Powering Growth Through Direct Store Delivery

By Grocery Manufacturers Association

AMR Research partnered with GMA to conduct an online survey to better understand suppliers' and retailers' current perceptions of the DSD model. Thirty-seven retailers and 42 North American suppliers responded to the GMA/ AMR Research survey. This report combines research from these sources to present insights to position DSD in today's market.

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.

DSD also plays a major role in store execution. It is an opportunity to standardize and improve execution at the shelf. Knowledgeable representatives of suppliers of DSD products are in stores multiple times a week merchandising products. The labor contribution from DSD suppliers represents 25 percent of total store labor in the North American market.

For suppliers, DSD is a commitment by suppliers to deliver to shoppers what is needed, when it is needed on an individual store basis. For retailers, DSD unleashes an unparalleled opportunity to drive growth, power innovation, and improve cash flow. Together, as a trading partner network, DSD is the path to deliver a unique shopper experience. In the face of changing lifestyles and rising demands of today's shopper, it is the most effective supply chain design to deliver what customers want at the shelf where it counts most. It also forms the basis of a true collaborative relationship between the retailer and the supplier.