By Marie-Ann Bailey, SAP
Wholesale distributors have been under pressure to change and adapt for decades. Globalization, digitalization, and the internet in general have forced wholesalers to constantly evolve. For distributors, accessing a powerful technology such as AI is like opening Pandora’s box. Will it bring problems as in the Greek myth, or fuel never-seen-before change for the better?
There’s no doubt that AI already has contributed immensely to business optimization and automation and will be a driving force in future transformations. Many distributors are setting their sight on AI to improve efficiency and profitability. Still, there are concerns about AI’s impact on workers, individual privacy, security, and losing the human connection.
On the path to change, distributors need to make sure they don’t leave people behind. Dehumanizing the industry and displacing people’s jobs are just two of the potential miseries this Pandora’s box holds.
Distributors must find a middle ground of progressing towards industry transformation with the help of AI while keeping people in focus. For example, human-machine collaboration would allow the industry to harness the strengths of both and form a complementary, not competitive, synergy – something that’s been referred to as “a duet, not a duel.”
Wholesale distribution and AI risks
Since the release of OpenAI’s ChatGPT in late 2022, AI has become a household word. This development shows AI’s main differentiator compared to past technical revolutions: the sheer speed at which the technology is evolving.
Harnessing these powers of AI for business optimization is helping distributors evolve and extend their operations. It allows for more accurate forecasts, premium 24/7 customer service, and fast reaction times to disruptions or opportunities.
As impressive as existing use cases are, concerns about the future are a natural by-product of any technological evolution.
- AI is already rapidly altering positions, especially entry-level ones.
- An estimated 40% of employees will need to reskill to compete in a new work environment, according to a study by the IBM Institute for Business Value.
- The fear of many workers is that those who don’t close the skill gap will be left behind. A 2023 report by Goldman Sachs justifies their concerns, showing the technology could replace the equivalent of 300 million full-time jobs.
- And while AI capabilities promise exciting change to distributors, it also poses the risk of hallucinations, bias, and deep fakes.
What AI and humans bring to the table
For AI in wholesale distribution to work, distributors need to step up to ensure they don’t overlook their workers’ worries amid their excitement about the technology. Businesses will never run without people, no matter how much AI redefines their roles.
Sure, AI has some powers that people can’t hope to keep up with — computing capacity and speed to name a few. But vice versa, we have plenty to offer that’s uniquely human and that can’t be artificially recreated.
A company’s people bring creativity, empathy, and trustworthiness to the table – strengths that AI can simulate, but probably never master.
Artificial intelligence excels at mundane and monotonous tasks, sometimes called “3D” – dull, dangerous, and dirty. But it can also run complex analyses that support employees with contextual information.
Take, for instance, a large wholesaler’s sales history containing thousands of complex offers and contracts. In order to suggest relevant products or tailored services, AI can scour an immense load of data concerning past sales and buyer profiles. With advanced algorithms, it can detect patterns that simple rule-based analytics might miss.
The same task that AI completes in a matter of minutes might take a person several hours. What the AI can’t replicate, however, is networking and relationships that allow the salesperson to make that one perfect proposition that wins a sale.
AI the colleague versus competitor
So, what would happen if instead of seeing AI as competitor for our jobs, we began to view it as a colleague? As “someone” who jumps in when we hit a dead end, but whom we simultaneously support with our distinctively human abilities?
Distributors that want to stay relevant with the help of AI and with their employees should consider this: AI and people in collaboration, not competition, may hold the key to unlock your full potential.
You can have the best of both worlds where one excels at the other’s weaknesses, and vice versa. In such a dialogue, AI in wholesale distribution becomes more colleague than tool as it offers easy engagement and more natural exchange.
With this hybrid human-AI collaboration, the salesperson in the previous example can use AI suggestions to save time and simply further refine the results based on their personal experience and creativity.
Keeping hope alive for AI success in wholesale distribution
Like Pandora’s box, once opened there’s no stopping the wave of intelligent technologies and their consequences. AI has already proven to be an unstoppable force of change. Some of these changes might be challenging, but one thing that’s left at the end of Pandora’s myth is hope.
We have hope that despite the potential abuse of AI, the technology will keep evolving towards cybersecurity. We have hope that despite the potential threat of job displacement, AI will be used to complement people in their work, not replace them. Hope that when harnessed as a collaborative force, AI can empower organizations towards a safer, more efficient, and more fulfilling employee experience.
“We’re past the hype and slick generative AI sales pitches,” SAP Chief Marketing and Solutions Officer Julia White wrote in a blog post.
This means that it’s crunch time for wholesale distributors to roll up their sleeves and consider what AI will mean for the future of their businesses.
Breaking the boundaries of wholesale distribution starts HERE.
This story also appears on The Future of Commerce.
