The Telegraph's report of Tesco's decision to open customer-free stores (called Dark Stores) is a major indicator of the growing success of their online home-delivery operation. Remember when they and JS decided to enter online retailing, JS made the 'fatal' error of attempting to set up a parallel virtual store network to serve online demand, thus making it difficult/impossible for the new venture to cover the additional overheads fast enough for the City. Meanwhile, Tesco decided to 'make do' with their existing store network, allowing their online-pickers to share store access with real shoppers. As a result the project broke-even early. Given that Tesco currently gets 475,000 orders online per week and 3.4 million visitors to Tesco.com, the company are now obviously at a stage where bespoke stores will allow them to optimise space and customer service.
However the new 'dark stores' raise a couple of issues for suppliers:
1. (Tesco spokesman: '…not the same point-of-sale advertising…' This means there could be some other form of product-prompts in the aisle, (in cases of Out-Of-Stocks?) and how might it differ from normal store POS? One idea might be to colour code shelf-edge price labels to reflect (darkness permitting!) gross margin or favoured suppliers…?
2. Role of Brand: if the brand is meant to attract the customer into the store, there to be confronted by the private label equivalent (better/cheaper than brand) and the possibility of a switch-sale, the supplier's use of shopper-marketing in the aisle can help to reduce the odds on losing a sale to a private label. The dark-store environment removes that facility…
This suggests that suppliers need to find a way of opening a 'dark-store dialogue' with Tesco in order to attempt to maintain the status quo as the business shifts online... This means gathering evidence via store visits.
One way might be to sneak into the store under cover of darkness?
However the new 'dark stores' raise a couple of issues for suppliers:
1. (Tesco spokesman: '…not the same point-of-sale advertising…' This means there could be some other form of product-prompts in the aisle, (in cases of Out-Of-Stocks?) and how might it differ from normal store POS? One idea might be to colour code shelf-edge price labels to reflect (darkness permitting!) gross margin or favoured suppliers…?
2. Role of Brand: if the brand is meant to attract the customer into the store, there to be confronted by the private label equivalent (better/cheaper than brand) and the possibility of a switch-sale, the supplier's use of shopper-marketing in the aisle can help to reduce the odds on losing a sale to a private label. The dark-store environment removes that facility…
This suggests that suppliers need to find a way of opening a 'dark-store dialogue' with Tesco in order to attempt to maintain the status quo as the business shifts online... This means gathering evidence via store visits.
One way might be to sneak into the store under cover of darkness?
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