Why Distributors Will See a Positive Impact from AI

Processing vast amounts of data can find patterns in customer behavior or purchasing history.

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Artificial intelligence (AI) is changing the B2B landscape, and distributors are uniquely well-positioned to utilize it. With this technology, businesses can process vast amounts of data to find patterns in customer behavior or purchasing history. By integrating AI into everyday operations, distributors can gain a unique insight into their sales, customers, products and overall operations.

What is AI, and how can it support businesses?

AI is a complex branch of computer science in which models are trained to perform tasks by mimicking human intelligence. For example, AI powers self-driving cars, having learned how to analyze driving cues, predict how other drivers will behave and react to situations in a human-like way. Luckily for distributors, there are no ethical or regulatory concerns to worry about with AI in their business, like with self-driving cars. Distributors can implement AI and benefit from it right away.

Artificial intelligence enables distributors to understand detailed information, produce better customer recommendations and make data-driven decisions. While traditional ERP systems give companies a broad overview of past sales data, AI takes the same data and pinpoints key patterns to predict how customers will buy in the future. Because AI learns over time, it will continuously improve to make more accurate predictions.

A sales rep with a traditional ERP will need to spend a lot of time pouring over analytics to determine which customers to contact and how to help them. On the other hand, a sales rep equipped with AI will have access to detailed customer overviews, including which accounts to call, what products they will most likely buy and what pain points to address. The AI will give sales reps a well-rounded view of each buyer by gathering data from every channel, including inside sales, outside sales, counter sales, customer service and marketing. As a result, sales reps equipped with AI can spend less time manually reviewing information and more time proactively engaging with customers.

The adoption of AI in business is growing. According to a recent McKinsey report, in 2021, 56 percent of surveyed companies reported using AI in at least one function. In 2020, AI adoption was only at 50 percent. Additionally, as a Deloitte study discovered, roughly 66 percent of businesses view AI as โ€œcritical to success.โ€ Companies that utilize AI to transform operations are 1.5 times more likely to attain their goals.

As the demand for new technology grows, distributors finally have access to AI-powered solutions designed specifically for their industry. 

How is AI effective for distributors?

Distributors have a lot of data. Unlike B2C companies, which generally only offer a few hundred (or thousand) SKUs, most distributors have hundreds of thousands of products and years of sales transactions across multiple channels. The more information an AI model has to analyze, the more accurate and intelligent it will be. Because distributors have so much data, they are in a prime position to adopt AI.

There are three main types of artificial intelligence: base AI, machine learning (ML), and deep learning (DL). Deep learning models are the most powerful and can process the most data, both in complexity and quantity. They can easily handle messy data while still achieving high levels of accuracy. Because of this, distributors can get started with data they already have without worrying about sorting through years of information.

Artificial intelligence can support distributors in several ways, including:

  • Supercharging sales reps โ€“ AI arms sales reps with comprehensive overviews of every buyer. This information includes customer buying preferences, purchase histories, similar product recommendations, reorder needs and possible churn risks. Reps can use this information to see which customers to call, when the best time to contact them is and what to say while they are on the phone. This will improve the customer experience while enabling your sales team to be more proactive and productive.

  • Omnichannel capabilities โ€“ Distributors operate across multiple, disconnected sales channels. AI connects customer data from every department, including sales, marketing, customer service and accounting. A central data silo means that an outside sales rep will be able to see the last time their customer contacted support, whether they are overdue on an invoice and what they need to reorder โ€“ all at the touch of a button. By connecting insights from every department, you can enhance all sales channels and boost productivity.

  • Warehouse automation โ€“ AI helps warehouses run efficiently and smoothly by automating manual tasks and eliminating human error. Warehouse fulfillment robots can determine which products to pull from shelves to prepare for shipping, while cloud-based AI systems can automate reorder and invoice processing. AI can even reduce order errors by transitioning teams from paper to voice picking systems. By implementing AI into your warehouse operations, you can ensure customers always have what they need on time.

Although artificial intelligence is projected to create more than $4 trillion in sales and marketing by 2030, only 12% of distributors utilize AI in these departments. AI adoption will not only help you understand your customers, but it will also enable your business to operate more efficiently and intelligently. With deep analytics and sales predictions, you can make data-driven decisions to boost revenue, cut costs and enhance operations. The future is here โ€“ will you take advantage of it?

Benj Cohen is the founder and CEO of Proton.ai.

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