The distribution industry stands at a transformative moment in its relationship with AI. Our latest research reveals a big shift: 95% of distributors now consider AI either vital or important to their success over the next three years.
This isn’t just optimistic speculation – it’s backed by concrete results from early adopters who are seeing real returns on their AI investments.
The conversation has evolved from “Should we adopt AI?” to “How quickly can we implement it?” Marketing departments are leading the charge with 48% either already using AI or in the process of deploying it. That’s followed by website/digital initiatives at 45%, and sales at 36%.
Consider this example from our recent technology panel: A large automotive parts supplier implemented AI-powered order processing and saw results within days, not months. Their system now handles customer orders through multiple channels – phone, email and PDFs – with the AI assistant automatically processing orders into their ERP system while sales calls are still happening.
Another success story comes from the electrical distribution sector, where one of the industry’s largest players used AI to accelerate their sales onboarding. The result? New sales representatives reached the same performance levels as experienced hires within three to four months – a process that traditionally takes years.
Our 2025 State of AI in Distribution research shows that AI adoption is delivering value in three key areas:
1. Efficiency Gains
Nearly half of distributors in our recent research hope to increase efficiency with GenAI, with time savings and cost reduction to top of mind.
2. A Better Customer Experience
For example, AI-powered automation can convert complex communications from multiple formats (even if requests have missing part numbers or none at all) into an ERP with little to no intervention. That reduces time to quote generation, leading to higher win rates, and a productivity boost of 40% to 70%, freeing sales reps to focus on higher-value tasks.
3. Sales Performance
For example, distributors often ask salespeople to upsell, but they don’t give them the tools to do that effectively. AI can help distributors identify gaps in customer spend, pulling from data that was previously buried and hard to access from within the ERP. The benefit: increased lines per order, higher average order value and improved order profitability. AI-driven cross-sell models can increase sales by 5%-8%.
The Path Forward
What’s particularly interesting is how companies are approaching implementation. Rather than attempting wholesale transformation, successful distributors are taking a targeted approach. They are identifying business problems, implementing solutions in controlled phases and scaling based on results.
“The customers that are most successful have two things in common,” noted one technology leader in our recent panel discussion. “First, they have clear business problems they’re trying to solve. Second, they hold their teams accountable through the change curve.”
This shift toward AI isn’t just about automation – it’s about competitive advantage. With 33% of distributors expecting significant increases in GenAI usage over the next three years, and another 35% anticipating moderate increases, the gap between early adopters and laggards is set to widen.
The distribution industry is reaching a tipping point with AI adoption. Those who wait to implement these technologies risk falling behind.
Want to learn more about how distributors are implementing AI successfully?
Join us at the Applied AI for Distributors Conference in Chicago, June 24-26, 2025, where industry leaders will share their implementation strategies and lessons learned. You’ll get practical insights and actionable steps to accelerate your AI journey.
This isn’t just another trend – it’s a fundamental shift in how distribution businesses operate. The question isn’t whether to adopt AI, but how to implement it effectively to maintain competitive advantage in an increasingly technology-driven marketplace.
Brian Hopkins is recognized for his expertise in customer service and operational efficiency within the industrial distribution sector. His career trajectory showcases a series of impactful leadership roles, marked by innovation and strategic growth.
Notably, at W.W. Grainger (2002-2011), Brian significantly enhanced call center operations, and deployed the Grainger strategy by leading an operational staff of 7 direct reports and more than 800 employees in Illinois, Wisconsin, and Iowa Call Centers. His tenure as District Branch Operations Manager and Branch Manager demonstrated his proficiency in managing large-scale operations, overseeing 18 branches with $200 million in revenue, and effectively running a $25 million branch operation.
Subsequent roles include driving operational and customer service transformation at HD Supply Power Solutions (2011-2015), leading customer experience innovations at Hisco (2015-2020), and enhancing multi-site customer service strategies at Redi Carpet (2020-2022) and AZP Multifamily (2022-2023).
Brian Hopkins' career is a reflection of his unwavering dedication to customer service excellence and operational efficiency in industrial distribution. His tenure, especially at W.W. Grainger, has had a lasting impact, showcasing his capacity to innovate and lead in complex, multi-site operational environments. His academic background, including an MBA and a Bachelor of Arts in Business Management, complements his extensive practical experience.
Brian has consistently demonstrated his ability to lead, innovate, and drive sustainable growth across various operational landscapes.
1 thought on “AI in Distribution: From Skepticism to Strategic Advantage”
Brian: Could we have a quick conversation concerning your thoughts on using Canal AI in our inside sales department.