The Impact of AI for Fastener Distributors

The Impact of AI for Fastener Distributors

Companies like Amazon and Netflix use cutting edge Artificial Intelligence (AI) tools to drive massive growth and disrupt business-to-consumer (B2C) markets. Distributors have been slow to adapt this technology, but change is coming. B2B distributors that leverage the power of AI have the potential to turbocharged revenue and disrupt their own markets. Those that fail to do so will risk getting left behind.

Distributors today must understand what AI is and how it can be used. Broadly speaking, AI is any form of intelligence demonstrated by machines. AI programs analyze aggregated data and perform specific tasks. The more information they have, the more effective they are at their assigned jobs.

Many people benefit from this type of technology without even knowing it. Daily conveniences such as email spam filters, mobile check deposit, and voice recognition are all made possible by AI.

But where AI is useful for individuals, it is something of a kingmaker for businesses. Amazon uses AI to power its recommendation engine, a tool that generates 35% of the giant’s e-commerce revenue. The world’s most popular video game, Fortnite, relied on AI to attract players (250 million of them) and profits ($3 billion in 2018). And Netflix uses AI to keep 148 million paying users hooked on its service.

Amazon, Fortnite, and Netflix are massive by traditional standards, but they are actually not unusual in today’s landscape. AI creates cycles of positive momentum, so when companies employ AI successfully, they grow exponentially. When subscribers watch Netflix shows, for example, the streaming service collects data on viewer preferences, allowing it to refine its recommendations and produce better programming — all of which lead to more viewed shows, more data, and more subscriptions.

The two key takeaways here are that many different businesses — including distributors — can benefit from AI, and that the technology becomes more effective and more accurate when fueled with more data.

AI will positively impact distribution in three key places: at the point of sale, throughout the supply chain, and within internal processes.

First, AI will allow distributors to evolve from order takers into order makers; that is, smart technology will identify patterns in customer purchases to make product and next-action recommendations based on data (this can be very powerful; remember, Amazon’s search recommendations generate 35% of sales revenue).

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