chat with us Lets talk! 0722759081 / +2348024089399

Prioritizing Your Direct To Store Delivery To Get The Most Out Of Your Business

What is Direct to Store Delivery all about?

Over the past few years, competition in the retail industry has intensified. As customer demands for speed and convenience are increasing by the day, more businesses are embracing omnichannel selling methods. Direct to Store Delivery or Direct Store Delivery (DSD) is a retail distribution model, where a supplier or manufacturer delivers merchandise directly to retail stores for selling, instead of sending them to warehouses or distribution centers. Direct Store Delivery is gaining popularity among businesses involved in the retail of pharmacy drugs, fresh foods, edible consumer goods such as baked foods, snacks, soft drinks and beverages, organic farm produce, and locally produced alcohol, etc. Going direct to retail outlets or in some cases even the end customer allows businesses to save time and cost involved in wholesale distribution or storage in secondary warehouses.

How is Direct Store Delivery Different from Centralized Distribution?

In a centralized distribution model, the supplier or manufacturer delivers finished goods to a primary warehouse. From this primary location, it is further transported to various distribution centers within cities or directly to retail outlets as and when the requirement arrives. This is typically a periodic process, wherein a store manager calls the warehouse to place an order. The ordered quantity is then shipped from the warehouse or distribution center to the retailer to replenish stocks. In this model, the retailer is completely responsible for inventory management. On the other hand, in the case of a direct to store delivery, the inventory management, and shipment load moves to the manufacturer or supplier.

With just nine locations to visit, the number of possible ways of traveling equals the grains in 1 kg of sand. When you increase the number of locations to 22, the possibility of routes increases to the number of grains of sand in the entire universe. Take the number of stops to 102 and the possibilities of the ways to travel become incomprehensible. Globally, the route optimization software market is expected to witness growth at a CAGR of 10.9% over the forecast period of 2020-2025. Delivery route optimization helps drivers to complete day-to-day tasks in less time and eliminates manual delivery route planning with automated multi-stop route planning ability. Such software makes it possible for fleet route optimization as it can optimize the routes for several drivers simultaneously.

What to look out for in route planning software?

Rider preferences

Taking into account rider skills, expertise, and preferences for a smooth transition from traditional routing to AI-based route planning platform

Autonomous route planning

AI-driven route planning that can reduce errors caused by human negligence and minimize human intervention

Accurate geocoding

Advanced geocoding abilities that can convert fuzzy addresses into precise geographic coordinates on the map

Intelligent vehicle allocation

Smart vehicle allocation based on traffic, shipment, vehicle type, etc.

Optimal fleet mix

Offering a best-fitting fleet mix based on consumer preferences

First attempt delivery

First attempt delivery is ensuring deliveries in the first time around, saving you storage and re-delivery costs.

How is DSD Delivery different from distributor-led delivery?

Typically , manufacturers rely on intermediaries called distributors to make sure that their products reach the retail stores that are frequented by consumers. Leading distributors are known to have an extensive network of warehouses and distribution centers, and have a large fleet at their disposal. But distributors are known to provide functions beyond just deliveries and logistics. They often have strong relationships with retail groups, given that they tend to focus on a single market. Many of them actively sell and market the products of the manufacturers that they work with. The upside? A chance for manufacturers to focus on what they know best, and increased sales to boot. But the downside of it is that distributors charge steep commissions, which may not be sustainable for all manufacturers to commit to. This is especially relevant for manufacturers of products with lower profit margins, or those looking to scale up in the near futur

Implementing a Direct Store Delivery Model in Your Supply Chain
hether you’re revisiting your supply chain strategy to fulfill customers faster, or meet the seasonal dynamic demands of the retail market, or looking to implement a more cost-effective distribution model, Direct Store Delivery is the best way forward. While implementing DSD might seem overwhelming, you can ensure a smooth transition by following these simple steps. 01 Plan your DSD Strategy Do you want to implement direct store deliveries as an additional or seasonal distribution model along with your existing retail distribution model, or do you wish to move to a DSD model completely? Begin your implementation by figuring out the tenure of DSD in your business. It will allow you to narrow down your secondary distribution effectively.

You might already be dealing indirectly with the end market through your distributors or wholesale dealers, but when it comes to Direct Store Deliveries, you have to deal with the retailers directly. You have to understand market dynamics from the ground up and build a relationship to enable smooth direct store deliveries in the long run. 03 Plan your delivery routes The most crucial step in going direct to the store would be to plan your delivery routes to hundreds of retail stores spread across multiple locations effectively. Manual route planning will not cut it as it is both tedious and error-prone. An efficient route planning software can help in streamlining the whole process. 04 Develop a feasible sales beat plan Depending on the population density in a locality, or the demand for a certain category of products, stock replenishment timelines may vary from one retail store to another. As a direct-to-store distributor, you must plan your sales beat flow effectively in order to remain cost-effective and efficient. Sales beat is the permanent journey planning of salesmen for a defined period to decide which outlets to visit, who should visit a store, the right time to visit, and how to visit in order to replenish retail stocks. 05 Deploy and manage the delivery fleet In a conventional distribution model, brands typically send finished goods to a secondary dealer, and the dealer then takes over the distribution to retail stores and customer markets. In the DSD model, this responsibility lies with the brand itself. Therefore, careful planning and management of the delivery fleet is vital — how many owned vehicles vs. how many rented vehicles should be deployed in the delivery, and how to manage these fleet vehicles once they hit the roads?

Fleet in the Direct Store Delivery Supply Chain

Fleet offers state-of-the-art logistics technology solutions to enterprises involved in Direct Store Deliveries, optimizing the DSD supply chain with automated route planning, real-time visibility, fleet management and more. Fleet offers logistics tech to enterprises in a Software-as-a-service (SaaS) model that is fast and easy to implement, and does not require a huge initial investment. SaaS solutions run on a pay-as-you-go model that allows scaling up and down based on business requirements and market trends. Moreover, Fleet’s AI-enabled tech is hosted and managed on the cloud, which makes it seamless and secure.

Fleet's Vehicle Routing & Scheduling Engine

Fleet Dispatch Management Platform (DMP) enables organizations to drive real-world efficiency across all fulfillment channels, be it improved SLA adherence, resource utilization, and unit economics across most major fleet types. The platform’s AI-based RO solution, the Vehicle Routing and Scheduling Engine, provides supply chain enterprises with an automated route planning and optimization solution that considers multiple real-life constraints and distribution models. It is a comprehensive solution in logistics that enhances fulfillment operations and increases consistency in transport planning, with nearly no human intervention. The cloud-based tool also facilitates GPS tracking for monitoring vehicles and providing clients with accurate and real-time ETAs. The engine optimizes delivery routes based on three different metrics - geography, time and vehicle, offering a single screen view of the distribution plans. It considers real-life constraints and distribution models to offer the shortest possible and most effective delivery routes, ensuring optimization across freight costs, time on-road, distance on-road, and compliance with SLAs.
Delivery route planning and optimization
Fleets’ AI-enabled logistics planning software, DispatchIQ allows brands to plan delivery routes automatically, optimize delivery schedules and handle on-demand orders along with scheduled orders with rerouting on the go. It minimizes human dependency involved in the conventional pen and paper logistics planning, and helps in planning the shortest and most optimal routes for multiple delivery locations. Taking shorter routes improves retail serviceability, speeds up deliveries and reduces fuel costs for the business.