There are a number of ways that you can get your food or beverage product into your ideal stores. The supply chain is no longer a strict one-way system. In fact, there are benefits to reimagining it.
Direct store delivery (DSD) is one way that works particularly well for consumer packaged goods (CPG) selling to grocery stores.
Retailers no longer need to worry about the logistics of getting manufacturers’ products into stores. The brand’s own distributor can take care of it all - right up to stocking the shelves.
Does it sound too good to be true? In this article, we’ll go into more detail about what DSD is and how it can benefit you, your chosen retailers and even your customers.
What is DSD in grocery?
Direct store delivery does pretty much what it says on the tin. It bypasses the retailer’s distribution center, and delivers your brand’s goods directly to the store.
It’s super handy for retailers to know that they can get your products into their stores quickly and on-demand. There are plenty of scenarios where DSD would save the day. For instance, a sudden heatwave hits. You can bet that the ice cream, BBQ food, sodas and sunscreen are going to sell out.
Although this is a good thing for retailers, if they’ve not got enough stock, they’ll be missing out on a high volume of sales. They’d rather not disappoint a customer — or send them over to a competitor! DSD can help prevent this from happening.
Other scenarios where DSD can be a huge help:
- Fresh produce: has a shorter shelf life and can get to stores quicker.
- Quick restocks: refill the ready-to-go sandwiches during the lunch rush.
- National Holidays: no more running out of cranberry sauce on Thanksgiving!
- Keep it local: why send your product all the way to the warehouse, just to come back to the store, if you’re only up the road?
Even the most robust inventory forecasting and slickest of traditional supply chains can’t always deal with such surges. Plus, if retail learned anything from the year of 2020, it’s that consumer patterns can be unpredictable. No matter how prepared you think you are.
On the flip side, what if an issue arises within the supply chain? Let’s put ourselves in the shoes of a grocery store who isn’t using DSD. They’re waiting for a delivery of fresh salad produce to arrive from their centralized distribution center.
Unfortunately, upon arrival there’s an issue with the tomatoes — they’re not good enough to sell. A truck is sent to pick up another batch, but that means waiting for them to get from the supplier, back to the distribution center, then finally, to the store.
The store can’t wait that long. Customers planning to wow with their tomato and mozzarella platter tonight will be left disappointed.
That’s why DSD is a game changer. Getting groceries sent directly from brand owners to the store ensures that the customer always has exactly what they want, whenever they want it.
Let’s talk benefits
There are plenty of benefits to using DSD systems over warehouses:
Time is money. Whatever time we can shave off the supply chain is beneficial to the bottom line for retailers, which in turn benefits CPG brands. Bypassing the distribution centers and getting products straight to store is a huge time saver. Now you never have to keep retailers or your customers waiting.
Fresher for longer
You’ve saved time on your shipping and it now has a longer shelf life. Your customers will be delighted with their super fresh groceries. Hopefully, it will help to reduce food waste, too.
Reduced food miles
Conscious consumers have their eye out for food miles. If you’re located near a store, but you have to send your products all the way out to the retailer’s distribution center, you’re accumulating unnecessary mileage.
Helping you to keep your mileage down is a priority for Buffalo Market. We work hard to ensure that purpose-driven foods find their way successfully into the right stores.
‘Handle me with care, I’m fragile’. It’s not uncommon for products to become damaged in transit. Broken eggs, bruised apples, crushed chips — it’s a waste. Taking charge of the specialized handling of your goods, whether you do it yourself or you outsource to a trusted distributor, can minimize damage.
You always want your product to be there when your customer needs it. At the risk of sounding dramatic, empty shelves can be devastating. DSD means you can be more responsive and flexible with retailers. Getting your product out when called upon.
When your product is loaded onto a retailer’s truck, it can often feel like your babies are leaving the nest. You relinquish control and trust that they’ll be okay. DSD gives you greater control. You can ensure that your food and beverage products are going where they should be, at the right time, and quickly.
Good for retailers
Business is hard, right? Stores don’t have it easy either. Normally, they’d be tasked with the ordering, forecasting, unloading, inventory, stocking, displays, POS and merchandising. It unsurprisingly takes a lot of labor to get this all fulfilled. Making them a DSD offer removes items from their to-do list. Less workload means less labor, which means increased bottom line.
DSD vs warehousing and central distribution
Still unsure what’s best for your brand? Let’s compare the DSD and central distribution models.
Warehousing and central distribution relies on the brand shipping directly to the retailer’s distribution center. The retailer then assumes all responsibility in getting products to its stores. It is generally considered a cheaper method of distribution, mainly due to not having to manage a DSD fleet.
For bigger brands, economies of scale can come into play here, making warehousing the more financially viable option.
DSD products are typically fast-moving consumer products like food, beverage, and personal care. These high-volume products tend to consistently have a high turnover rate in stores — chances are, yours does as well.
This can require more specialized handling, more niche knowledge from suppliers and can be affected by various regulations. DSD can be more beneficial for certain sectors due to less handling and a quicker service.
Can we get the best of both?
Working with the right logistics partner who specializes in your product area is the ultimate way to use a DSD model without having to take on the excess work that it entails. This way, neither your brand nor the retailer need to worry about the forecasting, inventory management, pricing, in-store merchandising and more.
This way works especially well for CPG brands who may not have the facilities to transport their own goods into the stores they work with. They still get all the benefits of DSD without any of the hassle. It really is the best of both worlds.
Buffalo Market is the go-to distributor for CPG brands making a difference in the world. We work with brands who value good for you and good for the earth products. Let us help you with direct store delivery, get in touch today.