Do you struggle to keep high-demand items in stock or find that your fresh produce is suffering from lengthy journeys between distribution centers? Direct store delivery (DSD) might just be the solution to keep consumers coming back to your boutique grocery store.
Contributing to 25% of goods sold and over half the profits of a typical grocer, DSD vendors supply many of the most in-demand, fastest-turning goods grocers sell, such as dairy, bread, soda, ice cream, salty snacks, beer, and wine. In fact, 9 in 10 consumer shopping baskets contain items sourced from DSD.
And with an increasingly unpredictable market and growing focus on sustainable choices and shopping locally, now more than ever, DSD is a foundational component of grocery supply chains.
What is Direct Store Delivery?
So, what is DSD? Direct store delivery is a form of product distribution that bypasses distribution centers and delivers a brand's products direct to your store.
It simplifies the supply chain and allows for greater flexibility and more sustainable product distribution.
Why do boutique grocers need DSD in 2022?
People are looking for fresher foods
Standard supply chains can be lengthy and slow to react to issues with fresh produce. For example, if you receive a shipment of poor-quality fruits or vegetables, it can take a while for your distributors to source and deliver a better batch, leaving consumers looking elsewhere.
And fresh foods are increasingly popular with consumers, in fact, they were “the primary driver of growth in retail stores,” with 60% of consumers spending up to one-third of their average grocery budget on fresh items in 2019, according to Deloitte Insights.
DSD ensures grocers have enough fresh, often locally sourced, goods on their shelves to meet their customers’ needs.
Avoid costly food waste
Fresh foods may be in high consumer demand, but they’re also highly perishable and rely on fast and temperature-sensitive delivery. As a retailer, you’ll know that there’s nothing more frustrating than the loss of stock due to spoilage, and, in the current market, independent and/or boutique grocers simply can't afford losses like this!
Grocers in the US are facing a rapidly changing consumer environment due, in large part, to the Covid-19 pandemic. McKinsey predicts that the priorities for grocery shoppers in 2022 are choosing healthy options and saving money. On top of this, 41% of consumers ‘intend to purchase more regional and local goods’.
DSD can help your boutique grocery store meet all of these demands. It allows for easier local distribution by skipping long truck journeys to distribution centers and back, and it allows you to stock a wider range of fresh and healthy produce. It also drives a 30% improvement in working capital for retailers by reducing costs of storage, transportation, and labor, according to a Grocery Manufacturers Association study.
Global supply chain issues
Due to logistics disruptions, extreme weather, labor market shortages, and production delays, we have been experiencing significant supply chain issues globally in 2022. While there have been signs of slight improvements in recent months, grocers need to be prepared for the worst.
DSD reimagines traditional supply chains and makes it easier for boutique grocers to maintain an adequate supply of stock. It focuses on distributing fresh foods closer to where they’re produced so that customers on the East Coast, for example, won’t rely entirely on California for greens.
Labor shortages
The main issue affecting supply chains at the moment is a shortage of labor. In the early pandemic, labor shortages were largely a result of workers having to stay home and isolate due to Covid-19. However, in 2022, record-breaking numbers of people are quitting their jobs in what has been dubbed ‘The Great Resignation.’
The food and leisure industries have been some of the hardest hit by these shortages as workers in food packaging plants, meatpacking plants, and slaughterhouses protest against low wages and unfair working conditions.
This has had the most visible impact on grocery stores, with empty shelves becoming an increasingly common sight. The centralized distribution model utilized by the majority of supermarkets has multiple steps before it even reaches the store and relies on a huge workforce to produce and maintain its stock.
Stages of a traditional supply chain from manufacturer to supermarket shelf include:
- Transport
- Storage
- Delivery
- Handover
With many workers needed at each stage.
DSD cuts out many of these stages, bringing products directly from the manufacturer to the store, meaning it’s drastically less labor intensive and less sensitive to labor market shortages.
A more sustainable solution
DSD, with its focus on delivering local produce to nearby grocers, and cutting out the middle man that is the distributing center, is a more sustainable option. It doesn’t make sense to transport produce from a manufacturer out to a distant distribution center and then back to a supermarket not far from the manufacturer, but this is what can happen in a traditional supply chain.
With increasing consumer demand for sustainable options and locally sourced food, DSD makes it easier to achieve this and reduce the carbon emissions caused by trucking produce across the country.
Ready to use direct store delivery in your boutique grocery?
If you’re ready to reimagine the supply chain and give direct store delivery a try in your boutique grocery, DSD-powered distributors like Buffalo Market can help.
Buffalo Market can help you stock your shelves with fresh, local produce, react quickly to customer demand or stock issues, and minimize the risk caused by labor shortages and global supply issues. Yep, that’s right. We handle all of it.
Whether the products are stored with the manufacturer or at Buffalo Market’s own distribution centers, as soon as the retailer requires a restock, our drivers are ready to go.
Buffalo Market distributes, stocks, and merchandises some of the fastest growing and most world-positive brands available to major and independent retailers across the USA.
Want to learn more? Simply fill out this form to let us know about your needs, and a member of our team will be happy to help you out.
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