Digital Foodie and HOK-Elanto open dark store in Finland to fuel the growth of online groceries

Digital Foodie, creator of the award winning online grocery platform, and HOK-Elanto, the co-operative grocery chain, part of S group, are opening with Alepa chain the first online-only dark store for groceries in Vantaa, Finland. The dark store uses Foodie’s fulfillment and picking solution and caters exclusively the growing online grocery business.

The online grocery business has achieved an impressive average growth of 100% during the last two years in Finland. Opening an online-only store is a needed response by HOK-Elanto to meet the growing demand from customers. Most of the picking operations within the capital region will gradually be transferred from HOK-Elanto’s current store based fulfillment to the new dark store. The dark store will also offer a collection point for click and collect customers.

“We have reached a limit where creating a dark store substantially improves the picking efficiency, logistics and quality of operations. The dark store is located close to an existing store giving us great synergy with the existing structures, logistics, flow of goods and staff without significant investments. Foodie’s solution supports seamless transformation from store based fulfillment to more optimized dark store operations,” says Jukka Ranua, eCommerce Development Manager for HOK-Elanto.

Efficiency gains

In addition to the assortment and pricing, efficient fulfillment is by far the biggest factor in creating profitable online grocery operations. Typically more than 65% of the fulfillment costs are labor related. The store environment is perfect to get started but a busy store limits when and how efficiently orders can be picked. In a dark store the layout of products can be arranged optimally for picking and pickers are able to move more freely without distracting customers in-store. This increases both the efficiency and quality of the service.

“We have been working for several years with HOK-Elanto and S group developing our solution and adjusting the related processes. With Foodie’s fulfillment solution and a dedicated dark store it is possible to improve efficiency significantly over store based operations without major financial investments in automation,” says Kalle Koutajoki, CEO, Digital Foodie.

Foodie’s fulfillment solution offers the tools needed to run dark store operations. These include tablet-based software for picking optimization and automatic route planning for home deliveries. Foodie enables multiple pickers to process orders in parallel and pick multiple orders at the same time. Wireless barcode readers help avoid picking errors and enable quality operations. All information is processed in realtime, allowing customers to modify their orders until the order has been selected for picking and thereby increasing the transparency in operations.

“Previously, opening a dark store was considered a very expensive investment. It is an investment but with our modern and flexible solution we believe this cost barrier has been lowered. Our goal is to support retailers from starting the operations with store based picking, through dark stores to highly optimized and automated picking operations,” concludes Kalle Koutajoki.

Digital Foodie and HOK-Elanto open dark store in Finland to fuel the growth of online groceries

Efficiency gains

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