A lone figure pushes a cart along a dimmed aisle; the only bright lights are those highlighting the names of the products. There’s no music, no checkouts and no customers. Welcome to the Dark Supermarket.
A “Dark Supermarket” is a warehouse full of groceries where staff called “pickers” select the goods that have been ordered by an online customer.
‘We don’t have sufficient capacity in our shops to meet the demand from our customers, so we create a dedicated operation like this one here, which is purely for our customers to be able to order all their online groceries from’, says Rob Collins, Retail Director of Waitrose. The retailer has plans to open a second dark store soon; Tesco already has six.
The Online Groceries market is now worth £6.5 billion, according to IGD, and is expected to increase to nearly £15 billion in 2018 nearly doubling its market share, whereas regular retailing is only expected to increase by a fifth. Whilst online retailing still only accounts for 9% of sales, it is little wonder that supermarkets are looking to capitalise, with Morrisons finally launching an online operation last Christmas after their seventh in a row of poor quarterly profits culminating in a profit warning.
For those already offering online groceries, the stakes are being raised again. Click and collect is undergoing massive growth, and John Lewis has announced a Pickup Store at London St Pancreas where you collect items already ordered online. Supermarkets like Tesco and Asda already offer services whereby groceries can be collected at Tube stations, as well as a Drive-Thru service where store staff will bring items to your car, in the car-park, without you even having to get out of the vehicle.
‘The first battle ground is all around convenience’, says Andy Street, Managing Director of John Lewis, ‘once you’ve made your purchase decision, you will want it delivered to you easy, hassle free.’
Click and Collect offers customers the chance to get their goods when they want, rather than having to wait for a delivery window set by a courier. This could change the face of retailing over the next 20 years with commodities collected or delivered, and specialised products, such as fresh fruit or steak returning to a more traditional personal buying approach.
It’s not all about the large operations though. The convenience store market is expected to grow by a third over the next 4 years, as more people either live in smaller households or, due to increasing work demands, have limited time to drop in and get essentials. Tesco and others are now looking to capitalise there too, building new ‘local’ or ‘express’ versions of their stores.
Shane Brennan, of the Association of Convenience Stores says ‘we need to meet that challenge head on, think about new ways of competing with that; new offers; how you can be different: particularly for independents, how they can provide particularly local products…’
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