- What direct-to-store delivery is
- Who should use DSD
- DSD best practices
Distribution is not easy. There are many mobile components, but speed is crucial for consumables like food, medicinal products, and flowers. So rather than using distribution centers, some suppliers make direct deliveries to stores. We call this process direct-to-store delivery (DSD).
This shipment method is more popular through the festive seasons like Christmas and Valentine’s Day. Speed being essential here, all the components have to be in sync and work with utmost flawlessness.
What is Direct-to-Store Delivery (DSD)?
Direct-to-store delivery (DSD) is the process of delivering products to customers without going through distribution centers. Generally, it is the preferred method for the food and beverage sector, as perishable items must move quickly.
Direct store delivery is especially beneficial to B2B wholesalers and distributors keen on moving their commodities up the supply chain.
When should I use DSD?
Direct-to-store delivery is suitable for businesses that correspond to one or more of the following:
Fragile or oversized products
If the product is lightweight, big, and easily breakable, DSD helps avoid damage. Items such as mirrors or glass bottles benefit from DSD, as it reduces freight charges for the supplier and lowers the chances of damage.
Perishable items include foods like bread, dairy, and eggs. They are large-quantity products with a short shelf life. These products spend less time in the supply chain when suppliers ship directly to retailers, and stores restock them frequently since they are high-consumption goods.
More diverse, low-value merchandise
Suppliers of large-scale production, low-value commodities typically have customers who prefer that they handle the delivery. Since they are low-value products, managing the wide variety may be expensive for the retailer.
Suppliers who sell irregularly-shaped products that are difficult to fit into a cargo package should use direct-to-store delivery to ship their items safely. Wall décor is an example of such an item.
Products that require a demonstration
The direct-to-store delivery system is more suitable if the item needs a demonstration to explain its operation. Suppliers can train delivery agents to provide a demo on the process of the product upon delivery. Electronics are a good example of this type of product.
What are the benefits of Direct-to-Store delivery?
In the supply chain, DSD is a win-win situation for all: suppliers, retailers, and consumers.
The supplier incurs all expenses related to inventory, shipping, marketing, and stocking in the DSD model. It enables retailers to bring down investment and running costs, producing higher profits.
Suppliers receive more clarity on customer behavior, net sales, trends, and more. This understanding results in improved customization based on the requirements of individual stores and their customers. They can also directly influence sales instead of depending on the retailer’s marketing efforts.
The conventional way of ordering and replenishment may be sluggish. Store orders may sit in distribution centers, waiting for the next scheduled delivery, which can be up to several days. This wait time causes lost sales and dissatisfied customers for the retailer and the manufacturer.
In the DSD system, the supplier’s representatives visit each store multiple times a week. These visits help identify slow-moving products, fast sellers, out-of-stock items, and disruptive items. This real-time insight enables suppliers to get their products to the stores faster – often just in a day or two.
Also, with a representative visiting the store frequently, suppliers can forecast trends, like regional events or festivals during which certain products may be in high demand.
Usually, retailers and suppliers invest heavily in collaborative marketing campaigns, especially with new products. This spending goes to waste when there are slow deliveries or unavailable products. DSD makes it easy to ensure that the item will be in stock throughout the promotion.
Rather than wasting time on cycling, ordering, ensuring supply, and merchandising, retailers can pay more attention to customer service and other measures that boost sales.
Direct-to-Store delivery best practices
There are two best practices to put into place when considering DSD:
- Hiring a logistics provider
- Using a transportation management system
Hire a proficient logistics provider
Having the right sourcing and logistics support makes DSD easier and more efficient. Suppliers should find a provider who:
- Has countrywide coverage
- Works with other businesses in the supplier’s industry
- Is suitable for all of the supplier’s products
- Can ship products as and when required
The logistics provider must be technologically capable of managing all order requirements from a single source – orders, tracking, supply, and billing.
Use a transportation management system
A transport management system (TMS) streamlines shipping, creates transparency, uses business intelligence, and has global supply chain expertise for cost reduction. A TMS also enhances efficiency and helps achieve a competitive edge in the supply chain.
With a TMS, suppliers gain insights that help them base decisions on direct-to-store deliveries. Additionally, TMS also helps suppliers ensure proper invoicing and payments, enhance product visibility and shipping routes, and find kinks in the supply chain.
Gain insights into your instocks
With SupplyPike’s Retail Intelligence app, you can view your instock metrics easily and frequently to ensure you stay on top of your inventory. View weekly sales and store on hand with the click of a button.
Get started today and leverage machine learning to avoid out-of-stocks!