Flink, Getir, Cajoo… “Shadow shops” and “fleet trade” are changing the shape of massive cities

129 billion euros. This is the amount that the so-called e-commerce sales in France. This is more than twice as much as in 2014 (EUR 57 billion).

Online food has that first digit almost 20 billion euros. This mainly applies to food delivery or shopping in vast retail stores. The fleet delivery segment or even “instant”sometimes called “fleet trading”, generated “only” 122 million euros turnover in 2021 in France.

The segment remains a niche market, mostly reserved for vast cities, but it grew by 86% in 2020-21. Up-to-date players have emerged in Paris, London, and Up-to-date York. Their names are Cajoo, Gorillas, Flink, Getir, JOKR, and Gopuff, and the explosion of the sector is now reflected in the urban landscape.

The business requires warehouse and fulfillment space located in urban areas to organize ultra-fast deliveries within a radius of about two kilometers. Set up like mini-markets, these are compact warehouses with a surface area of ​​less than 400 m² are accessible only to the staff responsible for receiving and delivering products. Hence their more common name “murky shop”, which some in France translate as “murky shop” or “shadow warehouse”.

AND latest report from the Paris Urban Workshops (Apur) estimates their number in January 2022 at 80 in the French capital. Amsterdam had some surroundings 28 in operation since mid-December 2021 and Up-to-date York 110 at the end of February 2022

This phenomenon is already clearly observable, but it is far from the rapid growth that is sometimes mentioned by the press or some politicians. The sector is still in full consolidation, as evidenced by the buyout process (Frichti by Gorillas) and hasty withdrawal from the market.

Not the first

One of the effects of the pandemic was that many companies were forced to expand their distribution methods or at least speed up their previous movement. Was it just the physical store or just the digital platform? With click-and-collect, many gamers are already playing in both caseswith several supports on each. We are talking about “omnichannel” models.

The store has now become a so-called multifunctional concentrator. It serves as a showroom, a relay point, a returns area, a micro-warehouse and a micro-order processing center.

Speedy-track retailing, then, did not invent murky stores, but rather is part of a retail model that was already changing before the Covid-19 crisis. It is also not the first store to test a store as a fulfillment center for local deliveries. For example, supermarket chain Monoprix has been operating a shadow warehouse in Paris since 2019. Franprix repurposed five of its stores, located in office areas that were empty during the lockdown, to fulfill online orders, and then reopened them.

The model does have its roots in Asia. In China in particular, instant grocery delivery has been an established consumer practice for more than five years at companies like Hema Fresh.

The method of development in question

The fact is that, more than other retailers using murky stores, fast-paced retail is hampered by their haphazard implementation in cities. In fact, investors are pursuing a so-called “blitzscaling” strategy. The idea is to start a race to expand in order to gain an advantage over the competition. The idea: to become the biggest and take everything.

Power thus becoming the second unicorn, including all sectors, of Turkish origin. The Brazilian IN achieved this status in just ten months of operation. Gorillas have, raised almost a billion dollars to finance its ultra-rapid expansion.

However, this rapid development creates questions regarding the need to regulate this sector. First of all, questions about public space. How can we reduce the inconvenience of suppliers moving and parking for local residents? How can we understand their impact on the overuse of bicycle and road infrastructure?

The question is also commercial: do murky shops threaten compact retail shops or even vast city shops? Does the proliferation of these inaccessible, hidden spaces threaten a certain form of urban life and street activity? And how should murky shops be considered from a legal point of view, especially in relation to local planning documents: commercial space or logistics space? Especially if we know that the logic of competition a priori will lead to Bankruptcies smaller and therefore empty spaces.

Urban counterattacks

Some point out that murky shops are often created opportunistically in former retail premises located in places that have become undesirable. For example, in London, they are installed under railway arches, in delicate industrial parks and in the basements of shopping centres. These spaces are sometimes allocated Second chance.

However, the local authorities express certain concerns and multiply initiatives aimed at regulating or even opposing their development. Some managers even show hostility that can sometimes be considered excessive, mobilizing moralistic arguments and neglecting the fact that this offer is a response to consumer demand.

The [ville de Paris] decided, for example, to initiate a procedure in March 2022 to close 45 of the 80 murky shops identified by Apur. The argument used: failure to comply with the rules of the Local Spatial Development Plan. It also introduced a procedure enabling citizens report unauthorized storage in their neighborhood. In the Netherlands, in Amsterdam and Rotterdam, it is the so-called moratorium year to open recent places of this type, which was decided in January 2022.

Skip or cooperate

However, the means to regulate fleet trading are still quite restricted. Since the beginning of 2022, two trends have emerged among entrepreneurs. On the one hand, we see a desire to adapt and even circumvent recent local regulations. Getir, for example, will experiment with click and collect allow classify their warehouses as businesses. Others are innovating and offering fresh produce to go, like GoPuff in Up-to-date York, which launched GoPuff Market, a combination logistics space, boutique and coffee shop.

On the other hand, there is a desire to cooperate with municipalities. MA ParisCity Hall also offered to assist fast-paced traders like Cajoo find suitable premises, such as underground car parks.

The necessary regulation of fast-paced trade, particularly in terms of compliance with urban planning rules and reducing nuisance, must not, however, make us forget that this sector is currently merely an additional manifestation of the development of urban trade. Online sales have permeated urban life and changed consumption habits. Deliveries from brick-and-mortar stores, click-and-collect services, pedestrian crossings, automatic lockers are other signs of these changes in the city. In addition, we should perhaps put into perspective the impact of murky stores on the local economic fabric: Paris currently has fewer than a hundred warehouses for more than 60,000 internal businesses.

In these debates, it seems necessary to find ways to collect reliable data. There is a glaring gap here, which the Department of Urban Logistics at Gustave Eiffel University is trying to fill. For several weeks now, it has been counting and monitoring in the French capital, especially the movements of suppliers and vehicles used for deliveries. The aim is to put the organization of sustainable urban logistics in all its dimensions on the local agenda and to rethink the rapidly developing urban trade.