I’ve started articles like this for what feels like a lifetime but at the time of writing, the UK is still in lockdown and life as we knew it is locked up behind closed doors.

For those in retail and more importantly those that have traditional storefronts things are for want of a better word unknown. Even when we get out the other side of this who really knows what will happen to bricks and mortar retail. Some analysts are predicting a bounce back and others are saying it is the beginning of the end of what we once knew.

If we take a look at what has been happening over the last couple of weeks this uncertainty is further concerned. Planning applications for new shops have plummeted by 22% across England over the last 12 months and in some areas, it is as much as 94%.

Further to that online retail businesses have been on a buying spree, snapping up big household high street names taking them online and leaving behind empty shops. For Arcadia the number is 500, for Debenhams, it will eventually be 124.

This is going to leave a big hole in the retail footprint, and it could drive a knock-on effect for those stores surrounding the closures. The big question, what do we do with all this space and what could retailers do with the space they currently have. One possibility could be to turn them ‘dark’.

 

What do we mean by ‘dark’ retail?

This might be a new term to many, but it could be one that we all become very familiar with. ‘Dark’ retail or stores are essentially locations in places where traditional retail may have existed, but they’re not open to the public in the usual way.

The reason they exist is to support the online operation of the business, becoming local distribution hubs. By using them in this way you’re putting the product closer to the customer meaning that you can get it to them faster, in a more economical way whilst allowing the customer to shop in the way they choose too, online.

It also means that you can utilise staff converting them from serving customers face to face and dropping them into the fulfilment process. It allows for localisation of service taking the personal touch that one step further than most and in times of lockdown you’re not restricted to the same rules that have plagued retailers.

 

I’m interested, but does it work?

There are numerous examples of this taking place already. Crosstown Doughnuts is trialling it right now. They’re setting up the trials in Cambridge and Walthamstow and if successful they have plans to expand the delivery hub model to other areas within reach of central London, such as Oxford, Brighton, Richmond, Croydon, Chalk Farm and Chiswick.

The business has seen direct-to-consumer (d2c) online ordering revenues increase by 600% compared to 2019 and by creating a network of ‘dark’ retail locations they’re able to expand their 1-hour delivery to a much wider net of customers.

Amazon has a history of using this type of distribution in the USA, having taken over an unused mall in Akron, Ohio turning it into a fulfilment centre and they’re continuing to look at ways of using this model in locations where anchor tenants of malls no longer exist leaving vast retail spaces empty.

The key to making it work is being able to deliver on the promise and that means creating an infrastructure that can support this method of doing business.

 

Getting it to work for your business.

As Cegid Marketing Director of Retail Tania Oakey puts it “rapid acceleration has exposed the retailers across all sectors that were late in terms of the digital adoption and omnichannel strategies.

Capabilities such as click and collect and ‘ship from store’ are key but require sophisticated POS (point of sale) and OMS (retail order management systems) solutions to act as an anchor. Having a unified commerce solution, with a single view of your stock across the whole of the organisation, is key. Having that visibility to decide where best to pull stock from for your consumer is decreasing logistics and sales costs. Retailers can improve margins from three to 10 per cent.”

If you’re going to have the locations closer to the customer, the system needs to be able to figure out which location is closer, send the order to that location and get it out the door quickly. Without this, you’re not using the idea of ‘dark’ retail to its full potential.

 

So, is the future of retail ‘dark’?

It is hard to argue against this. Adoption may take time, but it is easy to see how savvy retailers could take advantage of this idea.

Decreasing sales and logistics cost whilst improving customer service levels and dependability is all good news. The reason services like JustEat and Deliveroo have done so well is that it gets the product to the end customer quickly. This is building a habit for the consumer and if you can do the same with your products, you’ll become an invaluable asset to their lives.

If this is an idea you’d like to explore for your business, Eclipse can help. We’ve got teams of commerce experts that understand the end-to-end process and what it takes to put this type of process in place.

We can help you discover what it could mean for your business and help consult and develop the strategy that will get you there. Just reach out and talk to us. We’re always here to help.