ADI’s Digital Transformation Goes Beyond the Technology

We recently spoke with Stu Tisdale, VP of Strategy and Commercial Excellence at ADI Global, a distributor of security, AV and low-voltage products. Tisdale is responsible for facilitating strategic decision-making and driving digital transformation across ADI’s global business.

Tisdale shared ADI’s remarkable digital transformation journey, including touchless ordering, analytics, AI and machine learning, integration of offline and online and more. For ADI, it’s not about the technology alone. It’s about how that technology can enable the ADI team to do their jobs more efficiently and effectively.

Distribution Strategy Group: Tell us a little bit about ADI.

Stu Tisdale: ADI is the leading wholesale distributor of security, fire protection and other low voltage products globally. We’re a $3 billion business in terms of revenues. We’ve grown our revenues for 10 consecutive years, and we’re in business in 14 different countries.

What we do is package smart home and smart building technologies and make them available for sale to pro contractors that install, maintain and service smart home and smart building systems. We’re a high-touch distributor. We have field sales, telesales and a strong digital website and mobile app experience. We also integrate various sales channels throughout our 200 stocking locations across the globe and 115 branches in North America.

The traditional electrical line of trade, I would say, is our closest cousin. We operate in the low voltage technology space and work with technologies from physical security, such as video surveillance, fire detection and intrusion alarm systems, to audiovisual technologies, data communications and infrastructure.

DSG: Tell us about some of the digital transformation initiatives you’re involved with that are driving results for ADI.

Tisdale: Sales productivity and effectiveness are the primary objectives when embracing digital technologies. We first looked at non-value-added work within our sales team. We talked with our branches about how customers interact and found that a lot of volume was coming into the store over email. Around eight quarters ago, we started the implementation of email to EDI technology. Now, we’ve peeled off around 10% of our global order volume.

Analytics has formed the foundation of sales effectiveness. We invested in a business intelligence tool years ago and have gone through several cycles of development. It’s now a global platform. We focused a lot on deploying analytics down to the store level, down to the individual salesperson – ensuring they have the right KPIs.

Now, we’re expanding analytics beyond just the four walls of our business. If you’re an ADI supplier in North America, you get a daily BI dashboard that shows a variety of information. It’s interactive and shows you how your promotions are doing and how key categories are performing. We’ve had this in place for 8 or 10 quarters, and it’s driving digital collaboration, shared goals and shared decision-making with our supplier community. So I think it’s a good example of using digital tools and technologies to drive enhanced performance.

DSG: You have marketing automation feeding into CRM, so your sales reps can see what’s coming in. What are some other things you have connected to the CRM?

Tisdale: We’ve got a few different connection points into our CRM. Recently, we’ve implemented an omnichannel call center software platform. What’s taking place in our customer support centers has provided a whole new level of insight. There’s constant flow back and forth between systems.

If you’re calling into one of our call centers, you’re prioritized based on different characteristics. Then there’s an event-based survey deployed to you after the call. The survey comes from our CRM and then gets fed back into the CRM and omnichannel software. This allows our managers in the contact center to immediately pull the recorded phone call of a poor survey.

DSG: There’s a split between call centers and branches at ADI. How do you coordinate those organizations’ efforts in creating demand and servicing customers?

Tisdale: We’re giving the sales team insights around what the customer is shopping for, searching for, what they ordered digitally and picked up locally, and vice versa. So those types of insights, which are mainly delivered through business intelligence, are good examples.

Then there’s also the customer experience and how you link what a contractor can do in your digital shopping experience to how they interact locally with their preferred store branch representative.

An example of CRM facilitating an important process is requesting a quote. Our contractors and pros are installing during the day, and they’re writing their proposals and creating quotes for the next job at night. Our stores are not open past 5 or 6 p.m., so we have to provide them the opportunity to request a quote. When you do that on our website, it runs through the CRM’s workflow management tool to ensure the customer gets an answer within 24 hours. That’s a great example of integrating the digital channel with what happens at the store level with a salesperson.

DSG: Can you share more with us on how you integrate online shopping into your branches?

Tisdale: The online-to-branch pickup is a frictionless experience for the contractor or pro to order goods digitally and pick them up locally. They order online through our digital branch directly to a locker at the local store. The locker is available 24/7. The process delivers notifications to the contractor when the order is ready to pick up. Having a tight integration between online ordering and local pickup is an area that is very important.

The second is endless aisles. We’ve got an endless-aisle experience in several branches that allows salespeople to introduce the ecommerce experience by going to an endless aisle kiosk and getting a contractor signed up for ecommerce purchasing through the digital branch. It also allows the contractor to perform certain account management and self-service tasks at the branch. We’re seeing some strong, positive feedback around the endless-aisle concept that’s locally available within our branches.

DSG: What advice would you give someone about improving profitability in a distribution firm?

Tisdale: Well, I’d first start with analytics and BI. That has to be the foundation that is woven into the way you do business. If you’re not confident in your BI and analytics area, I suggest starting there and investing.

Secondly, sales productivity and effectiveness. If we go back to the earlier example around email to EDI, there’s a certain portion of hiring done by every distributor to serve demand. Sales productivity and effectiveness technologies allow you to take that portion of the investment otherwise put towards serving demand and repurpose it towards creating demand.

Thirdly, and this builds on the recommendation around analytics, is AI. Every distributor has billions of data points they generate on a daily or weekly basis. AI and machine learning technologies can process large amounts of data to produce insights and learn. We have implemented two AI machine learning technologies that have delivered a significant amount of dollars of return.

I would highly recommend looking at applications that could address some areas in your business where you think there’s waste or an opportunity to do better. We’re in the early innings for distribution in terms of AI and ML, but we’re in a great use case because there’s so much data in our business. The slightest tweaks to processes can produce big returns and profits.

DSG: Where are you applying AI? Is it in handling demand? Generating demand? Or both?

Tisdale: That’s a great question. It’s in retaining demand and also generating new demand. I’ll give you an example that I think applies to every distributor business I’ve worked in. If you’ve got an account growing by 20% or 30%, everyone feels great about it. But beneath the surface, if you’re selling hundreds of thousands of products, it’s impossible for any one salesperson or analytics team to uncover insights around which categories are growing and which you may have lost to another competitor.

Machine learning can crawl through all those transactions and produce patterns that would have been completely unrecognizable by any management system, salesperson or analytics team.

It’s also useful in generating new demand. For example, it’s difficult for one salesperson managing an account to see what another salesperson is selling and buying. There may be relationships around products they should be buying and aren’t. Machine learning can help uncover those and produce insights.

DSG: Regarding email automation, do you have any feedback from your customers?

Tisdale: We do. When we’ve had the opportunity to explain the value proposition of what we’re trying to do, which is to get them an order confirmation and acknowledgment much faster and with fewer data entry errors, they seem to really buy into it.

When the pandemic struck last year, and some of our stores were going offline, our top customers in those stores were able to get orders through and shipped. They weren’t waiting on the order to be entered. So we see it as an efficiency and business continuity tool.

DSG: What other initiatives are you looking at in digital transformation over the next few years?

Tisdale: At a high level, we’re going to continue to look at AI and machine learning technologies. Like I said, I think we’re at the beginning stages of that in wholesale distribution. We’re going to continue to monitor the market and hopefully move forward with other implementations if we have the right use case.

In terms of analytics, I mentioned extending analytics beyond our borders to suppliers and then to customers. Those are objects to look at in terms of how we leverage our data, so it’s valuable for all of our stakeholders. We’re working every day to reduce friction in the buying experience and improve effectiveness with our sales team by integrating and passing data across platforms to generate better insights and guide us to better actions.

Watch our interview with Tisdale below: