Even in 2021, artificial intelligence (AI) still feels like an emerging technology. Distributors tend to think of AI as an abstract concept rather than a technology that can provide real value for their businesses. To some, AI seems too “magical” to be practical.
But AI-powered applications have become mainstream. And solutions built for distributors have emerged that can catapult them ahead of their competitors.
Adoption remains low, and the issue is a gap in understanding how AI can be beneficial.
Gartner predicts that AI will create $2.9 trillion of business value in 2021. A McKinsey forecast also predicted that frontrunners in AI adoption will increase their cash flow 122% by 2030, while non-adopters will lose 23%.
These are big numbers, and they might not be relatable to your company. Demystifying the value of AI for your own business is the first step.
Start by dispelling three common misconceptions and putting them to rest.
1. AI isn’t practical
Artificial intelligence encompasses a large set of technologies that collect, process and analyze data. Despite the “pie in the sky” thinking surrounding the use of AI, this technology is being used in a variety of practical ways across multiple industries. Consider Amazon. This online giant analyzes searches and purchases to produce nearly spot-on recommendations for other products, which usually end up in our carts.
AI-powered tools are also being used in the tracking and delivery of items every day. They take photos of cargo to identify potential damage. They improve demand-forecasting accuracy. And AI can analyze supplier data and make recommendations based on performance.
For distributors, AI can play an important role in automating a distribution center. AI can alert managers to rotate inventory or promote perishable products to reduce waste. It can also help products get from point A to point B on time, every time.
AI can enable B2B sales teams to sell more by delivering accurate upsell or cross-sell predictions, and alerting sales reps when certain customers need to reorder products or potentially find a substitute item. An AI-powered sales platform built for high-SKU catalogs can tell your team what customers will buy and when they might buy it; which enables your reps to consistently reach out to customers in a timely fashion.
2. AI won’t work in distribution
Artificial intelligence thrives on massive amounts of data — the more data, the more intelligent the solution. Luckily, the distribution industry isn’t short on data. Distributors have multiple channels that generate data – from customer purchases and product information to vendor details, website searches and everything in between. AI takes all the data across these separate silos and centralizes it.
AI connects the dots for distributors. It can generate product recommendations based on the data collected across all of the distributors’ sales channels. Distributors’ customer service teams and sales reps can use these insights to make smarter pitches, and therefore convert more pitches to sales. AI puts your sales and customer service reps in a position to become proactive order makers.
AI also makes sales reps more efficient. AI is poised to transform CRM for distributors. The right AI-enabled solution can help your team streamline sales processes, give managers visibility into the sales pipeline, and ultimately increase conversions and sell more to existing customers. For example, instead of building manual call lists, searching for product information and taking notes, AI can point reps to sales opportunities that most warrant their attention. Conversations can move from “Do you need anything?” to “I noticed you’re buying conduit from us but have never purchased conduit benders. Can I send you some information on a few products?”
3. My data is too messy for AI to work
Not only does AI work best with loads of data, but it also excels at untangling and interpreting messy data. AI makes noisy data usable. It does this through deep learning: when machines can complete tasks that typically require human intelligence. Distributors can stop fearing their messy or duplicate data and, instead, rely on AI to make sense of the information. That’s what it does best.
The Bottom Line
AI can and does benefit distributors and in a very practical way. Your data is one of your most valuable resources. The right tools can help you aggregate your messy siloed data on customers, vendors, products and transactions. AI helps predict the future by looking at the past. Instead of fearing AI, it’s time to adopt it to gain an advantage over your competitors. The sooner you do, the better you’ll be able to get and stay ahead of the competition.