Dark stores

We heard of dark kitchens in the gig economy, so what are dark stores?

Like the dark kitchens they are another creation of the gig economy, which is still in a state of flux. Just that dark stores are a little different.

This has a bit of conflict and controversy surrounding it. Along the lines of municipal planning laws and the sanctity of neighbourhoods. Somewhat similar to Airbnbs.

In early 2022, these dark stores became noticeable to some extent. I first heard of such a store in the Netherlands. And that too when the residents complained about the noise and traffic after hours. I have not been able to find any in Australia but I won’t be surprised our 2 biggest cities with heavy populations densities might have them.

They are a small store or mini distribution centre that has become a transit or drop-off point for final deliveries. Usually hidden from public. No signage or a small one. If you find one, it’s probably because you saw couriers in uniform milling around with their motorcycles and vans at the entrance.

The existence of dark stores is never advertised or told to customers. The reason for this is that no customer is expected to visit it. You probably realised there is one near your neighbourhood when your mobile tracking shows a temporary stop before a parcel or consignment starts moving again and reaches you within minutes.

Dark store in your immediate residential neighbourhood however is different ballgame. It’s the noise and traffic that comes with it that is the concern. These locations are not the high street where rows of retail and service establishments are and where noise and traffic are a way of life.

Issue with definitions

There has also been confusion about what dark stores are.

According to Wiki it refers to large supermarkets distribution centres started by the likes of Ocado, Sainbury and Tesco. The label ”dark stores” in this case was applied retrospectively.

These large distribution centres were in existence before the gig economy became a thing. It involved packing and fulfilling order in the middle of the night as in “the dark” so delivery of groceries and fresh produce can be delivered in the morning to customers.

Ocada led the innovative path to this by their high level of automation. And other supermarket chains followed.

In essence, the supermarket related order fulfilment, packaging and distribution centres are large complexes in industrial estates and not anywhere near residential areas. They certainly are not store size. And they are not the dark stores that is associated with the gig economy or related to this post.

The last mile

Back to the actual dark stores of the gig economy.

These emerging stores are typically former shops or in establishments the size of shops. They occupy a small footprint and they operate close to or in large residential estates.

Parcels and packages are delivered by truck and vans and held temporarily at these dark stores. Local couriers then do multiple short runs to deliver them within a close radius.

There is no packing of products or produce. They are already packed into parcels and packages. The last mile is the crucial in the equation.

Just a caveat here. There is second and newer version of dark stores where packing does take place under the Ultrafast Grocery Delivery genre and I will cover this in a separate post.

If you notice, delivery companies now offer time slots from early morning to late night deliveries. Late night for the convenience of residents who are away at work and no one is at home.

So the day’s consignment for a neighbourhood or large residential district is delivered before the break of dawn to dark stores. The couriers doing the last mile will time the delivery according to the customers chosen time slots. Hence the sight of couriers all day until late in the evening.

When you think about it, it does makes business sense. It affords efficiency for couriers and delivery firms. What about residents?

The Covid factor

When Covid hit, people working from homes began to order things online. Downtown CBD and working locations became near ghost towns. Furthermore lockdowns meant store closures and restrictive measures which did not allow trips to stores.

So businesses go to where the customers are. In this case closer to their homes as working from home (WFH) became the norm during Covid. So the last mile delivery point or darks stores in residential zones made sense

Dark stores

The big difference is unlike in the past, these distribution centres are now much smaller, much closer and often emerge unexpectedly. Typically taking over the lease of a former retail outlet or vacant premises.

The first giveaway sign is the growing movement of couriers all hours of the day and late into the night.

Concerns about dark stores

I did mention early the concerns are the traffic and the noise. Especially at night. The quiet and safe neighbourhood has changed.

Typically zoning laws in developed countries carry rather strict requirements before a business is allowed to operate in a predominantly residential zone.

Foot and vehicle traffic are considered and so are number of parking spaces. In most cases, the type of businesses allowed are small convenience stores, cafes, coffee outlets, pubs, sandwich bars etc.

If you look at it, these very locations are also attractive for the last mile dark stores. So the takeover and conversion takes place especially in older neighbourhoods with outdated zoning regulations and cheaper rents.

So is a compromise possible?

We all know and realise that couriers are a daily part of our lives. Anyone living in a high rise condo or office block will see as they take the elevators that couriers are frequent companions for the ride.

When I lived in London and on my off day, from my apartment balcony I can see a never ending convoy of delivery vans in the mornings right up to 11am. They were mainly from the various supermarkets chains plus Ocado.

Later in the morning right up to 4pm, it will be parcel delivery vans and motorcycle couriers. You can hear the gate buzzer going off often. And this was pre-Covid days.

So can you imagine living 100 metres away from a dark store? What was previously a coffee shop to which people walked to. The first signs are increasing van and motorcycle traffic till late in the evening.

I expect re-examination of zoning laws only when it becomes a problem. Similar to Airbnbs, the immediate neighbours will suffer. I also suspect the younger generation may have accepted it as part of urban living. And they too are also the more frequent users of couriers.

Post note: August 2022

After I posted this in June 2022, the Dutch authorities had began acting on dark stores in residential areas. A number had to be closed down affecting the ultrafast delivery providers such as Zapp and Getir. In mid July Zapp announced it will withdraw from the Netherland as a result. Getir has taken its case to the courts.