COVID-19: the rise of drives and dark stores
June 03, 2020
June 03, 2020
The global COVID-19 pandemic and the containment introduced in March 2020 have significantly changed the consumption habits of the French. The health crisis has resulted in the explosion of e-commerce for consumer products, usually consumed mainly in supermarkets, in the face of social distancing implemented by the state.
Large retailers have therefore had to adapt their business strategy to this new standard of public behavior and some companies have understood how to adapt to continue to meet the demands of their public, while respecting the health standards put in place.
In recent years, the already existing drive system has been expanding rapidly. For the big names in mass distribution, it represents an opportunity to become visible in the capital and large metropolises where traffic difficulties make their establishment complicated, if not impossible. This enabled them to offer an offer equal to that of peripheral warehouses and hypermarkets, while expanding their clientele, different from that encountered in stores.
These new distribution points, which have to apply specific logistics, make it possible to extend the catchment area of the stores, in large cities where it can sometimes be very small (for example 500 meters in Paris).
From the start of containment, non-essential brands found themselves forced to lower their curtains. In order to remedy this closure, while responding to state health instructions, local stores quickly implemented the drive-through system to continue serving their customers.
When these drives were launched, the service rate was impacted by unavailable products and restricted ranges. Faced with an overall increase in sales of 300%, the basket to order increase was 25%. However, the unavailability of products during delivery actually pushed this increase to 3.5%. These ruptures created frustrations among customers, who remained relatively understanding due to the health situation, which allowed the 500 pedestrian drives in France to reach an average turnover of € 35,000 per week.
Drives, whether pedestrians or cars, therefore accounted for 80% of the increase in general food e-commerce during confinement. A success that was quickly applied to specialist superstores thanks to the advantages that the drive system offers: reduction in waiting time in the store, compliance with sanitary instructions, limitation of contacts, etc.
For these new distribution points, a new logistics organization has been set up. It was necessary to quickly upgrade the skills of employees in order to move them from missions of organization of sales areas and advice to logistics missions of order preparation.
It is necessary for these companies to put in place new inventory management strategies: it is now necessary to control the stock of reserves, shelves but also of the back orders.
Some stores with reduced footfall then turned into real order preparation warehouses: dark stores. These stores are partially or totally closed to customers and employees use the stock on the shelves to prepare orders.
The main issue of this logistics is the reliability of stocks. It is essential to know all the information concerning the inventory status in real time, in order to be able to find a balance between the cost of the service, a satisfactory service rate and an availability of the stocks. It is therefore necessary to think of equipping points of sale with dematerialized logistics solutions to manage stocks simply and efficiently.
If customers accepted degraded service conditions during the confinement period, the post-confinement pedestrian drive service must put the customer experience back at the heart of its concerns, to make it a commercial lever to install and develop sustainably. this mode of sale. It is therefore necessary to optimize this service, without impacting the traditional in-store sales service.
If this mode of sale were to take a lasting hold in French consumption habits, we could then imagine the stores becoming local logistics hubs making it possible to serve all sales channels and all distribution methods.
The health crisis and the confinement have brought about changes, by accelerating the installation of already existing pedestrian drives and by creating new points of sale which have been able to adapt quickly to the new constraints they impose. The rise of drives and dark stores during confinement reflects the need for large and medium-sized stores to increasingly adapt to new ways of consuming.