Leveraging AI in Wholesale and Distribution

Gone are the days when Artificial Intelligence (AI) was a subject confined to academic corridors and tech symposiums. With the advent of platforms like ChatGPT, AI has leaped into the mainstream, sparking conversations in every corner of society. Today, it's a buzzword on the lips of every tech enthusiast, a topic of discussion in every boardroom, and a key focus for organizations eager to understand its transformative potential.

In this new era, "Be disrupted or disrupt" seems to be the theme, especially for small to medium-sized wholesalers and distributors, who often find themselves at a crossroads. The prevalent myth is that AI is a luxury of large corporations, too complex or costly for smaller players. But is this the case?

This blog aims to shatter these misconceptions, illustrating how AI is not just an exclusive tool for the elite but an accessible asset for businesses of all sizes. We will delve into the practical ways in which AI can be harnessed by wholesalers and distributors, regardless of their scale, to enhance their core offerings, optimize operations, and improve profit margins.

AI's Potential: Transformative Use Cases in Wholesale and Distribution

To dig deep into how Artificial Intelligence (AI) can transform the wholesale and distribution industry, it's essential to identify use cases that have the potential to change the way these businesses operate. This exploration is not just about understanding AI's theoretical capabilities but about recognizing its practical applications reshaping industry norms.

Inventory Management

Wholesalers often struggle with inventory management due to challenges in balancing stock levels, predicting demand accurately, and handling the complexities of bulk orders and storage requirements. This can lead to issues such as overstocking, stockouts, and inefficient use of warehouse space. According to this report by Zebra, reducing stock-outs and overstocks can lower your inventory costs by 10%.

Leveraging AI's predictive analytics and machine learning capabilities, wholesalers can gain precise demand forecasting and optimized inventory control, effectively addressing the perennial issues of overstocking and understocking.

The image below shows some of the benefits AI brings to the table.

Benefits of AI in Wholesale & Distribution : Inventory Management
Benefits of AI in Wholesale & Distribution : Inventory Management

Product recommendations

Your salespeople know your customers and their preferences and sell products that interest them. However, human judgment is susceptible to errors and biases, potentially leading to less optimal product suggestions.

In contrast, AI excels in product recommendations by analyzing vast amounts of data to identify patterns and preferences specific to each customer. This data-driven approach minimizes errors and personal biases, ensuring recommendations are tailored and relevant, thus enhancing the customer experience. AI's precision and ability to learn from ongoing interactions make it an invaluable tool for delivering highly personalized and accurate product suggestions.

At WizCommerce, we have developed a proprietary AI product recommendation engine, Wiz AI, that suggests products for salespeople to offer to their customers by analyzing their past purchase data, trends, and more.

With Wiz AI, our clients have experienced a whopping 25% increase in average cart value across each order.

This use case becomes all the more crucial when you are selling online through your storefront, where there are no salespeople to guide your customers.

Marketing & Sales

AI in marketing offers wholesalers unparalleled opportunities for content creation, customer engagement, and more. To better understand these opportunities, let’s delve into specific marketing use cases where AI can significantly elevate the effectiveness of wholesale marketing strategies.

  • Pricing

As with product recommendations, you don't have to rely on your intuitions and experience alone to decide what price points to offer to your customers anymore.

There are treasures hidden in your historical sales data that may be hard to process for humans but not for AI. In fact, according to this report by BCG, AI-based tools can boost EBITDA by 2% to 5% if they are used strategically.

AI can uncover these treasures and give you hidden pricing insights. Equipped with these insights, your sales rep can sell better at price points that are more likely to be accepted by your customers.

Similarly, AI can give you insights on what discounts to offer and when to offer to increase your order value.

  • Content Creation

As more B2B businesses hop online, content becomes king! We're talking fun blogs, catchy product descriptions, cool emails, and awesome images for everything. It's all about giving customers heaps of info to help them choose wisely.

Enter Gen AI platforms: these tech wizards are ready to jazz up the content game, making it super easy and a whole lot of fun!

Gen AIs like ChatGPT can help you create product descriptions in bulk. ChatGPT and Image generation models like Midjourney, can help you create “photoshoot grade” product imagery without hiring a photographer.

In essence, leveraging Gen AI tools like ChatGPT and Midjourney transforms B2B online content creation from a chore into a creative, efficient, and enjoyable activity, elevating your brand's digital presence to new heights.

  • Customer prioritisation

AI has the power to revolutionize the way sales reps prioritize their customers, significantly boosting their efficiency. As the customer base grows, a sales rep can find it challenging to juggle numerous clients, often leading to the neglect of the long tail of customers. AI again comes to the rescue by intelligently analyzing data to identify which customers are most likely to place orders. This enables sales reps to focus their efforts where they're most needed, ensuring that no customer is left behind and every opportunity is maximized.

I don't want to keep mentioning us again and again, but with Wiz AI we helped our clients prioritize which leads to sell.

The impact? 3 out of 4 leads recommended by Wiz AI have proven to be buyers who'd close!

  • Targeted, Hyperpersonalized Marketing

AI is a game-changer for creating targeted, hyper-personalized marketing campaigns, especially for email marketing campaigns. Traditional email blasts often miss the mark due to their generic content and ill-timing.

In contrast, AI enables the crafting of highly personalized emails that hit the sweet spot - showcasing the right products and discounts to each customer. AI can predict the right time to send emails to increase open rates and personalize the email with promotions and discounts, increasing the chances of conversion.

Tools like text.ai take your customer data, including preferences, purchase history, and demographic information, and convert it into hyper-personalized emails that increase conversions.

  • AI Sales Agents

When your customers land on your storefront, there are no salespeople who know them, answer their queries, and drive them to products they want to sell.

Here's where AI Sales bots step in to fill that gap. Acting as virtual sales assistants, these bots can offer personalized experiences to your customers. You can connect these sales bots with your CRM and fetch information about your customers' buying history, wishlist, and more.

Based on this data, it cross-sells, upsells, and recommends products, creating happy returning customers.

Customer Service

If your product isn't the one-of-a-kind type that leaves competitors in the dust, then stellar customer service becomes your secret sauce, superhero cape, and... well, you get the picture.

It's your main competitor advantage as a wholesaler, the thing that sets you apart and keeps customers coming back for more!

Servicing customers is becoming a pricier affair by the day. With competition escalating, margins are feeling the squeeze, making it challenging just to throw more people at the problem. To paint a picture with numbers, employers in the US are planning to give an average 4.6% hike in salaries in 2023 from 4.2% in 2022. The primary causes of the greater anticipated increases, according to employers, are inflationary pressures and the continuous difficulties in attracting and retaining employees.

You can overcome this issue of rising costs by employing AI-powered customer service agents or chatbots. These AI agents trained on your data and previous customer conversations can instantly resolve customer queries, increasing customer satisfaction.

Impact of AI in Wholesale & Distribution : Customer Service
Impact of AI in Wholesale & Distribution : Customer Service

In fact, for Lucy & Yak, 50% of their customer queries were resolved by AI chatbot, allowing their customer service teams to handle more complex and important queries.

Conclusion

Those mentioned above are not an exhaustive list of use cases AI can solve. AI has applications in warehouse automation, predictive maintenance, transportation and logistics optimization, and more.

We have only mentioned the use case, which will create a significant impact for Small and medium wholesalers. And something that they have the means to adopt.

Remember, it's essential to study what use cases will create the most impact for your business and prioritize those. Adopting AI should be a strategic decision focused on accessible and impactful solutions that align with the unique challenges and opportunities of each wholesale business.

Article published by
Divyaanshu Makkar
CEO - WizCommerce
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