Finance:Dark store
The term dark store, dark supermarket or dotcom centre refers to a retail outlet or distribution centre that caters exclusively for online shopping.[1][2][3][4] A dark store[5] is generally a large warehouse that can either be used to facilitate a "click-and-collect" service, where a customer collects an item they have ordered online, or as an order fulfilment platform for online sales.[6] The format was initiated in the United Kingdom , and its popularity has also spread to France followed by rest of European Union.[6]
Description
Not open to the public, the interior of a dark supermarket may appear like a conventional supermarket, set out with aisles of shelves containing groceries and other retail items. However, without having to deal with retail customers, the stores are not located in the high street or shopping centres, but mostly in areas that are preferred for good road connections.[7] The buildings themselves are often utilitarian and nondescript from the outside.[7] Inside, the stores dispense with assistants who provide product advice, check-out counters and point of sale displays.
After processing orders received via the Internet, the orders are sent to the shop floor.[7][8][9] These electronically generated orders, processed and routed according to the store layout for optimal picking, are picked by store employees, known as "personal shoppers" (colloquially "pickers"), who work around the clock fulfilling the orders displayed on a tablet computer attached to their shopping trolley. More than one order can often be collected simultaneously.[2] Tesco opened a "fourth generation dotcom store" in Erith in October 2013, with a much larger product range – 30,000 lines – and higher degree of mechanisation that brings items to pickers rather than requiring them to collect individual products manually.[4] Fulfilled orders are then delivered to the customer by a fleet of vans.[2][6][7] A certain time of day, usually in the early hours of the morning, is set aside for stock replenishment.[7]
While most popular dark stores serve groceries, some of them are clothing shops, helping brands to cut the costs.[10]
The format is also popular in France, where, (As of 2014), some 2,000 dark stores operated for the "click-and-collect" model.[6]
Stores growth
The first UK supermarket to trial the concept of a specific store for online goods was Sainsbury's, which operated a distribution centre at Park Royal in London during the early 2000s, but the retailer closed the outlet because of a low order quantity.[11] It was over a decade afterwards, in October 2013 that they announced plans for another, at Bromley-by-Bow, in East London.[8]
The term dark store first appeared in the UK in 2009[citation needed] when Tesco opened their first such supermarkets in Croydon, Surrey, and Aylesford, Kent. At the time, Tesco were receiving around 475,000 orders per week which were being fulfilled from its existing retail supermarkets.[9] Supermarkets began opening dark stores to assist with distribution in geographical areas where there was a high demand for online delivery.[3] The dark store format was seen by Tesco as a more efficient way of dealing with the expansion in online sales. The retailer planned to open one dark store per year "for the foreseeable future".[9] By 2013, Tesco had opened six dotcom centres in and around London, and was responsible for 47.5% of online deliveries made in the UK.[4] The latest of these was a store that opened in Erith in October 2013, and which the industry publication Retail Gazette described as a "fourth generation dotcom store" because of the greater emphasis on a mechanised system that brought items to pickers rather than requiring them to collect individual products manually, while chilled goods are conveyed directly from refrigerator to delivery van. The Erith store holds a range of 30,000 products, and has a capacity to process 4,000 online orders a day.[4][12]
In November 2012, Zoe Wood of The Guardian reported that a number of dark stores had been opened by major supermarket chains in the UK, including Tesco and Waitrose, with more planned.[7] Waitrose opened their first online distribution centre at the site of a former John Lewis warehouse in London in April 2011, and in September 2013 announced plans for a second, purpose-built centre at Coulsdon that would open in 2014.[11][13] The company had previously used the Ocado distribution service to dispatch its goods to customers, but wished to begin rolling out its own delivery service.[11]
See also
- Bricks and clicks
- E-commerce
- Ghost restaurant
- Non-store retailing
- Online shopping
References
- ↑ Benedictus, Leo (7 January 2014). "Inside the supermarkets' dark stores". The Guardian. https://www.theguardian.com/business/shortcuts/2014/jan/07/inside-supermarkets-dark-stores-online-shopping. Retrieved 18 January 2014.
- ↑ 2.0 2.1 2.2 "Online food shopping: What is a 'dark' supermarket?". BBC News. 17 January 2014. https://www.bbc.co.uk/news/business-25774679. Retrieved 18 January 2014.
- ↑ 3.0 3.1 "Sainsbury's plans dark store to meet online demand". Reuters. 13 October 2013. http://uk.reuters.com/article/2013/10/13/uk-sainsbury-online-investment-idUKBRE99C07920131013. Retrieved 19 January 2014.
- ↑ 4.0 4.1 4.2 4.3 Somerville, Michael (29 November 2013). "Tesco opens sixth dotcom centre in Erith". Retail Gazette. http://www.retailgazette.co.uk/articles/42203-tesco-opens-sixth-dotcom-centre-in-erith. Retrieved 20 January 2014.
- ↑ In the via delle Botteghe Oscure in Rome, the street of "dark shops", during the Middle Ages the street's "dark shops" came to be installed under the dim arches of the Circus Flaminius; the literary review Botteghe Oscure took its name from the street.
- ↑ 6.0 6.1 6.2 6.3 "Supermarkets to introduce more 'dark stores'". BBC News. 9 January 2014. https://www.bbc.co.uk/news/business-25664650. Retrieved 19 January 2014.
- ↑ 7.0 7.1 7.2 7.3 7.4 7.5 Wood, Zoe (30 November 2012). "Rise of the dark store feeds the online shoppers". The Guardian. https://www.theguardian.com/business/2012/nov/30/dark-stores-feed-dotcom-shoppers. Retrieved 18 January 2014.
- ↑ 8.0 8.1 "Sainsbury's to open first 'dark store'". The Daily Telegraph. 13 October 2013. https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10376255/Sainsburys-to-open-first-dark-store.html. Retrieved 18 January 2014.
- ↑ 9.0 9.1 9.2 "Tesco to open customer-free 'dark stores'". The Daily Telegraph. 6 December 2009. https://www.telegraph.co.uk/finance/newsbysector/epic/tsco/6743329/Tesco-to-open-customer-free-dark-stores.html. Retrieved 18 January 2014.
- ↑ https://new.soldsie.com/blog/leverage-social-following-sell-clothes-online/
- ↑ 11.0 11.1 11.2 Felsted, Andrea (19 April 2011). "Waitrose eyes 'dark store' to take on Ocado". Financial Times. http://www.ft.com/cms/s/0/5164e0a4-6ab4-11e0-80a1-00144feab49a.html#axzz2qraOjOnL. Retrieved 19 January 2014.(Subscription content?)
- ↑ Creevy, Jennifer (28 November 2013). "In pictures: Inside Tesco's fourth generation dotcom centre in Erith". Retail Week. http://www.retail-week.com/sectors/food/in-pictures-inside-tescos-fourth-generation-dotcom-centre-in-erith/5055379.article. Retrieved 20 January 2014.(Subscription content?)
- ↑ Lawson, Alex (24 September 2013). "Waitrose to open second 'dark' store as online demand soars". Retail Week. http://www.retail-week.com/sectors/food/waitrose-to-open-second-dark-store-as-online-demand-soars/5053290.article. Retrieved 19 January 2014.(Subscription content?)
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