By Kushal Nahata, CEO and Co-founder, FarEye
Nationwide lockdowns across the globe have emerged as the most effective to curb the spread of COVID-19. But it comes at a cost. To ensure safety, people have confined themselves inside their homes. Things like going out to buy groceries, medicines, and other essential items have become difficult if not impossible.
Getting essentials delivered online is becoming the most convenient and safest way to buy essential items, especially for those heavily affected by the ongoing pandemic. Online delivery businesses and retailers are now under tremendous pressure to scale operations at a time when transportation activities and their own supply chains are getting heavily disrupted. Retailers are not shying away from informing that they are not able to cope with the sudden demands. Delays in delivery, no-empty delivery slots, order cancellations and failure to incorporate new orders in their existing workloads are becoming common challenges for retailers and online delivery aggregators. The ongoing pandemic has been creating waves of havoc across the online delivery ecosystem. Businesses were not ready for this. There are no contingency plans in place. There is no one business to look up to and follow suit, as no one has experienced a pandemic in the past 100 years or so.
The pandemic will definitely have socio-economic ramifications. That’s inevitable. But what’s equally important now, for businesses selling essential commodities, is to solve the immediate challenge–getting delivery operations up and running as fast as they can.
A logical solution to the problem, something that some businesses have already started doing, is opening up dark stores and it’s especially important when it comes to ensuring seamless delivery of groceries. Delivering groceries is complicated. Some items need refrigeration and some need to be delivered frozen. Then there are items that are gluten-free and some with gluten. Vegans have separate demands, and so do non-vegetarians and vegetarians. Grocery stock-keeping-units include far more items than traditional orders. Grocery deliveries also present challenges around ensuring that orders generated are already in stock and can be quickly processed for picking up; making sure that grocery items reach customers without any product degradations; and ascertaining that the right order is being picked up for a particular delivery. Last but not least, stores must guarantee that the grocery items reach customers in the promised timeframe.
Surging demands amid lockdowns have made inventory management extremely difficult. One way retailers are dealing with this challenge is by opening ‘dark stores.’ Dark stores look like supermarkets but are closed to the customers. As these stores function as mini-warehouses that are closer to customer locations, pick up orders are executed faster, and automating pickups within these stores makes inventory even more efficient.
One dark store can be treated as a one-stop-shop for several other stores when it comes to fulfilling an increasing demand for online orders. Picking up orders from one dedicated location is much easier and cost-effective when it comes to doing the same through regular stores. The entire process of identifying racks (where a particular item is kept) to picking up orders is done rapidly in dark stores, especially because delivery stakeholders do not have to compete with in-store customers to get what they need.
Savvy businesses are also introducing robots to execute pickup processes inside a dark store to further shrink delivery cycles. A dark store is mostly situated on a curbside-location, making it easier for retailers to quickly access customer locations and optimize delivery turn-around-time. The performance and efficiency of a dark store can be further improved by analyzing data pertaining to the purchasing behavior of a particular locale. This will empower retailers to become extremely agile and proactive while managing inventory.
Kushal Nahata, CEO & Co-Founder, FarEye
As the CEO, Kushal is responsible for driving the vision, strategy, and growth at FarEye.
A dynamic leader, Kushal drives the culture of ‘customer-first’ at FarEye which enables the team to deliver value to its 150+ clients globally. He is an effervescent thinker who is passionate about enabling the digital transformation of logistics enterprises and is constantly working towards empowering companies to champion operational efficiency and customer experience.
Under his leadership, FarEye has achieved a 300% growth rate with an impressive geographical expansion. Kushal enjoys training budding entrepreneurs and guiding them through their journey. He has been mentioned on the 30under30 and 40under40 lists by DataEconomy & BusinessWorld. He has also been recognized as the ‘Top 100 Emerging Voices Of India’ by YourStory for consistently voicing his thoughts, opinions, and vision for the logistics industry and contributing towards the powerful growth of the sector.