Direct Store Delivery (DSD) has advantages over centralized distribution for many wholesalers. While centralized distribution is effective for products that are simple to transport, don’t need special handling, and have a long shelf life, direct store delivery is appropriate for all products and delivers products swiftly and directly to customers.
Direct store delivery does, however, come with certain difficulties. To ensure that your field crew doesn’t lose out on last-minute retail possibilities, you must first keep them productive, organized, and informed on the newest sales and product information.
This article will define direct store delivery, discuss its advantages, and explain how Orders in Seconds can support your company’s implementation of direct store delivery through its B2B channels.
What is Direct Store Delivery and what does DSD mean?
Direct store delivery (DSD) means delivering goods directly to a store from a supplier or distributor rather than through the retailer’s distribution center. DSD also tends to give distributors rather than shops control over product unloading and stocking. DSD distribution is a crucial channel in the grocery sector since it not only expedites the delivery of produce with limited shelf life, but also gives retailers control over display space.
Retailers who sell perishable goods and have constrained delivery windows for their products benefit from direct store deliveries. This approach is primarily appropriate for pharmacies, convenience stores, gas stations, soft drink and beverage producers, and businesses that produce organic foods.
What does DSD mean in Retail?
DSD retail is a method of product distribution where a supplier delivers goods directly to a retail store instead of going through a distribution center. With DSD, the supplier is responsible for managing inventory levels, restocking shelves, and ensuring that the products are displayed properly in the store. This method allows for a more efficient supply chain since it eliminates the need for multiple shipments and reduces the time it takes for products to get from the supplier to the store. DSD is commonly used for perishable goods such as dairy, bakery, and snack items, as well as non-perishable items like beverages and magazines. Retailers benefit from DSD as it helps to reduce their inventory holding costs, improves product freshness, and allows them to offer a wider variety of products to their customers.
Direct Store Delivery vs. Distribution Centers
Retailers can buy products directly from suppliers thanks to the DSD approach. Almost all tasks in the supply chain are completed by the supplier, including:
- Checking the stock
- Ordering supplies
- Unpacking pallets
- Assigning shelf space
- Elimination of stale or expired stock
- Setting up advertising displays
- Pricing display
The DSD model also enables manufacturers to ship their goods directly to the retailer or location using a DSD distributor. In comparison to the conventional Centralized Distribution paradigm, this one is very different.
The supplier sends inventory to a central location in the centralized system. In a warehouse or distribution center, products are kept. The products are transported to the retailer from the warehouse after the merchant places an order for them.
The entire burden of responsibility in the centralized distribution model falls on retailers. In the case of a DSD model, the manufacturer is in charge.
Direct Store Delivery Companies: What You Need to Know
Direct Store Delivery (DSD) companies are businesses that specialize in the delivery of goods directly to retail stores. DSD companies are typically involved in the distribution of perishable goods, such as food and beverages. They operate in a highly specialized niche of the logistics industry, with a focus on providing fast and efficient delivery services to retailers. Some of the biggest names in the DSD industry include Coca-Cola, PepsiCo, and Frito-Lay.
What are the Main Benefits of Direct Store Delivery?
Direct store deliveries are becoming more and more common. Many businesses in the dairy, pastry, and beverage sectors already run some type of direct store delivery operation. Let’s examine the main advantages of DSD in the grocery store industry.
Efficient handling of perishable and fragile items
The DSD model works well for perishable goods that must be handled carefully and quickly, such as fruits, vegetables, poultry, flowers, and bakery products. Wafers, potato chips, and biscuits are examples of fragile commodities that require particular handling during packaging and delivery.
DSD shortens the time things spend in the supply chain, extending the shelf life of perishable and fragile goods. In the food, beverage, and grocery industries, where there is less chance of damage to these products, DSD channels are the most widely used.
Faster deliveries to retail stores
DSD gets rid of distribution hubs and warehouses. It arrives at stores quicker and cuts down on the whole time on the market dramatically. Less transit time is required for consumer goods to guarantee a high level of product availability.
The ability to consistently maintain an adequate quantity of product is also beneficial to the store owners.
Reduced labor and logistics expenses
Consumer goods are neither transported to nor kept in a warehouse or distribution facility when they are delivered directly to the store. Because you don’t have to pay for transportation costs (such as gas or driver compensation) or for renting, maintaining, or staffing a warehouse, this lowers your logistics costs.
As a result, it lowers the costs associated with logistics and overall transportation expenditures, including store labor costs. The DSD approach saves 25% of labor expenditures on average.
Increased customer satisfaction
Putting the needs of the customer first is an effective business strategy. Customers are less likely to face stockouts at retail establishments with quicker and appropriate stocking.
Customers are more satisfied as a result of the quicker access to the requested products. This leads to an improved customer experience and a customer base that is more loyal.
Enhanced customer relationships
Through this delivery technique, a brand can establish better relationships with retailers and end users.
For instance, when brands sell products to retailers, it enables them to gain market insights about things like what products customers are buying more of, current market and trend information, as well as which products are underperforming. By providing this information, the brand or company can communicate more easily.
Additionally, they learn how to market and strategize efficiently while placing a high premium on providing improved customer service. Consequently, a fruitful brand-retailer association is created.
What are the Challenges of Direct Store Delivery?
Here are some of the major challenges of the DSD model.
Higher cost of transportation
When a company uses DSD, the supplier is responsible for managing the goods’ end-to-end shipping and transportation.
The cost of transportation cannot be ignored, despite the fact that it is still faster and more transparent. Although the supply chain as a whole is known for eliminating warehouses and lowering labor expenses, the operating costs are still significant.
Unexpected changes in the course of shipping
It can be challenging for businesses using this approach for the first time to accept real-time order requests or adjustments to delivery timetables. It is necessary to improve operational efficiency because the market has grown more complicated and competitive.
Finding prospective sources of business revenue is tough due to the rigid supply chain. Therefore, tools that promote openness, ease, responsiveness, and adaptability are thus necessary.
It is difficult to establish a connection between the brands (suppliers), employees of the distribution center, and the retailer. Similar to the lack of cooperation about delivery status, product inventory, and price fluctuations, improper communication can also contribute to these issues. This will have a significant effect on the company’s profit margin.
Fleet management and monitoring challenges
For retail distribution, managing and keeping an eye on fleets traveling in several directions becomes challenging. They are accountable for making sure the deliveries arrive at the retail locations within the specified time frames and without any delays. They must also guarantee that delivery personnel carry out their tasks effectively.
Additionally, it might occasionally be inaccurate to manually coordinate with the workers on the ground and record delivery information. Therefore, a supply chain visibility solution is absolutely necessary to help the suppliers with this problem.
Work on the issues and make an effort to fix them if you want DSD to succeed.
Direct Store Delivery versus Centralized Distribution: Which is Better?
Direct Store Delivery (DSD) and centralized distribution are two of the most common methods used to deliver products to retail stores. While both methods have their advantages and disadvantages, DSD is generally considered to be the more efficient and cost-effective option. With DSD, products are delivered directly to the store, eliminating the need for a middleman. This can help reduce delivery times and improve product freshness.
DSD Distribution Companies: Finding the Right Partner for Your Business
If you’re looking to partner with a Direct Store Delivery (DSD) company, there are several factors to consider. One of the most important considerations is the company’s experience in your industry. DSD companies that specialize in the grocery industry, for example, may be better equipped to handle the unique challenges of delivering perishable goods. Additionally, you’ll want to look for a company with a strong track record of reliability and customer service. Finally, it’s important to consider the company’s pricing and delivery options to ensure that they align with your business needs.
Direct Store Delivery Best Practices
You must keep in mind that a DSD model is not a one-size-fits-all strategy if you wish to make the switch. You will need to make a number of adjustments and execute a number of crucial actions. They consist of the following:
Best Practice 1: Configure omnichannel visibility
It’s critical to coordinate order administration, fulfillment & shipping, and inventory management in one location in order to raise and maintain direct retail delivery standards. Additionally, it should be necessary to gather information about every retail store from every sales channel.
The omnichannel visibility will make it easier to keep track of inventories in all of the retail locations. Finding data on inventory turnover and average sales for each retail location as well as all of them will be made easier with this. All of this data will gradually assist in identifying the areas where sales growth can be improved.
Best Practice 2: Plan efficient routes
To satisfy customer demands you should create routes that are properly optimized. Consequently, a delivery route planner should be used.
You may create a route with numerous stops using the greatest route planners, such as Order in Seconds. The route sales software lets you know:
- How to transport more goods using fewer vehicles
- How many routes you should designate for each vehicle and driver, given the carrying and loading capacities of your vehicles
- The order that will cost-effectively visit and service all of your retailers
- How to minimize waiting times by taking your shops’ availability time slots into account
- How to adhere to your state’s DSD regulations
The DSD software from Orders in Seconds supports the import of thousands of store addresses. Additionally, it will automatically produce the best possible sequence of routes for each of the available drivers.
Best Practice 3: Track SKUs effectively
The need for the manufacturer to keep track of thousands of different Stock Keeping Units (SKUs) is one of the difficulties with the Direct Store Delivery model. However, this figure is always fluctuating.
The route planner tool from Orders in Seconds lets you add and match up numerous barcodes at every route address. You may follow all delivery SKUs with the help of our mobile barcode reconciliation capability without the need for additional mobile sales software or pricey barcode scanners.
Best Practice 4: Enhance your customer service
Customer satisfaction and feedback are crucial components of every organization. By including a customer feedback system into the process, customer service can be improved. This will guarantee that direct store delivery is successfully completed and that customers receive their items.
Best Practice 5: Make sure your team has information to support them.
Every procedure for the warehouse or retailer’s distribution center needs to be made more efficient. Even in a supply chain management system, information loss is a possibility. Therefore, direct store delivery software can be used to prevent any misunderstandings or errors between DSD suppliers and retail establishments. This will maintain all of the parties’ current and updated data.
Best Practice 6: Focus on inventory control
The brands are solely in charge of distributing the products to retail outlets and consumer markets under the DSD method. Therefore, it is crucial to manage the delivery fleet properly through planning and management. This will contribute to the delivery process being more efficient and streamlined.
Managing a delivery fleet may include information like how many vehicles are owned vs rented, how to deploy them for quicker delivery, and how to monitor these vehicles once they are on the road.
OIS can assist you in running efficient delivery operations by assisting with inventory management and delivery route planning. Find out how we can become your go-to tool for making multi-stop deliveries.
How OIS Can Help You Boost Your Direct Store Delivery Performance
Orders in Seconds (OIS) is a simplified and easy-to-use direct store delivery software and and a solution for delivery route planning and optimization. Among its key features are automated route planning, route scheduling, delivery alerts, and proof of delivery.
You can utilize OIS as a direct store delivery driver to make on-time deliveries by taking the quicker routes. You may generate efficient routes for your hundreds or thousands of delivery routes with the aid of the route planner. OIS also enables you to save total transportation expenses and boost corporate revenues.
Flowers Bakery Routes for Sale: A Unique Opportunity in the Grocery Industry
If you’re looking to break into the grocery industry, purchasing a Flowers Bakery route may be an attractive option. Flowers Bakery is a well-established brand with a loyal customer base, making it easier to sell their products in retail stores. Additionally, purchasing a route can provide you with a turnkey business opportunity, with an established customer base and regular delivery schedule. However, it’s important to thoroughly research the opportunity and understand the financial implications before making a purchase.
For more details about our DSD sales app and route sales software, please contact Orders in Seconds.