How Can Big Data Help for Dark Store Site Selection?

E-commerce for retail stores have skyrocketed since the pandemic, and many ecommerce stores have witnessed tremendous growth of their e-commerce stores. Many people know that their stores can be excellent fulfillment centers as they have the advantage of being close to the customer. They are even more efficient when it comes to traditional stores.  

Dark stores, in this instance, can be great solutions and can help to drive efficiency in terms of online picking. They can also accelerate the profitability of existing stores and e-commerce businesses. Before you get the importance of geospatial data for the success of a dark store, you need to understand its concept. 

Dark Store

Dark stores are locations that serve the sole purpose of online fulfillment. They are ideally located near customers so that quick deliveries can be possible. The reason why you call them “dark” is that most customers do not enter the store. Instead, the store only exists for pickups and operations.

It does not provide the public with a viewing space for retail activities. In the United States, the numbers of functioning dark stores are 200, and in China, there are a total of 2000. If you want a Dark Store to be successful, you need to consider a few factors. 

Location Matters 

Site selection is critical when it comes to opening Dark Stores. You need to go low in terms of the quality of location and not focus on retail locations. Since you will not be hosting customers at Dark Stores, lower grade and industrial locations can also work.  

Oftentimes warehouses and storage units make for the best dark stores. You need to make sure that you are paying the minimum rent or price for the dark store’s space. Moreover, you also must make sure that you can move inventory in and out of the store easily. 

You may be interested in “Case Study: Site selection model for retail stores” 

Ideally, low costs spaces that have easy entry and storage space are perfect sites. Do not go into Dark stores with the retail site selection in mind. Your Dark store location should be cost-effective, functional, and spacious for inventory. 

Site Selection According to Online Demand

Another important site selection criterion involves online demand. In terms of Geospatial location, dark stores are most successful when they exist in regions with sufficient product demand. This allows companies to shift out of existing stores so that they can get the dark stores to get 80% of their breakeven point by the time it opens. 

Also read: “Coffee Shops: Site location using mobility analytics” 

In other words, companies need to make sure that they do not open their dark stores unless they already have 80% of the demand you need for that facility to break even. Finding out the zones where the online store demand thrives includes conducting a thorough Geospatial analysis. 

PREDIK Data-Driven has helped many businesses solve their site selection issues and make sound decisions on where they will generate the most revenue. Contact us for a consultation from our experts. With data at hand, you can invest in a location that is most likely to offer the best returns.