There should be no question that AI is exploding, disrupting and modernizing everything from order entry to analytics.
With just over a tenth of distributors using AI-enabled software right now for sales and marketing, it won’t be long before it’s so commonplace that companies not embracing this technology will fall behind.
In a recent Distribution Strategy Group Distribution Leader Panel, Distribution Strategy Group Co-Founder Ian Heller talked with three industry experts on the growing impact of AI:
- Renata Morgan, Senior Manager of Distribution Business Integration, Rheem
- Mike Powers, Director of eCommerce and Digital Strategy, ARG Industrial
- Mike Aufdembrink, Vice President and CIO, Summit Electric Supply
Did you miss the webinar? Access it on-demand.
AI’s Impact (So Far) on Sales, Marketing and Digital Strategies
Our panelists echo the broader trend out there, which is that many distributors are currently in the trial stage of AI adoption.
Aufdembrink believes we’ve just scratched the surface of AI’s impact.
Summit Electric Supply currently uses AI tools to provide predictive insights in the form of recommendation engines at the pricing and product level. “Summit Electric Supply uses these tools daily with their CSRs,” he said. “We’re working on the prediction side to understand customer segmentation better. We want to try to promote better campaign efficiency and influence purchase propensity.”
For Morgan, the use of AI is more “ad hoc.” “We use AI for some content and image generation, but in terms of a concerted, well thought out strategy deployed across the business, it is still in its infancy,” she said.
Aufdembrink said they’ve been using generative AI. “We have ad hoc uses, from helping build website content and job descriptions to doing RFPs.”
Powers said his company has used AI-powered business intelligence tools for the past few years. Organizationally, they’re helpful for product recommendations around reordering, he said. “We are very much in the survey and assessment stage when it comes to some of the AI tools out there.”
Getting Your Data Ready for AI
Data is the lifeblood of AI, so quality matters.
“Most organizations probably don’t do as good a job with data as they should,” Aufdembrink said. “What you’re trying to do with AI is look at all this historically dirty data. It’s a daunting task to throw some of these algorithms at stacks of data that may or may not give you the answers you want.”
Morgan said there are a lot of factors at play. “There’s a lot of reliable transactional data, but if it exists, a lot of that supporting data might not be complete or consistent. What data points are missing, and what can you do to fill in those blanks slowly and iteratively? Using your data over time is daunting but breaking it into digestible bite-sized pieces seems the best approach.”
“Do you think there’s going to be a time when a significant number of orders come in that weren’t entered through a keyboard?” Heller asked the panel.
Heller describes the keyboard as “a clunky, slow, almost ancient interface between your brain, which is a computer, and the computer that you’re putting the order into. Talking is faster, but it doesn’t seem like many orders are placed by voice yet.”
Aufdembrink believes it’s only a matter of time before voice ordering becomes a go-to. “I think this will turn into a bit of an AI arms race,” he said. “Someone’s going to get there first, and everyone else is going to have to compete. It makes sense that as the efficiencies of AI come to bear, you’re going to take out parts of the process that are inefficient or not needed.”
Morgan views these trends as an evolution, but the key to getting the most out of these tools is integration. “If we can connect those systems and allow them to communicate to generate better forecasts, then the human element no longer becomes the keyboard,” she said. “It becomes reviewing what the system has generated, approving or adding some additional context.”
Powers is particularly excited about these applications in his industry. “Say someone walks into our Anchorage or Fairbanks location off an oil rig in the north slope of Alaska with a broken hose and fitting or something that needs to be repaired or duplicated. Imagine saying, ‘This is the hose I’m using, the materials, the size and the application,’ and the AI uses a power rules engine to produce a one-page spec sheet of an assembly for that customer.”
AI Autonomy vs. a Toolbelt Tool
There are as many predictions about what AI will do as there are internet cat videos. The question in distribution is: Will these tools eventually bring autonomy to work, or will AI always be a tool in the toolbelt of marketing and sales reps?
“My standpoint is that AI should help,” Morgan said. “It should improve the lives of people, users and workers. I don’t know that it will ever completely replace the human element. If it does, that’s almost scary. There must be oversight and governance. It’s a key piece in our AI journey.”
Aufdembrink agreed. “It’s certainly an area that gets a lot of press when you talk about AI. I like AI as more of a copilot, where a human is doing their job with a reliable source of information ready to help make that job as efficient and as easy as possible. I think that’s probably where most companies will see the benefit around AI for the next few years.”
There is still value in tribal knowledge, Powers said.
Using AI for Competitive Advantage
AI is helping forge new partnerships. Heller believes the rapid evolution of these tools will increase the need for technologists to join strategy sessions.
At the same time, marketing and sales leaders must be better technologists to leverage these powerful tools. Could these new partnerships create a competitive advantage by combining technological expertise with people who understand customers, sales and marketing practices?
“The real answer is we need visionary leaders who see where the business models should go,” Aufdembrink said. “And once we’ve got that defined, bring in the right technologists to surround them with the tools that will help us get there. The interesting thing about today’s technologies is that you can build one if you can’t find one. No matter what you come up with, if it’s the right business model for the company and the industry, we can probably get the right technologies to deploy to help get there.”
Morgan thinks competitive advantage will evolve through better sales processes. “I believe that AI will allow us to have deeper insights into customer needs and that bringing the right people together to discuss new data will generate revolutionary ideas. Fast forward two to three decades from now, where AI is ubiquitous, the playing field is level again. Competitive advantage will come down to the people in the room and their ideas.”
Skills for the Future
In Morgan’s brave new world of omnipresent AI, what essential skills and competencies will distribution sales and marketing teams need to collaborate effectively?
That will depend on “what can AI do and not do?”
“Focus on the areas where AI cannot replace you,” she said. “But on the AI side, understanding the technology will be important. There’s a generational shift happening in distribution right now. Just because of the nature of the employee market, we’re seeing younger people come in. For those digital natives, new technology is less of a hurdle. They understand the value; it’s just a matter of harnessing and focusing it on the appropriate place within the business to get the best value.”
For existing employees, upskilling and reskilling to prepare for AI is essential. “It’s not just IT driving technology adoption,” Aufdembrink said. “Some folks sat at home and did the Coursera and edX classes on AI. They can write Python scripting and do impressive things. So, encourage that. Don’t build any walls in the organization. Over the next few years, there will be so much AI in our homes and daily lives that people will seamlessly understand how to use and integrate it. Folks are going to be experts at this, and they’re going to bring it to us.”
Powers agreed. “In our organization, we had an inside sales rep (who helped with) a project to start leveraging Power BI and Power Automate through the Microsoft 365 system. The inside sales rep completely flourished when it came to managing data and creating workflows to handle all the online ordering with automated notifications. It’s been powerful.”