Don Sarno is the senior vice president of digital enterprise for Sonepar, an electrical supplies distributor. In a recent episode of Wholesale Change, he shared how Sonepar is using AI to drive digital innovation and better customer experiences.
Sarno will share more in his session at the Applied AI for Distributors conference in Chicago, June 24-26, 2025. View the agenda.
Ian Heller: What are your responsibilities at Sonepar?
Don Sarno: I am responsible for the digital enterprise of America. That includes Canada, U.S., Mexico, Colombia, Peru, Brazil and Chile. It’s everything from traditional infrastructure, from keeping the lights on to the digital transformation that includes both associate and customer experience.
Heller: Digital transformation has been going on for a while. But technology is moving fast right now in your world. There’s always something new. What do you see as some of the main challenges in digital transformation for distributors?
Sarno: You’re right. In the past four years alone, the pace has increased significantly beyond what we could have imagined. There are three main challenges. The first is tradition. There’s a way we’ve done things forever. It’s a people challenge; how do we get people to want to do things differently?
The second is a technology problem, the challenge is on us. It’s our responsibility as technologists to provide solutions that actually make a difference. All too often we say, “go in or your order online.”
Why, when I could pick up the phone and talk to an expert, send an email to an expert or come to your counter. Why would I want to transform and do business digitally with you? What’s the value? What’s in it for me? We’ve done things the same way for a really long time. Are we bringing technology that adds value and creates differentiated experiences? Or are we just bringing technology?
The third problem is operational. Think about the competitive landscape that we face today. It’s not open the doors from 6:30 a.m. to 4:30 p.m. and then go home. When we think about digital transformation, we have to be able to support that order that comes in at 9 tonight for tomorrow morning.
We have to look hard at our supply chain, from operations in the back office to the warehouse when that order comes in. Does that ticket just sit on a printer somewhere until someone comes in at 6:30 in the morning? If so, that’s a problem, because my truck’s already on the street.
Jonathan Bein: When people think about AI, and we’ve surveyed this in distribution, they focus on efficiency. But what I heard from you was about customer experience. Can you talk about the balance of customer experience vs. efficiency?
Sarno: That’s a good point. Of course, we can’t talk about AI without talking about efficiency. Anything that’s a repetitive task. For example, the act of entering an order from an email. The act of reconciling an invoice for a vendor and getting payment to them. Those are right for AI, but to really drive value to our customers, it’s about differentiation. How can AI provide an experience to our customers that is beyond what they would have expected from our “traditional” model?
Product recommendations are a great example. You might argue that a really good salesperson makes product recommendations. And they should, that’s how we’ve grown up in this industry.
Bein: But an average salesperson will not.
Sarno: An average one is just taking the order and letting AI learn from the rich data of years of business to make those suggestions. That’s where AI is different than traditional models in this space. It’s not limited to the amount of data sources. You don’t have to aggregate data. It can look at the millions and trillions of data points and make smart recommendations. Amazon’s a great example of this. How in the world did a book company become a company that could sell anything? First, they figured out how to sell operationally. Amazon is ridiculously strong. I order something. I get it tonight. It’s crazy. Second, they always know what to suggest to me and my wife. I never check out of Amazon with a single product.
Put AI in front of an average salesperson and make that average salesperson your exceptional salesperson. To your point, Jonathan, differentiate for them. The customer thinks, “I can’t believe you thought of that. You’re right. I do need it.”
How do we create more value in the supply chain through services? Have AI recommend those services.
Bein: What’s interesting is that the use cases you’ve described intersect efficiency and customer experience. Getting that better reconciliation on invoicing reduces errors, creates an efficiency that the customer sees. The order that otherwise would have sat on the printer until the next day turns around tonight — creating a better customer experience.
Sarno: That’s absolutely correct. If we’re more responsive and faster with higher quality, it’s good for the customer.
Heller: Are you integrating new platforms into your workforce, or are you using existing platforms and adding AI to them? We’ve had this conversation come up at our conferences before. Are our distributors going to get AI from custom AI companies, or are they going to get it from their ERP vendors?
Bein: In last year’s conference, we talked about AI-enabled applications. For instance, Epicor, White Cup and Continuum are AI-enabled applications.
Sarno: If you are just starting out on your AI strategy, focus on quick wins. Don’t go it alone. Creating AI is extremely complex and is only as valuable as the algorithm that drives it. Take advantage of AI-enabled systems with third-party solutions that are fit for the purpose. Sonepar is a hybrid approach where we take advantage of those AI-enabled systems.
Bein: When you say don’t go it alone, are you talking about working with other folks in your buying group, associations, vendors and consultants?
Sarno: All of the above. Companies should leverage partners, industry groups and consultants. Microsoft is a key AI partner for us, and smaller distributors should collaborate with peers across industries rather than navigating AI alone.
Heller: Historically, it’s smarter, in my opinion, for distributors to buy technologies than it has been to become technology developers. There are more software options available now than ever. There’s this whole new form of technology called AI. What are your thoughts on make versus buy decisions?
Sarno: The size of the distributor is going to make a huge difference on make vs. buy. If I’m a $250 million distributor, I probably want to make as little as possible and leverage known technology. Of course, Sonepar’s scale has different criteria on make vs. buy.
Bein: Is Sonepar developing its own AI solution for order processing?
Sarno: Yes, we’ve invested in internal development to improve response times for quotes and order entry. While we use OCR technology successfully, it is fragile and requires high transaction volumes to justify the cost. With AI, we’re hoping to reduce the entry barrier, making automation accessible to more customers.
Heller: Does AI change the value relationship between the customer and the distributor, and will it change the value relationship between the manufacturers and customers?
Sarno: Distribution transformation has opened a more direct channel for the customers to the manufacturers. The good news for us as distributors is that very few customers want to deal with 77 manufacturers. They’d rather come to us to get the right mix. Opportunity still exists for distributors. But regarding a one-off or large project order, it increases the risk of that direct relationship.
That is my optimistic response.
If AI is streamlining things, making it easier for the manufacturer to work with the customer directly, it’s removing that barrier to entry. This is a Don-ism, not fact; but my view is that manufacturers today would be perfectly happy to own the customer relationship.
My pessimistic response is that AI gives manufacturers a channel where we are no longer the experts, and they go around us. That’s why, in my mind, we have to stop worrying about our traditional competitors and think about nontraditional competitors. AI broadens the nontraditional competitive landscape.
We have to continue to find new ways to add value.
