy store pickups. They also follow centralised route planning to deliver maximum goods at a time. These can act as a support system for e-commerce companies working in a large geographical area.

Dark stores have seen a surge recently, and it is mainly in cities – why?

The surge:
The dark store has been in use for a couple of years by corporations. Due to the continuous shift in the demand and expectation of customer from the e-commerce industry, dark stores have witnessed a positive impact. Digitalisation has helped the growth of these e-commerce delivery centres to a great extent. Also, COVID-19 has been a partial factor contributing to the same.

The reason:
E-commerce follows a distribution method known as the Hub-spoke model. In this model, the products from the centralised hub are transferred to individual dark stores using a bigger vehicle. But there are restrictions for a bigger vehicle to enter the buzzing city. Companies tend to face problems while giving fresh items or products at the peak season to the customer on time. For this reason, the want to have smaller warehouses or dark stores increases.

Generally, these dark stores are filled with products at night (considering the restrictions). Later smaller vehicles like vans/ bikes are used to deliver the goods in the standard condition. Henceforth the quality, time, and reputation are not compromised.

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The rising need for dark stores to overcome challenges:

• Shortened delivery time – The main focus of dark stores is to fasten delivery solutions across the cities. With their location and timely management of inventories, packing and picking have been easier like never before. It has helped in reducing the time taken in all the transitions. With the updates in technology, the efficiency to deliver a range of products gets increased.
• No time stoppage – These stores are not obliged with time. In most cases, they are allowed to work around the clock. So, the order is delivered to their customers through last-mile delivery personnel.
• Storage space & varieties of product – Dark store settings are near the prime locations in the cities. Dark stores are required to store a large volume of inventories. It provides an additional facility to process the order and also helps in fulfilling high order density.
  It can contain a range of products depending on the space and need. It also reduces the constant transportation of inventories from one place to another to reach the end level in the supply chain.
• The loyalty of customers – The faster delivery of the right product brings an unforgettable shopping experience. The dark store can become the key ingredient to win a customer’s heart and loyalty. What a consumer needs is to have their product at the desired time slot, a dark store fulfils this all.
  It will indirectly help in decreasing the number of cancelled orders.
• Way to maintain the quality of perishable goods – If the product is not fresh, it is of no use resulting in an unpleasant customer experience. To ignore such happenings, dark stores have come up with specified spaces for such items. Hence, unconditionally proven to be the best way to store and process perishable goods. At the same time, the goods are arranged in a way that time taken to find a product, process it, and reach the last milestone that is to the consumer on time.

What are the things an e-commerce firm should know before establishing/hiring a dark store?

No matter how easy the process sounds, it needs thorough logistics planning which, can be assigned to a 3pl company like StoreFresh.
Following are the factors that are to be understood before stepping into the market:

• Choosing the best pin codes
• Out-and-out knowledge of the local rules and regulations
• Understand the best way to use the benefits of dark store
• Recruiting the team very carefully
• Providing promising experience to the customers
• Fulfilling demands during peak season

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Will there be a boost in the requirement of dark stores after the pandemic?

COVID-19 had shaken the way things used to work. Fulfilment Centres are one of the ways by which a product can easily reach the end customer.
These in-city warehouses also in turn helps maintain and reduce the covid spread as it is helping customers getting their needs at their doorsteps than moving out.

Is this just the beginning?

It is believed that the trend of dark stores/ in-city warehouses/ Fulfilment Centres has just begun. Fulfilment Centres can provide opportunities to companies/retailers by being helpful while launching new products or entering new markets. These are built to increase logistics efficiency and productivity.

This solution needs full consideration and thorough planning. If not established properly, it could either bring success or can result in failure. Entering a new area is full of risks. To avoid losses and maximise profit, hire a well-known service provider. StoreFresh is an ecommerce fulfilment service provider known for its tactics to handle legal procedure, the way through the city, the skill to negotiate with partners and experience.

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