Our team helps educate clients on the benefits of creating their own DSD platform and or using existing DSD distributors to launch their products into the marketplace.
As retailers become more advanced in store execution, DSD is uniquely positioned to power growth. Today, DSD represents 24 percent of unit sales and 52 percent of retail profits in the grocery channel.2 With growth for the store coming from five areas—higher revenue, greater contribution margin, accelerated working capital, better returns on trade deals, and improvements in shopper loyalty—DSD is poised to become even more important to the retail trade in future years.
- The labor contribution from DSD suppliers represents 25 percent of total store labor in the North American market.
- DSD products represent 24 percent of unit volume sold in a store.
- Seven of the top ten largest grocery categories (by unit sales volume) are managed through DSD processes (Beer, Carbonated Beverages, Fresh Produce, Milk, Salty Snacks, Bread and Baked Snacks, Frozen).
- DSD categories also have more frequent trip types per buyer and a higher absolute dollar volume sold by category than other retail products.
- DSD products represent up to 52 percent of the contribution margin of sales at the store.
- DSD plays a major role in bringing new products to market providing excitement and variety to the store to shape the shopper experience.
- 62% of new products launched were brought to market using DSD processes.
- DSD offers a unique opportunity for a retailer to power growth. This growth takes five forms:
- – increase in volume at the store which translates to more sales
- – improvement in margin on products sold
- – acceleration in working capital
- – improved trade effectiveness of promotional activities
- – capabilities to better shape shopper experience to build shopper loyalty
Source: Grocery Manufacturers Association