Bed, Bath & Beyond, Whole Foods Go Dark to Boost Fulfillment

With digital demand putting a strain on certain businesses, retailers are using "dark" stores to accommodate online orders.

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Need to Know 

  • Many retailers are adapting to the new normal by converting brick-and-mortar retail stores into fulfillment centers.
  • Whole Fooda and Bed, Bath & Beyond are two brands that have been forced to utilize “dark” stores to keep up with online demand.
  • Dark stores are open to employees open and used to pick and pack orders for online customers.
  • Due to the COVID-19 pandemic, some retailers have seen online demand increase by upwards of 60% as customers opt for digital services.

Analysis 

As the COVID-19 pandemic continues to disrupt every industry, many businesses are needing to get creative to either make ends meet or keep up with demand. 

In the case of some retailers, online demand has increased by more than 60% (or even 150%) and businesses are hitting record sales. As a result, some stores have needed to pivot their strategy in order to keep up.

Some stores are turning to “dark stores” to serve as fulfillment centers rather than public shops. Dark stores are only open to employees, who go in to package or pick up orders. 

Amazon-owned Whole Foods has turned one location into a dark store to “focus on Prime grocery deliveries.” 

“As we continue to face the challenges associated with COVID-19, we are constantly looking for new ways to meet the increased demand for online grocery shopping and serve more customers,” said one Whole Foods spokesperson. 

Oweise Khazi, director of the Amazon intelligence arm at Gartner for Marketers, said, “Amazon is making sure they are doing everything they can to service centralized demand—this includes the conversion of the brick and mortar stores to serve Prime consumers.”

Bed, Bath & Beyond has temporarily closed the majority of its stores and recently converted 25% of its retail locations into “dark” fulfillment centers. 

“We now plan to invest about $250 million, focusing on our core business and key projects that support the omnichannel future of our company in 2020 and beyond, which are more relevant than ever such as our digital and omni fulfillment capabilities, including BOPIS, curbside pickup, omni-inventory management as well as digital marketing and personalization,” said Bed, Bath & Beyond Mark Tritton, president and CEO.

Dark stores are just one example of how businesses are adapting to the “new normal” in their day-to-day, but companies are changing things up in a variety of ways.

Kroger is another grocery brand that has converted one of its retail stores into a pick-up only location. Target has hired over 70,000 new employees to work as shoppers for its Shipt platform. And Walmart itself has hired over 100,000 new employees to help keep up with demand. 

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