Since leading distributors bought their first mainframes 60+ years ago, B2B wholesale has been a systems and data-driven industry. The technology stacks have gotten vastly more sophisticated over the decades, driven by advances in foundational technologies.
Every year, new semiconductors (computer chips) process data faster than their predecessors. The potential for “quantum computing” holds the promise that future gains in speed will accelerate. The cost of memory has dropped dramatically, making it vastly cheaper than ever to store enormous amounts of data.
And 5G technology is 10X faster than 4G, enabling mobile devices to exchange data wirelessly at rates approaching wired connections. Distributors must continue to invest in and enhance their talent and capabilities in a growing number of technologies — because customer requirements continue to become more demanding.
This evolution in foundational computing capabilities has driven multiple generations of radically different IT infrastructures, from the mainframes of the late 1950s to the cloud computing infrastructure that has become prominent today.
These relentless advances in the foundational technologies have not only enabled rapid advances in IT architectures. They have also resulted in the creation of entirely new types of technology, including:
Artificial Intelligence. While AI has been around since the 1950s, it’s only been in the last decade that advances in processing speed, declines in storage costs and increases in rates of data exchange have brought it into the mainstream. The defining characteristic of AI systems is that they “learn” — they improve at their tasks on their own without human intervention.
Internet of Things. Current architecture and technology have enabled many companies, including distributors, to connect devices and machines to their architectures — such as warehouse robots, vending machines, delivery drones and more. Some of these also rely on AI.
Blockchain. This breakthrough, but complex, technology acts as a “virtual ledger” that allows for super-efficient, accurate, trustworthy and comprehensive reporting between trading partners.
Creating state-of-the-art technology stacks and ensuring they have true experts on board will help distributors figure out how to develop better — or, at least, differentiated — value propositions than non-traditional players. But it’s a tough challenge to keep up with the dizzying array of technology innovations.
We recommend distributors focus on getting their core technology stacks right so they provide solid foundations for adding on enhanced and emerging components. It’s more important than ever to plan; voice ordering and item identification, for example, may seem futuristic, but leading competitors are already implementing those technologies and it takes years to build the underlying capabilities like advanced product data and AI systems.
Technology has emerged from the “back of the house” for distributors and is now essential for providing information, experiences and value customers demand. Those demands will continue to escalate, and only those distributors who understand what’s coming next and have the expertise to act on that information will thrive in the future.
Get an in-depth look at both core and emerging technologies for distributors, and how to evaluate them, in our recent report, published by NAW: Emerging and Traditional Technology Requirements
Ian Heller is the Founder and Chief Strategist for Distribution Strategy Group. He has more than 30 years of experience executing marketing and e-business strategy in the wholesale distribution industry, starting as a truck unloader at a Grainger branch while in college. He’s since held executive roles at GE Capital, Corporate Express, Newark Electronics and HD Supply. Ian has written and spoken extensively on the impact of digital disruption on distributors, and would love to start that conversation with you, your team or group. Reach out today at iheller@distributionstrategy.com.