The COVID-19 pandemic has made a seismic impact on the retail industry. The surge in e-commerce activity and digital consumption habits have caused retailers to reconsider their traditional retail model, especially in the arena of space utilization. This has given rise to the concept of dark stores, which has since proven to be highly advantageous to numerous retail businesses. In this article, we will get you up to speed with what a dark store is, its advantages, and requirements, as well as share some solutions to setting up your dark store.

Table of Contents:

• What is a dark store?
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• What is a micro-fulfillment center?
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• What are the advantages of dark stores?
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• What are the warehousing requirements of dark stores?
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• Other automation solutions for dark stores
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What is a dark store?

A dark store is a brick-and-mortar outlet that has been turned into a center for micro-fulfillment operations. The reason that these stores are described as ‘dark’ is not due to the lack of lighting, but rather, the fact that these stores are not open to the public so as to maximize space for store inventory and fulfillment operations.

Workers within the dark store work efficiently to fulfill online orders, from packing to delivery. Dark stores are usually located near the customer base to enable rapid, on-demand order fulfillment. This retail model has taken flight most notably in the grocery, fashion, and furniture industries.

What is a micro-fulfillment center?

As dark stores can be understood as a micro-fulfillment center, let’s learn more about what a micro-fulfillment center (MFC) is. A MFC is a smaller-sized, highly automated facility that is typically positioned close to the end customer base so that the time and cost of goods delivery are minimized.

A MFC will usually possess 3 elements:

• - Digital infrastructure: order management software to process online orders
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• - Physical infrastructure: technology to enable automated picking and transfers
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• - Human resource: packing staff

So, what are the advantages of dark stores?

1. Contactless shoppingWith the global pandemic yet to fully abate, contactless services to minimize the spread of the virus continues to be the preferred choice of many consumers. Dark stores allow customers to purchase from retailers through online platforms without having to visit the stores physically to browse, along with the faster delivery guaranteed.

2. Faster distribution

Whereas conventional warehouses are usually located in remote and hard-to-access areas, dark stores are usually located in cities, near the end consumer base. This expedites order fulfillment by optimizing last-mile delivery.

Businesses can have the goods delivered much quicker to customers’ homes, or customers can simply travel a convenient distance to pick them up at the dark store on their own time. This enables the business to sustain high order volumes, increasing its revenues.

3. Diversity of products and breadth of audience

3. Because the layout of dark stores does not have to take into account the customer experience, it can be optimized for maximum storage capacity, allowing for the stocking of an extensive range of goods.

In addition, because dark stores do not follow the typical retail opening hours, their round-the-clock accessibility allows them to reach customers via online platforms every moment of the day, thus broadening their customer penetration.

4. Improved management of SKUs

With the dark store layout focusing on storage and self-pickup services, the SKU management is highly optimized, especially for retail businesses that manage a high number of SKUs such as supermarkets and whole foods stores.

5. Improved management of inventory

Without customers waiting in lines outside or having customers or customer service staff within the store, dark stores can achieve large order volumes. They can also help to manage the retail fulfillment of other stores in the same region.  

How can I optimize my dark store?

To reap the full benefits of a dark store, here are 3 important requirements to have:

1. 1. Efficiency

Multi-order picking

To ensure high efficiency within the dark store, multi-order picking can be considered. For example, to fulfill an order, multiple goods located around the warehouse may need to be picked. Robotic technologies from Geek+ like the PopPick solution can enable entire shelves to be moved to the working station, and the shuttle system can automatically retrieve the tote box and allow the workers to easily pick up the goods needed for the order.

AI Mapping Optimization (Heat Map)

Another technology that improves efficiency is AI mapping optimization. Geek+ PopPick uses AI to organize related goods intelligently in one rack, improving accuracy with a minimum of 10 totes per task. Compared with traditional tote to person solutions, PopPick saves 50% in operating costs, with 24/7 operations improving hit rate during idle time.

2. Storage Density

To help your dark store achieve high storage density, the Geek+ PopPick solution increases storage density by as high as 4 times. It requires fewer aisles and can store 12 columns of totes in a row. This high density is achieved by stacking up a minimum of 10 layers of totes in 3.7m high racks, with only a 20mm gap between totes.

3. Flexibility

Rack Customization

PopPick supports several kinds of racks, like mixed racks with different shapes and sizes of goods, a mix of cartons and totes, traditional racks, and big heavy pallet racks. Racks can be extended further with 2 extra rows for even more storage capacity.

Expansion and Compatibility with other operations

The Geek+ PopPick can be seamlessly combined with the Geek+ 4-way shuttle. It is the ultimate solution where you can pick small, medium, or large items simultaneously in one station. To provide a flexible solution, it can also be combined with Geek+’s standard picking system for limitless possibilities.

Other automation solutions for dark stores

Another automation solution suitable for dark stores is the RS8+P40 solution. The RS8 is an 8-meter-tall box-picking robot that navigates narrow aisles and the P40 is a tote-carrying robot equipped with a box-lifting module.

The Geek+ RoboShuttle solution allows businesses to make full use of vertical warehouse space and ensure safe storage, retrieval, and organization of boxes carrying small to mid-sized items of many different SKUs. Combining high-density robots with flexible picking robots, businesses can achieve 3x more storage capacity and handle up to 500 boxes/hour/station.

Check out Geek+’s partnership with Comix below!

The dark store is a new and innovative retail model that stands to unlock tremendous potential for businesses in the retail space. With the help of robotic automation, your dark store will be able to run with the best efficiency and flexibility while maximizing storage density for the best business outcomes. Speak to one of our consultants today and we will get you started!