Despite some high-profile supplier departures and a belief among at least some in the industry that stores might be better served dealing with fewer suppliers, consumer shopping trends portend a continued increase in direct-store delivery as a means of stocking store shelves—a mixed blessing of sorts for retail.
Direct-store delivery (DSD)—the practice of suppliers using route drivers to stock and merchandise stores, as opposed to a controlled or third-party warehouse making the deliveries and then store employees stocking and merchandising—is often the fastest avenue to the variety today’s shoppers demand. But it can often result in a business that’s difficult to manage and potentially damaging to customer loyalty when out-of-stocks occur.
Fields describes Repositrak as providing “fire prevention” for DSD items in stores. GlobalWorx is more like a fire department.
Founded by Bill Lecznar, a former Delhaize America operations executive, Richmond, Va.-based GlobalWorx provides a communication platform that Lecznar says unites trading partners that often have disparate means of finding and addressing issues when it comes to DSD, such as out-of-stocks. Based on agreed-upon terms between retailers and suppliers, the platform provides a system for partners to exchange messages with one another and can automatically escalate them based on their severity.
This, Lecznar says, is a cure for retail store managers whose typical response to a DSD out-of-stock—when it’s even noticed—is simply to wait until the route driver makes a next visit.
“From an industry standpoint, you have all these retailers developing their own programs. You have every supplier out there, for the most part, developing their internal programs and there’s not one communication platform that brings it all together,” he says. “This is an industry issue that one retailer can’t fix and one distributor can’t fix. There has to be a platform that brings it together.”
Over time, aggregated data recognizes common issues and patterns and can highlight specific issues and sales differences from one location to the next, Lecznar says. It is common for even neighboring stores to have vastly different patterns.
Lecznar estimates retailers can lose 4% of their sales every year simply from common items being out of stock or not readily available on shelves, while companies participating in the program—Southeastern Grocers is one—saw DSD category sales increase by 3.5%. “That’s a lot of money,” he says.
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