Distribution

DSD technology helps retailers keep up with beverage trends

(Image courtesy of Encompass Technologies)

In “The Twilight Saga: Breaking Dawn, Part Two,” the Cullen vampire clan races to prove to the Volturi, the governing body for vampires, that the newest member of their clan is not a danger. Renesmee, daughter of Bella and Edward, is half-human, half-vampire. Because she is a hybrid, Renesmee endures quick growth and fast-growing strength, which leads to the Cullens’ uncertainty of her future.

Although there are no half-human, half-vampire beings with accelerated growth or strength involved, the adoption for direct-store-delivery (DSD) technology in the beverage industry is rapidly accelerating.

Cam Koorangi, eCommerce sales manager at Encompass Technologies, Fort Collins, Colo., describes the market as gaining popularity.

“eCommerce retailer hub offerings are growing quickly,” he says. “Wholesalers are racing to inform their retailers about their product offerings and ever-expanding portfolios pose a challenge to the sales team.”

Koorangi suggests that offering retailers a “wholesaler playbook” they can access 24/7, place orders, make payments and browse new products through, as well as view promotional products, makes the most sense in today’s fast-paced, ever-changing environment.

“In general, eCommerce within the beverage industry is experiencing rapid growth and innovation fueled by rising consumer demand for convenient online shopping experiences, technological advancements that improve security, scalability and functionality, and the need for businesses to adapt to a digital-first economy,” he explains.

Jeff Woody, sales executive at Encompass, notes how SKU proliferation has affected the state of the DSD technology market.

“Distributors are bringing more brands to their portfolio than ever before,” he says. “Holding market share and shelf space is the game. This has created issues with sales reps, as they are being asked to talk about each brand as if they are the expert.”

Koorangi feels that the increasing number of SKUs has posed a challenge for wholesalers.

“This has really accelerated the innovation offered by DSD software platforms,” he states. “The complexities created by SKU proliferation have led to the development of WMS, automation, easier mobile platforms, voice-pick and more.”

He goes on to say that managing a vast inventory online requires robust eCommerce technology. Koorangi lists the following features:

• Advanced product information management (PIM) systems to ensure accurate and detailed product data for each SKU.
• Efficient order fulfillment systems to handle complex picking, packing and shipping processes for diverse products.
• Scalable infrastructure to accommodate the growing number of SKUs without compromising performance.

“Distributors must employ robust eCommerce platforms capable of handling large product catalogs efficiently and providing customers with relevant search and filtering options,” Koorangi says.

Other trends in the beverage market also are prompting distributors to employ this technology in their operations, including shifting retailer preferences.

“Retailers are increasingly becoming more familiar with eCommerce offerings and beginning to see more and more value in them,” Koorangi says.

He adds that growing demand for specialty and niche beverages is another factor.

“eCommerce platforms allow distributors to offer a wider selection of products, catering to diverse customer preferences,” Koorangi explains. “These solutions allow wholesalers that otherwise wouldn’t have the outreach capabilities to communicate and offer products to retailers in a given market.”

He points to improved logistics and deliver infrastructure as well.

“Advancements in logistics and delivery services enable efficient and cost-effective delivery of beverages to customers,” he says.

Turning to DSD technology
As for how DSD technology has changed in recent years, Koorangi says that eCommerce technology has evolved to offer advanced features. These features include artificial intelligence (AI) powered recommendation engines, seamless omnichannel integration, mobile optimization and secure payment gateways.

“These advancements have improved user experience, increased efficiency and expanded the capabilities of both software and hardware applications,” Koorangi says. “These advancements have led to the development of more sophisticated software applications with robust features, improved security and better scalability.

“For the industry to grow and thrive, a shared understanding of a shared technological landscape must be established to drive the industry forward.”

— Cam Koorangi, eCommerce sales manager at Encompass Technologies

“Additionally, it has driven the need for hardware advancements to support the increased processing power required for complex eCommerce platforms,” he continues.

Koorangi notes that utilizing DSD technology solutions offers a plethora of benefits for beverage distributors. The following are some of those benefits:

• Increased sales and market reach: Expanding access to a wider retailer customer base through online channels.
• Improved order efficiency and accuracy: Streamlining the order processing and fulfillment process.
• Reduced operational costs: Automating tasks and streamlining operations lead to cost savings.
• Enhanced customer service: Providing customers with convenient self-service options and real-time order tracking.
• Improved data-driven decision-making: Gaining valuable insights from customer data to optimize product offerings and marketing strategies.

As the industry becomes more competitive and evolves as consumer preferences change, Koorangi says it is imperative the three-tiers work together to further the good of the industry. And while the fast-moving technological developments of the past 30 years have created significant efficiencies for each tier, he states that it also has “created functional gaps” between suppliers, distributors and retailers.

“For the industry to grow and thrive, a shared understanding of a shared technological landscape must be established to drive the industry forward,” Koorangi explains. “In 2020, one of our key objectives is to unite the three-tiers via eCommerce. DSDLink simplifies the beverage ordering process for retailers, allowing them to order from all of their distributors at once, anywhere, anytime, on any device.”

He says that the platform also funnels distributor information relevant to pricing, promotions and popular products to the DSDLink app, allowing the retailer to browse new products and communicate their interests and needs.

“Suppliers use the platform to suggest the right products to the right retailer and promote their new offerings with advertisements,” Koorangi adds.

Yet, there are challenges beverage distributors must consider before selecting DSD solutions, with Koorangi noting that there are several.

“… Including integration with existing ERP systems, scalability to accommodate fluctuating demand and SKU growth, compliance with industry regulations (such as alcohol sales restrictions), cybersecurity risks, and the need for ongoing technical support and training,” he says.

Woody also notes considerations, suggesting that pushback from “old school” retailers and sales reps alike can be an issue.

“With AI making its way into the world now, people are in fear of AI replacing their jobs,” he says. “However, with the right approach and training, sales reps learn to use DSDLink to benefit their work-life balance.”

Future forecast
Looking ahead, Koorangi suspects that beverage distributors will continue to adopt technology that streamlines and automates their process, which will in turn, “create a highly competitive landscape.” He feels that distributors will continue to look for ways to cut costs and increase efficiency through DSD solutions.

“There will be heightened pressure to remain competitive in a market where consolidation is on the rise and eCommerce continues to disrupt,” Koorangi says. “Further out on the horizon, there is potential for self-driving trucks and drones to push the automation element one step further.”

He is most excited about eCommerce and its effects on the industry as a whole.

“We’ve seen what fully integrated solutions can do for the DSD industry, and now we have the ability to take that idea a step further, creating solutions that will increase operational efficiency for the entire three-tier system,” Koorangi explains. “Digitally connecting the three-tiers will open new doors for all parties involved. There is true power in collaboration, and we together can move the industry forward.” BI