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Shadowfax pilots dark stores to help D2C players reach customers faster
- Third-party logistics player Shadowfax is using a network of dark stores to help D2C brands and sellers of lifestyle products reach customers within 2 to 4 hours in an “economical” way.
- Sellers can operate their own dark stores or let Shadowfax manage their inventory and deliver within the given time.
- The dark-store rapid commerce format is expected to be 20-30% higher than the current hub-and-spoke model of parcel delivery.
- However, as the model scales, it has the potential to be profitable with higher throughput that lowers delivery and warehousing costs.
- Shadowfax is not the only logistics player dabbling in dark stores for rapid commerce. Its listed peer Delhivery is also considering dipping into them.
- The dark-store model can help cut costs as it scales up on volume and density beyond the pilot stage.
- The number of SKUs available in this format will be much lower, as micro facilities within cities can only store a limited range and are typically concentrated in metro areas.
- Experts in the ecosystem are sceptical of the immediate impact and success of the model.
- It’s still early days for the dark-store strategy, and it may not cause a big impact on Shadowfax’s total business in the near term.
- However, the logistics player is betting big on same-day and next-day delivery models, using the existing warehouses of brands and marketplaces.
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