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I think WebVan showed in the 90's that you cannot add costs to the famously low-margin grocery business and also add a layer of profitable frosting for yourself
by mimixco 5y ago
I think WebVan showed in the 90's that you cannot add costs to the famously low-margin grocery business and also add a layer of profitable frosting for yourself to eat. 'Cause math, that's why.
Dark stores, however, could work if enough consumers like them. Just as Covid started, Best Buy turned our local store into a 50% dark model. It's the first time I'd seen such a thing.
Half of the store was converted into bank of drive-up spaces manned by workers with a mobile app. You order online and pickup there. So far, pretty normal. BUT, here's the kicker, not all of the products are available in the walk-in store! Some stuff (like the accessory I was buying) is only available on the Dark Side. Meaning if you walk in the store, you can't buy that item. It's not on the shelves and they're not setup to "go in the back" and get it.
Personally, I think this takes all the fun out of retail -- something that's definitely gotten less fun since Covid. One of the ways Best Buy has survived Amazon is that they focused on an improved in-store, in-person experience. They were trying to make shopping fun and, with cool displays and cool tech, they often did.
It's gotten less fun as they try to reduce costs. 'Cause math, again, and dark stores are just going to make that worse. But they will probably be profitable in urban centers where there's a big mobile ordering population.