Walmart, Albertsons, Hy-Vee, and More Roll Out "Dark Stores"
UNITED STATES - The year is 2019. In a nondescript back alley, a group of cloaked figures stand in a circle. They are retail representatives convening to discuss the latest fad in grocery retail: dark stores. You might be wondering: Why must they meet in such a drab place? My question in response is: Where else would you meet to discuss dark stores?
Contrary to the image I’ve just conjured, dark stores aren’t actually that… “dark.” Instead, the term has been selected to describe the latest store format charting high with retailers of all shapes and sizes. Unlike the name suggests, dark stores have only been deemed such because there’s no shoppers perusing their wares. Instead, retailers like Walmart, Albertsons, Hy-Vee, Stop & Shop, Meijer, and more are using the dark stores to support their online grocery operations efficiently. As a result, dark stores—which typically resemble mini warehouses—tend to be fully automated and chock full of technology and innovations designed to make online grocery delivery as convenient as possible for all involved.
“Micro-fulfillment helps retailers solve the labor and last-mile costs conundrum,” wrote Christopher Mandeville, Analyst at Jefferies, in a research report. According to CNN, Mandeville also noted that the cost of delivering groceries from central warehouses (a.k.a. the old fashion way) is usually two times higher than using micro-fulfillment stores or dark stores.
Specifcially, CNN cites Walmart as an example, who has trained over 30,000 workers to complete online grocery orders. Rather than optimizing their services, Walmart found that the influx of employees (including those from delivery services like Instacart and Peapod) in combination with consumer shoppers crowded store aisles during peak shopping periods.
As a result, Walmart opened Walmart Pickup Point, a 40,000-square-foot warehouse that resembles a ’50s diner—shoppers drive up to a spot and have their groceries delivered straight to their car. Walmart is also testing an autonomous shopping cart that literally shops for groceries on its own before depositing them with a Walmart worker who then prepares the order for consumer pick-up—a prototype that could be where Sobeys is planning to take its own recently unveiled autonomous grocery cart.
Similar to Walmart, Albertsons is also testing robots to assemble grocery orders on their own at micro-fulfillment centers fully dedicated to online grocery deliveries and pickups. Already, the robots are being celebrated for speeding up the process.
At the backs of its stores, Stop & Shop is trialing Albertsons’ dark store method with its own 12,000-square-foot, fully automated fulfillment centers. Meijer is also following suit with its own micro-fulfillment warehouses, maximizing space in its brick-and-mortar stores.
Hy-Vee, on the hand, ditched the attachment aspect of Albertsons’ and Stop & Shops’ dark stores and instead is trialing locations that resemble regular grocery stores except for their lack of signs (spooky!). The stores are then used like any other fulfillment center, filling shoppers online orders and saving space in the retailer’s traditional supermarkets.
Will dark stores soon become less of a fad and more of a regular part of everyday grocery life? ANUK is thinking yes, but we'll keep following our leads in the meantime.