Quick Commerce Part 2: Dark Stores & 10-min deliveries
Recently, I wrote an article decoding the hows & whys of 10-min grocery delivery scene in India. This article is a deep-dive on Dark Store operations.
What exactly are Dark Stores?
Dark Stores are mini warehouses which act as local fulfillment centers for hyperlocal ecommerce operations. They manage inbound and outbound of inventory and often cater to a specific area.
Size: Dark stores are 2500–4000 sq ft in size.
Selection: Selection is limited. A typical dark store has ~2000 SKUs at best as against Full-Basket E-Grocers which have anywhere b/w 4000–7000 SKUs in selection.
Pickers: A dark store has around 10–15 pickers. Pickers are executives who pick and pack the products in an order.
Inventory Arrangement: Inventory is systematically arranged in labelled shelves.
Picking: Pickers line up behind the 3–4 POS systems with a dedicated mobile device. As soon as the picker gets an order, the mobile device guides them with the picking process — products with their shelf numbers and even the picking route.
Packing: Once the order is picked, it is then packed at the packing station. Post this, the packed order is kept in the outbound section.
Last-mile: Delivery executives line up at the outbound section. They are not assigned ad-hoc. They immediately pick up the packed orders and complete the last-mile delivery.
Now, How 10 minutes?
Quick Orders have an Average Order Value of ~Rs 200 and have 5–6 items.
A picker takes around 2–3 mins to complete the picking and packing operations.
Picking Time
Products to pick — 5/6
Distance to travel — 250 ft
Walking Speed — 5 ft/s
Time to pick one product — 10 s
Total time = (5 products x time to pick one product) + (Total distance travelled/speed)
Total Time = (5 x 10s) + (250ft/5 ft/s) = 50s + 50s = 100s
Buffer = 20s
Hence, Total Picking time = 120 s or 2 mins
One dark stores covers a radius of 5–6 Kms, with an average of 2–3 Km. The delivery executive takes around 5–6 mins to deliver the order.
Last Mile Delivery Time
Speed = 40 Km/h
Distance = 4 Km
Time = 6 mins
And finally, they take about a minute to complete the delivery.
So Total Time Taken -
Picking Time = 2 mins
Packing Time = 30 s
Delivery Time = 6 mins + 1 min
Total Time = 9.5 mins
At Scale
Platforms are devising newer models to ensure there are sufficient dark stores for a larger coverage.
- Ownership — A vast majority of these dark stores are 100% owned and managed by E-Grocery platforms.
- Leasing — In this model, Dark store partners invest in real estate and manage the operations (inbound, picking & packing). Platform owns and manages the inventory as well as the last mile delivery operations.
- Partnership with vendors — Another model is partnerships with vendors such as Spar, Niligiris etc.
Questions/Thoughts?
