“Dark Stores” and “Ghost Kitchens” may draw up images of dimly lit and mysterious markets or spooky, Halloween-themed restaurants. Fortunately, dark stores and ghost kitchens are simply a new wave of innovation in retail focused on meeting customer demands for fast delivery while decreasing costs for business owners. Dark stores are not open to the public, instead focusing on online-only sales and fast on-demand delivery. Ghost kitchens often operate like dark stores, but also offer an opportunity for established restaurants to test out a new concept or rent out their kitchen space to widen their market reach.
At a glance, the inside of a dark store looks almost identical to a traditional retail store. Products line the shelves, but instead of price information each label only has a barcode. There’s no registers or check-out area, and instead of being placed close together, similar products are spread out to avoid confusion. Dark store employees, or personal shoppers, maneuver through the aisles fulfilling multiple orders at a time. Then these items are delivered to the customer.
For business owners, dark stores and ghost kitchens can reduce several of the costs associated with traditional retail and restaurant business operations. Because they are not open to customers, these businesses can operate with a smaller floorplan, reducing the high costs associated with rent. Additionally, dark stores do not have to worry about foot traffic, allowing them to set up shop in less in-demand areas, again saving on rent.
Some of the issues associated with allowing customers in stores, including potential for theft and increased wear and tear, are no longer a problem for dark stores. Ghost kitchens don’t need to invest in dining furniture and silverware and can share ingredients between multiple restaurant concepts. The dark store model also solves issues related to stock and inventory — when a product is placed into an order by an employee, it is scanned, and inventory is automatically updated. Less employees are needed to properly run a dark store or ghost kitchen, reducing costs associated with payroll.
For consumers, dark stores and ghost kitchens can offer both an increased variety of purchasing options and greater convenience. Rather than spend time going to a traditional retail store, navigating both the commute there, cramped aisleways and other customers, dark stores allow customers to make an order from the comfort of their own home, receiving their delivery in less time than it would take to make it to the store. Intelligent inventory technology saves customers the disappointment of making a trip for an out-of-stock product. Ghost kitchens aren’t limited by a single menu, offering a wide variety of types of cuisine, and dark stores are able to stock a variety of products rather than focusing on one market.
Dark stores and ghost kitchens are an appealing business opportunity, particularly on college campuses. With delivery times rapidly decreasing (established businesses are currently aiming for delivery times as low as ten or fifteen minutes), dark stores can deliver that last-minute Blue Book needed for an exam, or a late-night snack during a busy finals season study session. Because campuses usually cover a small and densely populated area, dark stores can offer fast delivery and low fees. Rents are high on college campuses and business owners will benefit financially by reducing rental space or avoiding competitive areas altogether. Dark stores and ghost kitchens also offer an appealing part-time job opportunity for students, with a flexible schedule to accommodate class and study time, and social opportunities to meet other students while making deliveries.
Business owners operating dark stores and ghost kitchens will need to ensure that their delivery services are able to match demands efficiently and offer low costs to customers. Combined with reduced operating costs, dark stores and ghost kitchens can increase efficiency while reducing costs by utilizing modern technology which can provide Vehicle Route Optimization (VRO), crowdsourced delivery drivers, and delivery robotics. For the unfamiliar, college campuses can be a confusing and hectic environment to navigate. VRO can assist in providing specific directions to buildings and planning routes to account for the atypical traffic caused by students going to and from class.
Crowdsourced delivery drivers allow dark stores to meet the ever-changing demand for deliveries that come with student schedules, rather than have multiple drivers sitting idle during slow times and too-few drivers to meet demand during busy hours. Delivery robots offer a unique solution, utilizing machine learning to navigate streets and keeping products at temperature. Delivery robots can particularly thrive in college campus settings, where navigation is often difficult for cars and buildings aren’t always open to the public. In trial programs done at the Ohio State University, orders placed for delivery by robot were double the number of orders placed with traditional delivery drivers.
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