How 'Dark Stores' Are Speeding Up Grocery Deliveries | WSJ
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- เผยแพร่เมื่อ 26 ก.ย. 2024
- Speedy grocery delivery is booming, but competition and high running costs could hinder growth.
Startups are promising to deliver groceries to your doorstep in minutes, stepping up competition in the industry. Their strategy: to operate out of “dark stores.” WSJ visits some of these hyperlocal warehouses to see how they operate and the challenges they face. Photo/Video: Michelle Inez Simon
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So basically it's kind of Ghost Kitchen but for grocery.
exactly, can they just agree on a common prefix instead of inventing new ones. Ghost stores would convey the same meaning as Dark stores.
Ghost Kitchen has only 1 location but multiple presence online with different names and brands, but Dark Stores concept is the OPPOSITE, with multiple locations and ONE online presence. So, it's fair to use different names for a different concept, although I do agree that they "feel" similar.
@@Birdylockso wow thank you
Except ghost kitchens usually do not take up first floor pedestrian accessible storefronts, which these dark stores are. Which inherently prevents other local businesses from capturing foot traffic rather than people that "need" ice cream right now.
selecting my own fresh produce is one of my favourite things
Exactly I like to pick my own box of eggs and carton of milk
🤷🏻♂️
Hey don't worry if u don't like the produce we'll deliver more for free.
Make sure you tip your driver 😉
Hi pretty lady
The prices are like 30% higher then in the grocery stores ... so you should buy from local grocery stores to sustain the LOCAL economy ...
I havent observed the 30% price difference with the ones I use. (Gorillas)
Also, they have a specific part of their app to order from local producers which allows me to sustain local economy better than in usual supermarkets.
What if your local grocery story is Aldi - hence German?
well local workers are working in the local stores...what's the difference?
A new industry is trying to be born. And and old industry is struggling to stay alive.
I think once the AI powered fridges are in full circulation, this business model will soar. Just picture this:
• the ai will tell the store near you that you used the last two eggs this morning, and that your favorite drink is on sale.
when you’re back home from work, a fresh carton of eggs and a cold drink is already on your fridge, courtesy of those ghost stores.
I think it doesn’t make sense to many, because they are seeing it as a grocery store competitors. They’re not. They’re in a totally different industry.
They’re not selling you groceries. They’re selling you time. Your time.
@@k9zen I’d agree, I see drone ports that will deliver the goods so it will be like Star Trek where you say what you want and in a few minutes you just open the door and there it is…like how they had flip phones, and cds on the show it was quite advanced
The video would have helped with comparisons of items. For instance, how much does one apple cost in a conventional grocery store and how much does it cost in one of these stores? This could have been done with milk, cereal, etc. It would have helped give a sense of how durable this business idea is.
I am using Gorillas and the prices are the same as in store for now.
@@mickaelgodard
"For now" being the key phrase
@@ido5139 yeah but there is no commitment, so I can change if the situation change. For now, i enjoy using the service and paying very little fee (a couple of euros per order). That doesnt cover the cost overall but I am more than happy to take my share from the investment money that way. ;-) i just make sure to tip the carriers because i think it is a tough job with low pay.
@@mickaelgodard sure, I sneered at the unsustainable business model rather than you taking advantage of the fierce competition. I actually interviewed for on of these companies as a product manager, and would probably accept if I receive an offer. Experience shows that in this day and age companies can run for years on VC money
@@mickaelgodard different stores have different prices. If you’re already overpaying for your groceries, then this obviously won’t make much of a price difference.
Meh, I still prefer going myself. I don't like paying 50% more for already expensive groceries.
You are the best pal I prefer going myself too ✌
Dark stores? Sounds ominous like drug dealers… when I was growing up my mom could get groceries delivered to her doorstep within two minutes. It was called “run over next door and see if Elsie has two eggs (or a cup of milk, or half cup of flour)”... but then a day or two later after mom visited the grocery store, I’d be taking the same item back to Elsie to repay it
If I'm able to shop for myself, I will. I find it enjoyable to pick what I want, when I need. Plus the money saved on delivery can purchase more of what I need or want.
Cool
Lol they'll just keep pumping vc money till they are the last ones standing, then IPO at an absurd valuation and then keep running the unprofitable business.
True
😂 Probably, for a while.
Then they'll get acquired by a larger public company.... 🤞🏼😎
An unprofitable business like amazon?
stonks only go up
and on the backs of workers who don't know any better, too
groceries are inherently a low-margin business except for items like alcohol
will really depend on whether they can get enough selection and hit large average basket values (like at walmart / whole foods)
Not really, some of the products got jacked really high up to 100%. Cotton buds or toothbrush for examples. 😠
Or whether customers are willing to pay enough of a premium for the convenience. To a lot of people, an extra 20% on their grocery bill is meaningless to them, if it magically shows up at their door
Not at all. Some of the halo products are low margin. The rest is not. Narrowing down assortment and you, yourself who values your time more, easily weigh each other out. I live in Berlin and have not been to a grocery store in 1,5 years. And I don’t miss it at all… better stuff to do.
I still like going into the grocery store myself
Wow you are so unique and special.
@@thivyaprasad1414 yes
@@thivyaprasad1414 who hurt you
You cant shoplifting online groceries 🙈
@@sn5301679 You can rob the delivery person 😅
Why does anyone need a stat order of cereal and a can of tomatoes in 10 minutes?
Why not?
two reasons I could think of: 1) a lot of people do not plan ahead for their meals so it's convenient to just order right before cooking, and 2) it sounds COOL these days.
“Dark store” sounds like it’s on the darkweb 🤦♀️
Right. I was very disappointed that this isn't convenient one-stop shopping for my monthly supply of explosives and poisons.
I's just a play on "Dark kitchens" (also known as "Cloud kitchens").
This definitely exsits where I'm living in Europe. The local food delivery app has an "express" option. They will literally deliver in 10 minutes.
However, it's a lot more expensive and only good if you need something right now. I often go for a local grocery store instead because it's cheaper.
Why do we need "superfast" delivery?
Do I really need next day shipping for a pair of headphones or a toaster?
What's the price to society and the environment?
Oh wait...this is the Wall Street Journal.
Some people do/want.
Not to mention the whole system is based on (borderline exploitation of) lowest level employees doing long hours, under a lot of pressure, for very little money
It's an option. If you don't mind waiting you're free to choose that option for slow delivery. Have a nice day
@@sonydee33 Completley missing the point.
NO ONE needs a damned toaster overnight. Bezos is a psychopath, but in the US guys like him are held as heroes and geniuses.
@@kentstallard6512 then get off the internet you 🤡
Never once during this pandemic did anybody deliver or shop for my groceries. The only change in my behavior was no more leisurely browsing--something which I recently resumed.
Depends on the premium I have to pay. If you ask me to pay 20-30% premium for an apple in 10m, I'd rather take my supermarket price delivery within 3-5 days. There isn't any rush to get that apple. It's all relative
in the US, you can do same day pickup, depends on how busy they are
agree, I don't see the need for groceries to be delivered speedily
This is the classic type of business that will never generate meaningful profit but the last or 2 last survivor's business will have a huge evaluation. Just like Uber, AirBnb, Doordash,etc these businesses will never generate any money but their founders all got rich.
My bet's on Amazon just taking their business model and wiping these other players off the map. The problem with these delivery companies is there is nothing proprietary about the operation and anyone can come in and scoop out the market underneath them.
I don't see this working in cities in US outside of NYC .. but at the same time New Yorkers love their bodegas. Can't imagine this being big in the UK right now with gas prices up by 90%
Too true, a lot of New Yorkers are fiercely loyal to their local shops, especially given you know you can support an independent business vs. multinational corp operating at losses and not supporting sustainable jobs for people in the area.
Talk about free promotion! These companies just won the jackpot with the WSJ informing their 3.1M Subs! CHA-CHING!
They probably paid WSJ to do it lol
First time seeing a media piece?
This happened before anyway? Supermarket delivery was always picked in large warehouses for delivery.
It sucks that this is meant to happen in such a short time tho.
A very similar concept to Honestbee (no longer in operation) which has footprints in few Asian cities. It fulfills orders via neighborhood grocery stores. (Delivery time within 2 hours) .
Instacart also works with local stores to deliver groceries while supporting already existing independently owned stores.
Something quite aligned to alibaba's Hippo. But, profitability would be huge question!
So why is this called a dark store when its literally small warehouse?
I assumed it was because they only had one brand of each product (eg. a no name store) but... um, I have no idea what they're offering other than a delivery service.
it's cause they operate in the "dark" to the consumer's eye
I used to work at one and only employees (pickers + riders) are allowed inside and they're generally low profile storefronts
Trying to make out it’s like the dark web.
Click bait
@@beyondtheclouds95 Thats literally how wearhouses work, only for employees and authorized personel
Something like "ghost kitchens"
Interesting, never heard of this. Learn something new everyday, i will have to look further into this.
It's become huge in Europe over the past year. A dozen large players. The concept became popular in Turkey first several years ago, and according to the CEO of Getir they achieved profitability there last year.
Dark stores sounds cool. Urban retail warehouse (what it actually is) does not.
ten middle men are better than one?
If you're among them, yeah, probably.... ¯\_(ツ)_/¯
Hope the best for these startups. Amazon and those other conglomerates need competition
Just wait till Amazon buys these companies. 🤣🤣🤣🤣🤣
@@deadringer2349 hahaha. True
This is a bubble just waiting to burst.
How so?
1:20 while many …. Hm Amazon.
I keep seeing more ideas originate from Asia these day. Funny thing is they keep invent a new word for investor. Good luck if it works.
did this trend start in Asia?
@@Born2Prank1 Asia have a low labor costs and low safety regulations make it the best place to experiment many business idea.
Everyone is betting on the next Amazon, Uber, or Tesla for grocery deliveries. They don't call them Unicorns for no reason. Good luck to the investors.
Admire their hustle.
I don't know why, but whenever I see videos like this, all I think is how they're all built up on the backs of employee exploitation. You mention a big player in this field, Amazon, and it's not like they're known to borderline torture their employees (amazon warehouses and fulfilment centers)
I enjoy grocery shopping not everything has to be app orientated Sheesh, some people like going out and having interactions
And some people don't or simply can't due to personal circumstances. It's good to have choice.
Update 2024; Getir just bailed on Chicago.. the 3rd largest city in the US.. this model is failing.
This is a great modern version of the milkman. How can you say it will not be profitable? People, especially the elderly, will use this service until the end of their days. There is a fixed demand in the market for these services. If you add convenience and an app, you have a winning combination!
Old people are the least likely to use this. How many old people do you know use Uber over a taxi or public transport? Exactly.
@@ILoveTinfoilHats I think you just changed the subject. We are talking about food delivery my friend!
@@GibsonArtola My same statement applies. How many old people do you know use Uber eats over going somewhere or phone ordering?
@@ILoveTinfoilHats Not many, but give it time my friend. Smartphones became popular only 15 years ago!!! (Even though there were some out there over 20 years ago.)
@@ILoveTinfoilHats Old people today might not use it much, but old people 5 to 10 years from now will be much more tech savvy because today's middle aged is tomorrow's retirement age.
Transactional analysis is painstakingly ignored...... That makes me wonder when the WSJ will hire journalists again?
BTW what is the past history of this niche? (A journalist would find out) I recall the first brand I ever saw in this category about 30 years ago. No, it did not make it.
In the Grocery business the center store, GROCERY department with cans and boxes makes about 1%. Store branding is the key to that department making better money than 1%.
The outer departments around the perimeter, Produce especially, make the money and keep the store open. (Most floor designs walk you straight into Produce, the money maker.)
How do these companies handle produce, dairy, meat, frozen, and alcohol? What GM products do they sell? What is their departmental ratio compared to 'regular' stores?
Dark stores are the 2020's equivalent of Webvan.
This will not be profitable. "Dark stores" that rely on robot pickers and can fulfill many online orders spread over a huge metro area will displace these. Ten minute grocery delivery isn't even needed. Getting a daily grocery delivery with the order put in a day before is *much* more cheaper and feasible than this model. Fresh is good, but even spinach will keep for a week in the refrigerator. Depending on your family daily grocery delivery isn't efficient even.
I go multiple times a week, also because my grocery is about 30 meters from my apartment in NYC. This is the other factor many forget, a majority of workers still will commute to work, otherwise the city has other major issues to tackle. Therefore if I commute, I walk in front of a grocery, I go in and buy, rather than walking past the store, getting home, scrolling through an app then waiting for someone to deliver and unpack. It's nonsensical
i'm old enough to remember Kozmo!
How much do they pay the employees?
New Zealand has been doing this for years
I own a delivery company in Ethiopia ...can you give me some advices on how to increase our sales and attract more customers??
What about use by dates? You want at least a 6 month gap for chocolate to still taste good. Do you have that option here?
This will disrupt retail
This is similar to what SkipTheDishes is doing with Skip Express Lane!
Completely ignored Getir, which is the biggest player in the field in Europe and one of the first companies to operate in the sector...
Well, that's to be expected. The media doesn't give Turkish companies coverage because they don't want it to bring them awareness. But that's also a positive, because whenever English-language media brings light to Turkish business/products that sends the Turkophobe lobby on overdrive to sabotage it.
That's something most Turkish people and entrepreneurs don't seem to understand much and are completely naive about. That's why I disagree with Getir's planned strategy for opening up in the largest US cities this year. I think they should avoid California, D.C., Chicago and the Tri-State Area outright and go for Minnesota, Ohio, Florida, Boston, and Canada (Ontario, Ottawa, Quebec) and only after gaining traction there expand to NYC and the rest the of the US, and avoid California and Washinton State permanently. The former because of the large Turkophobe presence and the latter because of the Amazon "home soil" factor. The two areas are also tech hubs and you don't want them seeing Getir and getting ideas, whether to copy them or sabotage them.
Nice video.
I would be interested in knowing what is a comparable service like this in the states. I know Go Puff is stateside, but they advertise snacks on demand not groceries. I like the idea of having large, heavy items delivered to my door like cat litter, laundry detergent, or charcoal briquettes. Not my produce! I wouldn't trust the quality.
Gorillas is in the US right now in certain areas, depends on where you live if the market can be sustained and is densely populated.
Other nearby shops will suffer
Wait until Amazon acquired this
I think another reason is chain supermarkets jack up some of their prices way too much. So I guess some customers notice that difference and chose to buy in smaller shops. Same or lesser price with ultrafast delivery, why not?
you have to pay a premium for the fast delivery and thus prices are usually higher than conventional supermarkets
Man lack patience don't we?
That was after editing?
I don't trust anyone that pauses on the word "of"
Or you could just plan ahead and buy what you need once or twice a week... Nah... Would rather spend 30% more.
Vcs pouring all this money into these startups bc they know Doordash is eventually going to buy them out.
More videos like this please. Cheers! :-)
Printing out a receipt for a digital order? Yeah, don’t see a problem there. LOL! I see some growing pains already.
Go puff sucks! Every time I tried to use them it says no drivers available
How they're also skipping out on state and local taxes, by using holdings companies carry leases, while business licenses are held by other shell companies and the actual profiting business is nothing more than a consultant/vendor to themselves. It's anti-competitive to cheat and claim legal loop-holes are fine, state and federal lawmakers need to act now!
Overpriced and not practical for most. Walmart offers cheapest delivery prices.
The goal is not to make a profit. The goal is to sell it to a large company (to get an exit). We're no longer in a profit driven economy. It's a asset valuation economy.
Supply and demand no longer exists. I like to call this the "shine and scam"
We already have Meituan, Eleme, Jingdong to home in China
But they are more expensive than buying it yourself!
Yet few will deliver to my non-metropolitan area.
The idea which appeals to a limited market, that you can't patent, and has lots of competition. What's not to like?
i don't think the speedy grocery is a great idea as there's usually not a major need for groceries to be delivered speedily unlike say takeaway
How you guys came up with "dark Stores" instead of small Wearhouse or something or some big giants paid you to defame this new model.
Or make it sound cool...
I would’ve called them ghost stores
Delivery startups are not a sustainable business
Amazon will buy them up. They’ve been doing Prime Now for years, they buy these up, they’ll be even faster and already have the drivers and platform
The prices are ridiculous I just used their promo to get £40 worth of shopping for free then deleted the app
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D2c is saving them time
So basically this is like amazon prime now?
Exactly, but add the patience of a goldfish on top, then you got Gorillas
This would be great in the bronx an poor area of Brooklyn
I guess it's for handicapped people. Other people need exercise, and shopping is one way people can avoid being too sedentary. I certainly wouldn't want to order groceries online. I cook fresh. I don't want strangers choosing the meat and vegetables I feed my family. Who dreamed this up? Ridiculous!
Does consumers really GET SAVINGS in competitive supermarkets.BARGAIN prices ?
Amazon, Square,…. We don’t think these companies business’ models will be profitable 🙄
Not even a good comparison.
We’re going back to the way it used to be done.
When and where was that?
I don't understand why big chains don't outsource there delivery to these dark stores.
No thanks! Id rather get my groceries from a reputable store
5:29-5:34 Hey, WSJ. You left your camera in the Weezy grocey bag! Lol.
Only companies that are profitable should be allowed to list on stock exchanges. This way small investors won't get burnt.
Thank for the comments. Much appreciated. Feel free to massage on whats/app/ Text for questions, investment guild and tips.
And no shoplifting 👍
God loves yall and Jesus Christ is returning soon and repent before its to late.,
Is he returning soon with a fresh baguette?
So you spend time stocking the store... and pay for the rent on the store... I don't get it
All of these companies went bust
The voice is so soft.
Didn't they try this with dominos pizza. 20 minutes or it's free?
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That's a great idea, I hope it is successful. I live in a more rural area, so I don't know if I will see it anytime soon, but I'm rooting for it!
In a rural area, the distances between customers and the warehouse would limit the ability to actually cut into a meaningful market against established grocers. It would likely have quite high mark up or delivery fees to offset the number of deliveries / workers they can deploy in a day.
I think it doesn’t make sense to many, because they are seeing it as a grocery store competitors. They’re not. They’re in a totally different industry.
They’re not selling you groceries. They’re selling you time. Your time.
AI powered fridges are already out there and as the tech gets better, this business model will soar. Just picture this:
• the ai will tell the store near you that you used the last two eggs this morning, and that your favorite drink is on sale.
when you’re back home from work, a fresh carton of eggs and a cold drink is already on your fridge, courtesy of those ghost stores.
• you order takeout for the friends and family every Sunday. Instead of spending time on the app, the ai fridge asks you if you want it to order for you, and every Sunday, it’s done. The ai knows everyone’s favorite dish or snack, so no more need for Uber eats or door dash.
Now I don’t have to spend the extra 10-15 minutes of going through traffic or long lines at a store. Or 10 min on an app. I can spend that time with my dog or my family. And those little moments add up.
Just like the electric car vs the gas motor car, A new industry is trying to be born. And and old industry is struggling to stay alive.
The problem is thinking that people spend significant additional time getting groceries, where many people incorporate it into their commute or other normal things they have to do - laundry, groceries, pick up kids, etc. Example, I pick up groceries on my way from work, having several local and chain options to choose from on my direct path. The only cost to me is the physical time in the store, which is offset as that time & value is not directly replaced by services like gorillas. I get to price compare (without having the number of products I can see limited to my phone dimensions), compare nutrition, pick particular produce, talk to the deli worker, say hi to a neighbor. Gorillas is inserting themselves as an additional factor, not removing one. For someone like me, keeping an app on my phone for the 1 time a month or once every several months I forget something at the store or crave something that I just cant keep myself from immediately having is a waste of phone space. my hot take :)
You know walking to the grocery store and returning with heavy grocery bags is pretty good exercise.
These gimmick technology are just making lazy every day.
Early mover (not necessarily geographically) will always have an edge over the competition. Players with largest data gathered from multiple mega cities will eventually win the market; venture capitalists know this and try to pick and feed the winner.
Oh... you mean amazon?
@@fannalisekeating8376 Amazon is not in the instant delivery business. It’s just an online retailer.
@@nabican They do delivery within 2 hours for prime members in my area. What was meant also is that Amazon can easily adopt the instant delivery model to compete as well given their move into local warehousing for faster local deliveries and they have the incredible amount of data that is needed to refine this system
Girl drops what looks to be a cookies box at around 1:53. Careful with those items, guys...
LoL, just kidding...
Instacart delivery hubs?
I think people has become lazy going to a shop.
Why is the uniform and branding hype af tho
Specify the goal and need money