Since Chat GPT and other artificial intelligence (AI) tools started hitting the scene, I have been fascinated with their potential use in the world of distribution. It has been a long time since something has made me this curious. In fact, you could say that I am in awe of the potential. It takes me back to the day I received my first PC, the Apple 2e. Do a little math, folks; that is how old I am.  

I started experimenting with basic programming and spent hours making the computer flash and make sounds. I didn’t know what I had, but I knew it was something. This wonder, without any regard for purpose, is where I find myself today with AI. Granted, I can see some logical applications, but I still feel my experiments and queries are the tip of the iceberg. 

Now, some of you might be thinking, “AI? Isn’t it the thing that’s going to steal our jobs and take over the world?” And while I can’t guarantee that Skynet won’t become self-aware and launch a nuclear attack, I can tell you AI tools can be incredibly useful in wholesale distribution. We must be willing to get past the fear and find our curiosity. 

First, let’s define what we mean by “AI tools.” Artificial intelligence is the simulation of human intelligence in machines programmed to think and learn like humans. In the context of wholesale distribution, AI tools are software programs using machine-learning algorithms to analyze data and make predictions or recommendations. 

Regardless of what the media might have you believe, this is not an overnight phenomenon. Several companies have built machine-learning tools over the past two or three years. Some that come to mind in the distribution space are Proton.ai, Intuilize and SupplyMover. No, I don’t get anything for plugging their names; I like what they are up to. 

AI Software Advantages

One area where AI tools can be particularly helpful is in inventory management. By analyzing sales data, customer demand and other factors, AI tools can predict which products are likely to sell well and which ones are at risk of becoming obsolete. This can help distributors optimize their inventory levels and avoid overstocking or understocking. 

Don’t get me wrong, the replenishment packages in current enterprise resource planning packages have come a long way from the old min/max. However, when compared to AI-powered replenishment tools, it’s like 2D vs. 3D chess. 

Another area where AI tools can be useful is in pricing optimization. They can help distributors set competitive and profitable prices by analyzing market data and customer behavior. For example, they can analyze customer purchase histories to identify patterns and trends and then use the information to recommend pricing strategies that are likely to be effective. 

Most distributors have a biased approach to market pricing. Their judgment gets clouded by the competitive items in their arsenal. Thus, everything is deemed more price-sensitive than it really is. AI tools remove this bias and work squarely on logic, such as our pointy-eared friend on the Enterprise. 

AI tools also can be used to improve customer service. By analyzing customer data, AI tools can identify patterns and trends in customer behavior and preferences, allowing distributors to personalize customer interactions. For example, they can use chatbots to provide customers with quick and helpful answers to common questions or use predictive analytics to anticipate customer needs and offer targeted promotions. 

Some items on our shelves are the best-kept secret to our longest-standing customers. We have evolved but forgot to spread the word. AI-powered customer relationship management solutions can help our salespeople suggest items to fit specific customer profiles. 

When it comes to marketing, AI tools can be particularly useful in analyzing customer data to identify patterns and trends. For example, they can analyze social media activity and website traffic to identify which products or services are generating the most interest and then use the information to recommend targeted marketing campaigns.

Let’s say you’re a wholesale electronics distributor, and you’re looking to launch a marketing campaign for your new line of throwback VHS players. With the help of AI tools, you can analyze customer data to identify which customers are most likely to be interested in VHS players based on factors such as age, location and previous purchase history. 

You can then use the information to target those customers with personalized marketing messages, such as “Hey, Gen X-ers! Rediscover the magic of your favorite ’80s movies with our new line of nostalgic VHS players!”

Of course, you’ll want to ensure your marketing materials are up-to-date and visually appealing. No one wants to see a cheesy ’80s ad with bad graphics and synth music (well, maybe some of us do). However, with the help of AI tools, you can analyze customer preferences and behaviors to identify which design elements and messaging strategies are most effective and then use the information to create marketing materials that really resonate with your target audience.

Of course, like any technology, AI tools aren’t a magic bullet. They require careful implementation and ongoing maintenance to ensure they’re effective. And, as with any tool, it’s important to remember that AI tools are only as good as the data they’re fed. If the data is inaccurate or incomplete, the AI tool’s predictions and recommendations will be similarly flawed.

That being said, I believe that AI tools have the potential to revolutionize the wholesale distribution industry. They can help distributors make more informed decisions, streamline operations, identify new markets and provide better service to customers. And, hey, if they do lead to a robot uprising, at least we can say we were ahead of the curve.

The most important thing is to be curious. No one can tell you exactly how these tools will fit in your business. Experiment and have some fun with this technology. Test the boundaries and work smarter, not harder. Find the balance between what can only be accomplished by the human mind and what would be better left to the machines. 

Before I let you go, you need to ask yourself: Did I write this or leave it in the hands of an AI bot? The world may never know. Remain curious and know that I am always here to help.