The COVID-19 pandemic brought about a sea change in business operations across the globe. In India, it gave rise to an e-commerce revolution as people took to online shopping during the prolonged, stringent lockdown. And the biggest impact of this transformation in consumer behaviour was felt by retailers – especially those dealing in FMCG products.
However, while the pandemic merely accelerated the shift towards e-commerce, the transformation was imminent and already underway. Retailers who adopted an omnichannel approach adapted to the rapid change easily, those operating solely as offline stores bore the brunt of the blow dealt by the pandemic. While many stores had to pause operations, others had to shut shop entirely. This is where dark stores came into the picture.
What Are Dark Stores?
In a nutshell, dark stores are retail stores without customers walking through the aisles. Instead, customers can browse through the stores online with a real-time view of the shelves to purchase what they require. Dark stores offer the best of both worlds in terms of a real-time view of the stores as well as product variety and quick delivery.
Moreover, in the present scenario with an ongoing pandemic, dark stores are an ideal option as they are not only safe but also enable cost-optimization and efficient supply chains for retailers. Although dark stores aren’t an entirely new concept and the idea has been considered and even implemented in some places, they are now proving to be a game-changer for the FMCG market as a whole. Here’s how.
Why Are Dark Stores Gaining Popularity In The FMCG Space?
The FMCG segment has its fair share of unique challenges, especially when it comes to groceries, such as perishability and the requirement for a high number of SKUs. In a regular store, managing SKUs and monitoring the perishability of items can be a tedious process. Dark stores, however, focus primarily on click-and-collect functionality, thereby optimizing SKU management.
A space saver, dark stores are incredibly efficient as they don’t need to dedicate a specific space or budget to the shopping experience or displaying in-store advertisements. Furthermore, dark stores can also cater to multiple online retailers simultaneously, enabling retailers to save real estate expenses. Such advantages have propelled dark stores into being considered and tested in mainstream retail, especially in the event of a global pandemic.
Dark Stores: The Future Of Post-Pandemic FMCG
By addressing such specific challenges pertaining to the FMCG market, dark stores offer a plethora of benefits for both the retailer and the end consumer. The demand for convenient and seamless shopping has skyrocketed among consumers and this rapid growth in demand is now pushing FMCG players to come up with effective solutions for automation and fulfillment, and dark stores are likely to become a permanent part of the future of the FMCG market.
Even when the pandemic will have passed, we are most likely to be faced with a new normal. Particularly consumers who have shifted to online shopping or opted for hyperlocal, doorstep deliveries, are expected to retain these habits to an extent in the future, putting physical stores at further risk. Even from a retailer’s standpoint, since dark stores optimize cost, effort, and manpower, and most retailers by now have adapted to offering doorstep deliveries, hyperlocal deliveries, and even buy-online pick up in-store (BOPIS) options, dark stores are set to become the future of post-pandemic retail by cementing a permanent place for themselves in the FMCG market.
The ongoing pandemic has disrupted the FMCG market and at the outset of the pandemic, there existed rampant uncertainty surrounding the future of the sector. As the world begins to adapt to the new normal and gradually returns to a stable state, FMCG players have recalibrated their approach and are constantly reinventing their strategies. While dark stores may not entirely replace the physical, in-store shopping concept, especially in a country like India where a significant chunk of the population would prefer in-store shopping, they are certainly a concept that will shape the future of retail and the FMCG market. It is only a matter of time.