In a recent study, 62 percent of surveyed companies viewed direct store delivery as a key to their business’s future growth. Direct store delivery can offer the boost in efficiency and sales that a company needs to get ahead of the competition. If your business is not offering the profit margins you want, this kind of supply chain management model might be the solution.
But what is direct store delivery and how can it improve your business?
Read on to see what this strategy involves and the benefits it can offer.
Direct Store Delivery Explained
Direct store delivery is a supply chain management model. It involves delivering products from distributors and suppliers directly to the store where they will be sold. Unlike a centralized distribution model, direct store delivery skips over the retailer’s warehouse.
With direct store delivery, the distributor most of the time also has to handle the unloading and stocking of products instead of leaving this to the retailer.
Direct store delivery is important for industries that deal with products with short shelf lives. They include the grocery and pharmaceutical industries.
Benefits of Direct Store Delivery
For businesses thinking about this kind of model, there are many benefits they can expect. Let us look at the ones that can make the biggest impact on your revenue and your company’s future.
Quick Time to Market
Direct store delivery eliminates the middlemen of distribution centers. It reduces the time the product takes to get to market. The products do not have to be unloaded at a warehouse before being loaded once more to go to where they will be sold.
It also makes sure that if demand surges and retailers want to get certain products into their customers’ hands as soon as possible, they can do so.
Efficient Handling of Fragile or Perishable Goods
Perishable goods require careful handling and speedy deliveries. Many times, products may need special containers, like refrigerated trucks or wooden trays. Other products, like potato chips and eggs, may need added protection to keep them intact.
With direct store delivery, there are fewer chances of mishandling. There are fewer people involved in delivering the goods to where they need to be. Manufacturers maintain control of their products right until they get delivered to the retailer.
Perishable goods like bread, produce, and dairy are high-volume items at a retailer but spoil quickly. By using a direct store delivery model, you reduce the time the product spends on the supply chain. This allows the item to live longer on the shelves.
The retailer can depend on a quick restock, as well, with direct store delivery.
Improves Seasonal Sales
There are businesses that rely on seasonal items. They can be items like winter vegetables, summer fruits, Valentine’s Day candy, holiday decorations, and much more. Whether they are perishable items or not, direct store delivery makes it easier for distributors and manufacturers to get them to retailers.
Since there is a small window of time when these items will be in high demand, being able to depend on a fast model like direct store delivery is vital.
Improves Management of Shelf-Space
With direct store delivery, the retailer and the supplier or manufacturer work together without having to depend on the schedule of a warehouse or distribution center. The supplier or manufacturer is the one in charge of inventory management, which ensures the retailer always has the items they need.
For high-demand products, direct store delivery can be beneficial for the retailer as well as the supplier or manufacturer. Having full shelves means more sales.
With a direct store delivery model, businesses can reduce labor costs as well as storage costs. With no warehouse or distribution center in the middle, there are fewer costs, which translates into a larger profit margin. There are no warehouse or distribution fees for storing, packaging, and shipping.
Many of the businesses that benefit most from the delivery store retail model are those that sell items with lower profit margins as well as higher profit margins. By allowing manufacturers to worry about the ordering and restocking of the lower-margin items, retailers can focus on the higher-margin ones. In the grocery industry, direct store delivery can offer as much as a 25 percent increase in savings.
Builds Brand and Retailer Relationships
The manufacturer and the retailer have much more contact in a direct store delivery model. The brand has direct access to the retailer, making it easier for them to get the market insights they need to create better products or services. When the brand knows what items are not selling as well and what the recent market trends are, it can come up with the best strategies to sell effectively.
The retailer, too, gets a better sense of the manufacturer and brand. This can build confidence in the brand’s products, which can translate into the retailer pushing those products more.
Boosts Customer Satisfaction
Ensuring customers can get the products they need at all times creates the kind of trust and client satisfaction that everyone wants. If a customer knows they can find what they need at a particular retailer, they are more likely to shop there. For a manufacturer, this is the way to build customer loyalty.
Make Your Business Efficient
Direct store delivery can offer the strategies a manufacturer or retailer needs to make their business a success. With advanced direct store delivery apps like OrderTaker, you can put in place the strategies you need to see your business improve.
Contact us today to learn more about OrderTaker!