What is Direct Store Delivery (DSD) distribution? Pt. 1 of 2
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 quite a few benefits to reimagining it.
The direct store delivery (DSD) model is one way that works particularly well for consumer packaged goods (CPG) selling to grocery stores, especially fast-moving products like bread, dairy, or beverages.
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.
Here's how DSD can help reduce costs and streamline operations for brands and retailers alike. If you're looking for a DSD distributor to expand your reach and grow your brand? Reach out to one of our experts today to find out why Buffalo Market is the fastest, most efficient, and most brand-friendly DSD distributor in the industry.
What is Direct Store Delivery in grocery?
Direct store delivery is a somewhat self-explanatory term. DSD bypasses the retailer’s distribution center and delivers a 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, reducing the chance of out-of-stocks.
Out-of-stocks aren't just a lost sale, they result in disappointed customers that may give their business to competitors and possibly never return.
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: reduce the amount of time your goods spend in transit and storage
Even the most robust inventory forecasting and slickest of traditional supply chains can’t always deal with demand surges. Plus, if retail learned anything from recent years, it’s that consumer patterns can be unpredictable. No matter how prepared you think you are.
Especially lately, snags have been known to happen along the supply chain. The more times a shipment of goods changes hands, the higher the likelihood of delays and errors that result in stock-outs, waste, and unhappy customers.
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.
Benefits of DSD
While centralized distribution certainly has its place, there are plenty of reasons why DSD might be a better choice for some brands and retailers.
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 the store is a huge time saver. Now you never have to keep retailers or your customers waiting.
Fresher for longer
Since goods spend less time in transit and storage, their shelf-life will be longer than if they'd been transported and kept in a warehouse for days or weeks. This means fresher products and reduced food waste.
Fewer 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 to foods find their way quickly and efficiently to their destination.
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. Empty shelves turn away high-intent customers and tarnish brand identity. DSD means you can be more responsive and flexible with retailers. Getting your product out when called upon.
DSD gives you greater control of your distribution. 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 ordering, forecasting, unloading, inventory, stocking, displays, merchandising, and POS. It unsurprisingly takes a lot of labor to get this all fulfilled. A DSD distributor like Buffalo Market can handle everything but the point of sale, reducing labor costs and bolstering retailers' 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 rely on the brand shipping directly to the retailer’s distribution center. The retailer then assumes all responsibility for 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 snacks. These high-volume products tend to consistently have a high turnover rate in stores.
This can require more specialized handling and 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 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 forecasting, inventory management, pricing, in-store merchandising, and more.
This 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.
Work with a DSD distributor on the cutting edge
Buffalo Market's tech-forward direct store delivery distribution model uses AI to collect and analyze sales data to power predictive ordering—ensuring shelves are always stocked with products consumers want most, when and where they expect to find them.
To learn more about how Buffalo Market can help expand your reach and grow your business, contact one of our CPG and distribution experts today.