Today we will discuss a dietary business model which is growing as a blistering concept in the Indian eCommerce industry. Dark Stores.
You may have heard guidelines like bags are not allowed, cameras are not allowed, or slippers are not allowed in temples, classy restaurants, or movie halls, but have you ever heard about stores where customers are not allowed? Indeed, there are stores where customers are not allowed to enter, known as dark stores. Companies like Zepto, Blinkit, and Dunzo, who promise last-mile deliveries, are based on this phenomenon.
Post-pandemic, grocery delivery has boomed as people are reluctant to go out and physically shop for everyday groceries. But, as the demand rises, startups promise to deliver items in as little as ten minutes. They’re operating micro-fulfillment centers or Dark stores, scattered around the vicinity of cities to make an expedited distribution.
What Does A Dark Store Mean?
Dark stores are also known as micro-fulfillment centers or MFCs. A hyper-localized center where customers do not come in but order and get items delivered by looking at the options online. While many eCommerce warehouses are big and occupy large land, dark stores are small and localized, engrossing 2000 to 5000 sq. ft. of land comparatively. These are the shops that customers cannot see; the only thing they see is the mobile app.
One of the famous quick-commerce startups, Blinkit, has 400 dark stores, strategically placed in the neighborhood of tier-one cities. Proximity is the main reason these apps can deliver groceries so quickly. Most dark stores are within three to four miles of the households they serve.
Post-pandemic, even when the economy revived, these delivery services still saw high demand for last-mile delivery. Online ordering has now become a habit; people still order online time and again as they did during Covid. This has penetrated a new market. Indian quick-commerce market is anticipated to grow to $5.5 billion by 2025.
The 10-minute delivery sector is growing speedily. But, likewise, the competition is growing robust too. In the past few years, the Indian startup ecosystem has witnessed many new players coming into the business, and established players are also stepping towards it. The challenge in this business is that it is very capital-intensive, these companies anticipate making a profit by bulk orders, but growing competition, labor, and transportation costs could hamper profitability.
Every dark store opening is a new real-estate lease. So either you must have lots of money or get help from aggregators like NimbusPost, where you can use their warehouses to store your inventory near customers. More on this later; let’s see how work.
How Does Dark Store Order Fulfillment Work?
No, dark stores are not dark; they’ve ample light. Jokes apart, the reason why quick-commerce companies focus on opening dark stores is to capture $5.5. Billion markets. As a customer orders, within one minute, it is packed and ready to be supposedly delivered in nine minutes.
The success of dark stores heavily depends on automation, locations, layout, and an efficient team of order pickers. Dark stores’ layout differs from retail outlets and warehouses because their only purpose is rapid order fulfillment.
The dark store order fulfillment process is like
- The store’s staff picks up the customer’s order.
- The order is electronically delegated to the shop floor.
- Then the ordered items are packed in as little time as possible; the items are kept strategically to boost the packaging process like bulky items are placed together to ease the process.
- In a dark store, multiple orders are processed at once with the help of technology and automation.
- Order is packed and delivered to the customers within 10 minutes or half an hour.
NimbusPost warehouses and micro-fulfillment centers are designed to offer last-mile shipping to your customers. Our warehouses are fully equipped with cutting-edge technology to pack and arrange the item for delivery in no time.
Why Are Dark Stores Growing In India? (Benefits)
Better SKUs Management
As dark stores are small and within 3000 sq. ft., it helps track inventory and SKU management. In addition, many dark stores are equipped with robust SKU management software systems focusing on click-and-collect functionality. This is a plus point in grocery delivery as you can have a variety of SKUs for different sets of customers.
The main reason for setting up dark stores within customers’ reach is to enable last-mile delivery. Therefore, businesses analyze the customers buying data and critically build dark stores within the radius of customers.
Since customers are not allowed inside functional dark stores, its layout can be planned to maximize storage and picking capabilities. One dark store is utilized to support a large volume of orders. Though these centers can meet bulk orders, it is hard to optimize the fulfillment process without the right technology and automation.
Dark stores are more affordable than retail stores because you don’t have to spend on aesthetics and interiors to attract customers. In addition, dark stores are designed to speed up the order fulfillment process. Therefore, it reduces the cost to a large extent.
Conclusion: How NimbusPost Can Help You In Setting Up Dark Stores
The reason for quick-commerce rapid growth is because it satisfies customers’ instant gratification. The concept of delivery in ten minutes promises people that they’ll get their order in less time than it takes to make a
cup of tea. So how can someone say no to such an offer?
But as we discussed earlier, the competition is getting ferocious as new players emerge and establish companies with the advantage of capital and efficient processes. Establishing dark stores in different areas demands massive cash burn, which not everyone has. Aggregators are much more helpful in this scenario as they have established dark stores and warehouses.
Coming to warehouse and order fulfillment, NimbusPost is the benchmark setter in offering tech-enabled warehouses & micro-fulfillment centers near your customers. By linking with us, you’ll get AI automated fulfillment that enables ready-to-deliver packets within minutes, absolute control of the supply chain, up-to-date and centralized information, and 99.9% SLA-compliant services.