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The term dark store, dark shop, dark supermarket or dotcom centre refers to a retail outlet or
distribution centre A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to co ...
that exists exclusively for
online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the ...
. A dark store 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 fulfillment platform for online sales. The format was initiated in the United Kingdom, and its popularity has also spread to France followed by the rest of the European Union and Russia, as well as to the United States. many companies are competing to provide rapid delivery of groceries. Most are financed by
venture capital Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which hav ...
, and are fighting for
market share Market share is the percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a ...
and prepared to take initial large losses in doing so. Professor Annabelle Gawer, director of the Centre of Digital Economy at the
University of Surrey The University of Surrey is a public research university in Guildford, Surrey, England. The university received its royal charter in 1966, along with a number of other institutions following recommendations in the Robbins Report. The institutio ...
, pointed out that the industry being disrupted is not food supply, but local delivery. Gawer asserts "delivery has never been a profitable industry".


Concept

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. The buildings themselves are often utilitarian and nondescript from the outside. Inside, the stores dispense with assistants who provide product advice, check-out counters and point of sale displays. After orders received via the Internet are processed, the orders are sent to the shop floor. 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 A tablet computer, commonly shortened to tablet, is a mobile device, typically with a mobile operating system and touchscreen display processing circuitry, and a rechargeable battery in a single, thin and flat package. Tablets, being compu ...
attached to their shopping trolley. More than one order can often be collected simultaneously.
Tesco Tesco plc () is a British Multinational corporation, multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011 it was the third-largest retailer in the world measured by gross revenues an ...
opened a "fourth generation dotcom store" in
Erith Erith () is an area in south-east London, England, east of Charing Cross. Before the creation of Greater London in 1965, it was in the historical county of Kent. Since 1965 it has formed part of the London Borough of Bexley. It lies north- ...
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. Fulfilled orders are then delivered to the customer by a fleet of vans. A certain time of day, usually in the early hours of the morning, is set aside for stock replenishment. In the United States, Toys-R-Us adopted a version of the dark store model but it uses existing stores as warehouses. Traditional and online operations converge as the company uses their parked inventory to deliver online orders. While most popular dark stores serve groceries, some of them are clothing shops, helping brands to cut the costs. Dark stores are less costly to operate not only because they are located in cheaper rental areas but also because of the reduced picking cost. A dark store-picked grocery costs a company around £12, which is significantly lower than the £18-£20 cost per grocery order picked at a traditional store. The format is also popular in France, where, , some 2,000 dark stores operated for the "click-and-collect" model.


Stores growth

The first UK supermarket to trial the concept of a specific store for online goods was
Sainsbury's J Sainsbury plc, trading as Sainsbury's, is the second largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company wa ...
, which operated a distribution centre at
Park Royal Park Royal is an area in North West London, North West London, England, partly in the London Borough of Brent and partly the London Borough of Ealing. It is the site of the largest business park in London, but despite intensive existing use, ...
in London during the early 2000s, but the retailer closed the outlet because of a low order quantity. It was over a decade afterwards, in October 2013 that they announced plans for another, at
Bromley-by-Bow Bromley, commonly known as Bromley-by- Bow, is a district in the London Borough of Tower Hamlets in East London, located on the western banks of the River Lea, in the Lower Lea Valley in East London. The area is distinct from Bow, which lies ...
, in East London. The term 'dark store' first appeared in the UK in 2009 when
Tesco Tesco plc () is a British Multinational corporation, multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011 it was the third-largest retailer in the world measured by gross revenues an ...
opened their first such supermarkets in
Croydon Croydon is a large town in south London, England, south of Charing Cross. Part of the London Borough of Croydon, a local government district of Greater London. It is one of the largest commercial districts in Greater London, with an extensive ...
, Surrey, and
Aylesford Aylesford is a village and civil parish on the River Medway in Kent, England, northwest of Maidstone. Originally a small riverside settlement, the old village comprises around 60 houses, many of which were formerly shops. Two pubs, a village ...
, Kent. At the time, Tesco were receiving around 475,000 orders per week which were being fulfilled from its existing retail supermarkets. Supermarkets began opening dark stores to assist with distribution in geographical areas where there was a high demand for online delivery. Retail companies with dark stores usually operate fleets of light trucks to deliver orders made online, particularly to inner urban areas, avoiding disruptions to offline store operations. 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". 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. 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. In November 2012, Zoe Wood of ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and '' The Guardian Weekly'', ''The Guardian'' is part of the G ...
'' reported that a number of dark stores had been opened by major supermarket chains in the UK, including Tesco and
Waitrose Waitrose & Partners (formally Waitrose Limited) is a brand of British supermarkets, founded in 1904 as Waite, Rose & Taylor, later shortened to Waitrose. It was acquired in 1937 by employee-owned retailer John Lewis Partnership, which still sel ...
, with more planned. Waitrose opened their first online distribution centre at the site of a former
John Lewis John Robert Lewis (February 21, 1940 – July 17, 2020) was an American politician and civil rights activist who served in the United States House of Representatives for from 1987 until his death in 2020. He participated in the 1960 Nashville ...
warehouse in London in April 2011, and in September 2013 announced plans for a second, purpose-built centre at
Coulsdon Coulsdon (, traditionally pronounced ) is a town in south London, England, within the London Borough of Croydon, in the ceremonial county of Greater London since 1965. Prior to this it was part of the historic county of Surrey. History The loc ...
that would open in 2014. The company had previously used the
Ocado Ocado Group is a British business based in Hatfield, England, which licenses grocery technology. It owns a 50% share of Ocado.com (the other 50% is owned by UK retailer Marks & Spencer) and licenses its grocery fulfilment technology to global ...
distribution service to dispatch its goods to customers, but wished to begin rolling out its own delivery service. In 2020,
Amazon Amazon most often refers to: * Amazons, a tribe of female warriors in Greek mythology * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon River, in South America * Amazon (company), an American multinational technology co ...
-owned US retailer
Whole Foods Whole Foods Market IP, Inc., a subsidiary of Amazon, is an upscale American multinational supermarket chain headquartered in Austin, Texas, which sells products free from hydrogenated fats and artificial colors, flavors, and preservatives. A USDA ...
opened its first purpose-built online only dark store, in Brooklyn. In January 2022 the city of Amsterdam froze the opening of new dark stores because of noise and increased scooter traffic near stores, also the appearance of the stores was considered undesirable.


See also

*
Bricks and clicks Omnichannel retail strategy, originally also known in the U.K. as bricks and clicks, is a business model by which a company integrates both offline (''bricks'') and online (''clicks'') presences, sometimes with the third extra ''flips'' (physica ...
*
E-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain managemen ...
* Ghost kitchen *
Ghost restaurant A virtual restaurant (also known as a ghost kitchen or dark kitchen) is a food service business that serves customers exclusively by delivery and pick up based on phone and online ordering. It is a separate food vendor entity that operates out o ...
*
Non-store retailing Non-store retailing is the selling of goods and services outside the confines of a retail facility. It is a generic term describing retailing taking place outside of shops and stores (that is, off the premises of fixed retail locations and of marke ...
*
Online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the ...


References

{{reflist, 2 Supermarkets Shopping delivery services Online retailers