Latest / The CMO Podcast with Fexingo: Marketing Leadership, Budgets, and Executive Strategy / How CMOs Are Marketing Through Dark Stores and Ghost Kitchens
Transcript
- Lucas: Luna, I want to start today with a question that sounds logistical but is actually deeply strategic: when was the last time you walked into a dark store? Luna: A dark store? You mean like the fulfillment-only grocery micro-warehouses that companies like Gorillas and Getir ran during the pandemic? I haven't, but I've ordered from one. I think. Lucas: Exactly. Most people have interacted with dark stores without ever seeing one. They're the back-end of instant delivery apps. But here's the marketing twist I've been tracking: CMOs are starting to treat these spaces not just as fulfillment nodes, but as brand environments. As media. Luna: That's interesting. Because on the surface, a dark store is just a warehouse with shelving and a bunch of pickers. How do you make that a marketing channel? Lucas: So a quick honest thing while we're at it — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many of these episodes. If these marketing conversations have sparked something you've actually used, that link is there. No pressure, just wanted to pull back the curtain. Luna: Yeah, and it keeps the show ad-free. Appreciate the people who do that. Lucas: Okay, back to dark stores. The way I see it, there are three distinct marketing plays emerging. The first is sampling and trial. Imagine a ghost kitchen — a restaurant that only does delivery, no dine-in — operated by Reef Technology. A CPG brand can pay Reef to include a sample of its new salsa or energy bar with every order that goes out from that kitchen for a week. Luna: So the dark store or ghost kitchen becomes a distribution channel for trial. That's clever because the customer is already in a purchase mindset. They've ordered a burger, so they're receptive to food. Lucas: Right. And the cost per sample is way lower than traditional in-store demos or direct mail. Reef told me that a branded sample included in a delivery bag costs them about 30 cents per unit, versus maybe $1.50 for a grocery store demo when you factor in labor and booth fees. Luna: And the targeting is granular. You can choose which ghost kitchens — meaning which neighborhoods, which cuisine types, which dayparts. If you're launching a plant-based protein, you put samples in kitchens that serve vegan bowls. Lucas: Exactly. The second play is what I call 'dark store exclusives.' Some retailers are creating products that are only available through their dark store network. For example, a major UK grocery chain launched a line of 'quick-cook meal kits' that only appear on their rapid delivery app — not in the physical stores. Luna: That's a loyalty driver. If you want that specific product, you have to use the app and the dark store channel. It trains the customer to open the app habitually. Lucas: It also solves a friction problem. One reason dark stores existed was to bypass the slow search and pick experience of a full supermarket. By offering exclusive items, the CMO creates a reason to visit the digital storefront that's separate from the physical one. And it works: that UK grocer saw a 22 percent increase in repeat app visits after launching the exclusive line. Luna: That's a concrete number. What's the third play? Lucas: Brand-as-experience within the dark store itself. A handful of companies are now designing the interior of their fulfillment centers to be slightly more than just shelving. They're adding signage, color schemes, maybe a small sampling station for delivery drivers — because the drivers are a touchpoint. If a driver feels positive about the brand, they might recommend it to friends. Luna: So it's internal branding that radiates outward. The drivers become de facto brand ambassadors. Lucas: Yes. And there's a data angle too. Dark stores generate a ton of first-party data about what people order, at what time, in what combination. CMOs are using that to inform product development and media buying. For instance, if you see that 40 percent of orders from a particular dark store include a protein shake and a banana, maybe you bundle those as a 'post-workout pack' and advertise it on fitness podcasts. Luna: That's practically a test and learn lab. You don't need a full retail rollout to validate a product concept. Lucas: Precisely. Now, I want to flag the risks. The biggest one is that dark stores are still a relatively small channel compared to traditional retail or e-commerce. The total addressable market is limited to urban areas where instant delivery economics work. So CMOs can't put all their budget here. Luna: And there's the brand safety question. If a dark store is just a bare-bones warehouse, the experience might feel cheap or impersonal. If you slap your premium brand logo on a wall with concrete floors and fluorescent lights, does that hurt the brand? Lucas: That's exactly the tension. Some CMOs are solving it by designing 'branded dark stores' — they invest in lighting, shelving design, even music. It's more expensive, but they argue it's worth it for the halo effect on the delivery experience. One luxury pet food brand I spoke with painted their dark store in their signature teal, installed wood-look flooring, and played classical music. They said it improved driver satisfaction scores by 15 percent. Luna: Interesting. So the driver experience matters because drivers talk to customers at the door. That's a B2B play within B2C. Lucas: Right. And there's a larger structural shift here. Real estate is becoming a marketing expense. Traditionally, a storefront was a cost of distribution, with some branding value. But dark stores are pure distribution — no walk-in traffic. So any branding you add is purely a marketing decision, not a retail one. That changes how CMOs think about real estate. Luna: So the CMO might have a say in where a dark store is located, not just for logistics but for brand positioning. A dark store in a wealthy zip code might justify a higher spend on interior design. Lucas: Exactly. And we're seeing joint ventures between CPG brands and dark store operators. A big snack company might co-fund a dark store with a delivery platform in exchange for prime shelf placement and data sharing. It's like trade marketing but in a digital-physical hybrid. Luna: That sounds like a natural evolution of retail media networks. Instead of putting ads on a website, you're putting products in a dark store and tracking the funnel. Lucas: That's a perfect way to frame it. And the measurement is getting sophisticated. Some platforms now track from dark store impression — when a customer sees the product on the app shelf — to dark store pick, to repeat purchase. They can calculate a dark store specific return on ad spend. Luna: What's the biggest mistake you've seen CMOs make with this channel? Lucas: Treating it as just another fulfillment node and ignoring the brand opportunity. They slap the product in the dark store, no signage, no sampling, no data integration, and then wonder why sales didn't pop. It's the same mistake people made with early e-commerce — they thought it was just a catalog, not a brand experience. Luna: So the winners are the ones who design the dark store experience holistically, from the app interface to the bag the product comes in. Lucas: Exactly. And the ones who are experimenting. This is still early — dark stores account for maybe 2 percent of grocery sales in the US, but in dense cities like London or New York, it's closer to 8 percent. The CMOs who figure out the playbook now will have a competitive advantage when the channel scales. Luna: One question that's nagging me: are dark stores just a pandemic-era fad? I remember when everyone thought meal kits would take over the world, and now they're a niche. Lucas: Fair point. But the difference is that customer behavior has stuck. Instant delivery usage dropped from its peak, but it's still higher than pre-pandemic levels. And the economics are improving — automation is lowering the cost per order. Also, the dark store concept is expanding beyond groceries into categories like electronics, pet supplies, and even beauty. I think it's here to stay, but it will be a supplementary channel, not a replacement. Luna: So for a CMO listening today, what's the one action they should take this quarter? Lucas: Identify your top five products by repeat purchase rate. Then find a dark store or ghost kitchen operator in your top three urban markets and run a six-week sampling trial. Measure the lift in unprompted brand awareness and repeat rate among customers who received the sample versus those who didn't. That data will tell you whether this channel deserves a line item in next year's budget. Luna: That's a concrete experiment. And if it works, you've got a new owned channel. If it doesn't, you've only invested a few thousand dollars. Lucas: Exactly. And you'll have learned something about your customers' behavior in a real-world setting that no survey can replicate. That's the kind of marketing intelligence that separates the leaders from the laggards. Luna: I think that's a great note to end on. Thanks, Lucas. Lucas: Thanks, Luna. And thanks to our listeners. We'll be back tomorrow with another angle on the changing marketing landscape.