Ensure On-Shelf Availability for DSD Products
Key DSD categories are associated with more frequent trips per shopper and higher absolute dollar value sold…certainly not news to you.
Magic™ works in direct-delivered categories exactly the same as it does with warehouse-distributed categories. Reliable on-shelf availability of high-demand supermarket items is just as important regardless of source.
“Of the top 7 most frequently shopped categories, 5 are DSD-dominated, and bread, milk and carbonated soft drinks are especially significant, because they drive shopper trips to the store…which you already know.”
Supermarket operators like you are challenged to meet shopper expectations in high-awareness DSD categories, where the out-of-stock problem is frequently magnified. While at the same time shrewd delivery drivers are “facing-over” outs in their brands further degrading customer satisfaction. Leading retailers recognize that the consequences to stakeholders are too great to leave the order quantities solely to the vendor’s discretion.
“Magic™ will vastly improve performance on key items and retain those profitable shopping trips.”
We are often asked…
How did the DSD vendor community accept the orders from the stores? Did any pushback exist?
As it is with any change in the current process or status quo, there can always be some that resist the changes, often because it takes away a level of control of the process that was once had. In this case, in talking to our customers who have implemented DSD ordering, there was an element of this, but once the vendors saw that the orders were truly accurate and that the demand signals were driving the orders, they truly understood the benefits.
- We had several DSD vendors at our biennial User Conference in 2018 and they told our attendees that after the first few speedbumps and push-backs, their driver community had embraced it completely.
- Customers who have implemented ordering in DSD categories utilize a common best practice when vendors disagree with the order quantity. Since arbitrary order adjustment often causes other problems, they want vendors to trust the orders as they are. So, unless there's a blatant error in the Perpetual Inventory (one of the main reasons order quantities are "off"), the order stands. In order to verify, and to possibly prove to the store that it needs additional supply, they are given a handheld device to go and check the counts. If there is a discrepancy, they do a count update and re-run the order.
Daily variations in service levels in DSD categories cause gaps often seen Sunday afternoons. Item availability falls as low as 91.3%, while promoted item availability drops to an average of 85.1%! Service-levels like that are liable to put ANYONE out-of-business.
“Don’t accept this when you don’t have to.”
Industry research from GMA and Roland Berger indicates that increasing DSD on-shelf availability can increase sales by as much as 2.9%; $75,000 annually for a typical supermarket.
With automated ordering of DSD products in your stores, you’ll experience significant improvements in DSD on-shelf availability, sales, and service levels to the stores.
In addition, you’ll see reduction in scheduled deliveries, and reduced shrink up to 25% or more.
“Shrink reduction alone often pays for the system.”