Retail, CPG and Logistics

How the dark store model is revolutionising e-commerce fulfilment

The e-commerce landscape is transforming at an unprecedented pace, reshaping the retail landscape as consumers are increasingly turning to online platforms for their shopping needs. This shift is particularly evident in the rise of online grocery shopping, as customers expect demand faster delivery times and more convenient shopping experiences. In the USA alone, over 80 million households have placed at least one online grocery order, resulting in $10.3 billion in monthly sales in February 2025.

As this trend accelerates, the dark store model has emerged as a key solution to meet the growing demand for efficient e-commerce fulfilment. The global dark stores market is witnessing impressive growth, from $22.84 billion in 2024 to $588.82 billion by 2034 at a CAGR of 38.40%. E-commerce order fulfilment is no longer just about product availability but about speed and reliability. As a result, the dark store model is poised to become an integral part of the future of e-commerce.

The dark store model

The dark store model represents a significant departure from traditional retail operations. Unlike physical stores where customers can browse aisles, dark stores function as fulfilment hubs for online orders only. These “invisible” stores often operate like warehouses – optimal for picking, packing, and shipping product directly to customers – that facilitates rapid e-commerce order fulfilment.

Cutting-edge retail technology is at the heart of dark store operations. A variety of systems, including order and warehouse management systems, streamline the fulfilment process, while real-time inventory tracking ensures optimal stock levels. Automation tools help speed up the picking and packing processes, and delivery tracking software solutions give customers real-time updates. As the industry continues to evolve, advancements in automation and robotics will play an even bigger role, further enhancing operational efficiency.

However, not all retailers may benefit from this model. Large-scale e-commerce businesses with high order volumes can easily integrate the dark store model. On the other hand, smaller retailers or specialised stores dealing with low-volume, customised products may struggle to justify the initial investment.

Benefits of dark stores in e-commerce fulfilment

From enhanced operational efficiency to improved customer satisfaction, businesses adopting the dark store model are setting themselves up for success in an increasingly competitive marketplace. The benefits of dark stores reshaping the landscape of e-commerce fulfilment include:

• Faster deliveries and expanded reach: The dark store model enables faster deliveries by strategically positioning stores in urban areas, cutting down delivery times while serving larger areas.
• Improved order accuracy: Automated picking systems and streamlined processes reduce human error and provide better real-time visibility into stock levels for enhanced order accuracy.
• Higher operational efficiency and cost savings: With optimised layouts and automated systems, dark stores improve operational efficiency, reducing time and costs associated with e-commerce order fulfilment.
• Enhanced scalability and flexibility: The dark store model allows businesses to quickly adapt to changes in demand and market conditions, making it easier to adjust to customer needs and growth.
• Enhanced customer experience: Seamless shopping experience, quick fulfilment, and faster, reliable delivery times lead to higher customer satisfaction, encouraging repeat business and customer loyalty.
• Enhanced competitive edge: Enhanced delivery times, improved order accuracy, and better customer service help businesses stand out and stay ahead of the competition.

While the dark store model offers many benefits, it also presents several challenges like high initial investment, demand fluctuations and inventory management challenges, urban space constraints, operational and logistics complexities, and workforce management. Businesses must navigate these hurdles to ensure effective e-commerce order fulfilment.

Improving e-commerce order fulfilment with a dark store model

Ensuring the smooth operation of dark stores and maximising their benefits for e-commerce fulfilment requires a strategic approach. The steps businesses can take to optimise their operations include:

• Leverage advanced technology and automation: Implement automation tools, order management systems, and real-time inventory tracking to speed up picking, packing and delivery processes while reducing errors and enhancing efficiency.
• Invest in AI and machine learning solutions: Leverage AI and machine learning algorithms to forecast demand and optimise stock levels to prevent stockouts or overstocking.
• Develop effective marketing strategies: Focus on targeted online campaigns and personalised offers to drive online sales.
• Develop workforce: Invest in continuous training and development initiatives to ensure employees stay updated on technology and operational best practices for managing automated systems and fulfilment operations efficiently.

For businesses looking to optimise their e-commerce order fulfilment, Infosys BPM offers a suite of end-to-end solutions to help businesses modernise their fulfilment operations. Combining strategy and roadmap development with execution expertise, Infosys BPM empowers retailers to enhance operational efficiency and reduce costs through automation, advanced analytics, and data-driven insights. Leveraging Transformation-as-a-Service (TaaS), businesses can redefine the future of e-commerce fulfilment with dark stores, focusing on hyper-automation, smarter analytics, and sustainable practices, driving further efficiency and innovation in the industry.

Conclusion

The dark store model is transforming e-commerce order fulfilment, allowing businesses to meet customer demands for faster, more reliable deliveries. While challenges like high initial investment and logistics complexity exist, the benefits – including faster deliveries, improved accuracy, cost efficiency, and customer satisfaction – make it a model worth exploring. As e-commerce continues to evolve, dark stores will play an increasingly central role in shaping the future of retail and e-commerce fulfilment, driving the industry towards more efficient, scalable, and customer-centric operations.