The coming war on dark stores and how automation can help

How quickly things change! Last year, dark stores were being tipped for big things in the retail space.

Now, many countries and cities are pushing back against companies that want to open these locations to store inventory and fulfil orders.

The rapid grocery delivery industry, for instance, has begun to experience significant resistance to its business model.

"The business model of these companies is that they want to deliver groceries in 10 minutes, that means they need to be based in neighbourhoods. That's exactly the place where they also cause nuisance," said Marieke van Doornick, Deputy Mayor, Amsterdam, which recently slapped a one year freeze on new dark stores.

"This is not something that is happening specially in Amsterdam, this is happening in most big cities."

The only viable solution isn't to eliminate dark stores, but rather make them better, according to Brittain Ladd, a former Amazon exec and supply chain consultant.

In a LinkedIn post, he argues that this can be achieved by: setting standards on the appearance and operations of dark stores; leveraging automation to hold and fulfil more products to reduce the total number of locations required to meet demand; and insisting that retailers and logistics companies collaborate on fulfilment.

“Each rapid grocery delivery company will require thousands of dark stores to scale their operations. When combined, it's conceivable that in the US, these companies will require 15,000+ such facilities,” Ladd commented.

Rapid grocery delivery companies, along with quick commerce firms like DoorDash and Gopuff can utilise automated micro-fulfilment centres owned and operated by a third-party, to provide Micro-fulfilment as a Service.

Ladd concluded: “RGD, DoorDash, Gopuff, etc., may choose to open their own automated MFCs. These will become a must have for retailers, quick commerce and RGD companies.”

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