Dark Store
The dark store made many entrepreneurs review their logistics strategies
Thanks to the internet, the world economy did not stop with the COVID-19 pandemic. In fact, some sectors grew impressively. In Brazil alone, e-commerce gained 13 million new consumers in 2020, according to a survey by Webshoppers 43. And according to the company Statista, online transactions are expected to move more than 5 trillion dollars worldwide in 2021. The volume of virtual business has risen so much that entrepreneurs have had to review their logistics strategies. It is in this scenario that a new modality gained strength: the dark store, or “loja escura”, in a free translation into Portuguese.
It is a store without face-to-face service. In practice, it functions as a small distribution center. But unlike a conventional CD, which is usually built in peripheral regions of the city, the dark store is closer to the urban center and, consequently, just a few minutes away from the final consumer. Such modality is also called microhub, micro-fulfillment center or hyper local fulfillment center. This logistics strategy for the last mile (the last mile) comes to increase the efficiency of the omnichannel method, where the company maintains contact with the customer through several digital platforms simultaneously, thus boosting online sales.
In the United States, Europe and some Asian countries, the dark store is mainly used by the food sector, especially supermarkets, where same-day delivery is a necessity. However, more and more other segments are realizing the advantages of adopting this strategy. The main one, obviously, concerns the location of the property, which is closer to the consumer. According to the Global Consumer Insights 2018 survey, carried out by PwC, 45% of Brazilian consumers are willing to buy basic items virtually and 64% of this public is willing to pay a little more if delivery is made on the same day. Now see other advantages of adopting the dark store:
- Reduction in transport costs, especially if the company encourages consumers to adopt click-and-collect, that is, “click and collect”, when the buyer goes to the microhub to collect the goods;
- Reduction of environmental impacts, because with shorter journeys we will also have a reduction of gases in the atmosphere. If the company adopts electric vehicles, this advantage is even greater;
- Reduction in the number of logistical challenges, normally imposed by the last mile;
- Ease of serving regions with a large volume of orders;
- Low cost of implementation and operation, as the dark store does not require the same level of investment as a normal store. Without sellers, with real -time online visibility, space optimization and efficient logistics, this option becomes much more interesting from a financial point of view;
- Reuse of physical stores with little movement, allocating part of the space to e-commerce fulfillment and thus increasing potential customers. In some cases, it might even be more interesting to convert the entire space to dark store ;
- Increased ability to earn something rare these days: consumer loyalty. But for that it is necessary to provide him with a unique consumption experience. With greater efficiency, as long as the correct technology is applied in the receipt, storage and picking (sorting) of products, the dark store comes to give those involved the agility that everyone expects from the online universe.
As we have seen, advantages abound. But implementing this logistics strategy is not so simple. It is not enough to have a small building in the center of the city. It takes investment in good software. It all starts with a WMS, Warehouse Management System, which in Portuguese means Warehouse Management System. Among other things, it allows you to control the inventory, the movement of goods, the replenishment of stocks, and the picking area. Another software that helps a lot is OMS (Order Management System). It enables complete management of the purchase, from the moment the order is placed until the final delivery. The WHO it also allows the customer to follow the product flow in real time.
In addition to investing in software, it is necessary to train the staff very well, who must be 100% committed to the agility in handling the cargo, the accuracy of the work and customer satisfaction. As the WMS offers all the necessary information for managing the microhub, it is important to share this information with collaborators in dashboards. Data visibility helps you stay focused on productivity.
However, is the dark store suitable for all entrepreneurs? No. It all depends on the volume of business. In an interview with the BBC on August 11, 2019, the CEO of logistics consultancy Diagma, Aurélien Jacomy, said that the micro-fulfillment center is only interesting for companies that have at least more than 100 virtual sales per day. Shopkeepers with less sales than this can adopt ship from store, that is, online sales based on normal store inventories.
In an interview with the SuperVarejo website, Thiago Picolo, CEO of the company Natural da Terra, a chain specializing in horticultural products, said that in 2020 the volume of orders for delivery rose by an extraordinary 1000%! This made the company invest in dark stores to reduce operating costs and speed up deliveries. Carrefour, which earned BRL 918 million from e-commerce between April and June of last year alone, is moving in the same direction. Lojas Marisa is also beginning to invest in this logistics strategy.
And if you are looking for solutions in Logistics, particularly Intralogistics, that is, those in the company, contact us.