2024 Distribution Technology Trends

Anybody who was paying attention knows what the biggest tech buzzword of 2023 was: AI. Recent innovations in machine learning and large language models led to a breakthrough into mainstream consciousness, as tools like ChatGPT suddenly became omnipresent.  

That breakthrough made stakeholders in just about every industry – including distribution – stop to consider how AI might help their organizations thrive. 

Now that the novelty of AI has worn off a bit, distributors can perhaps look at things with clearer eyes. How are distributors leveraging AI and other technologies to make a practical impact on the bottom line in the coming year? 

A focus on foundational technology 

When looking for technology to invest in, distributors should start at the most logical place: the foundation. We’ve seen how unpredictable the world can be over the past few years, and how those unexpected (and often seismic) shifts can affect the industry. Investing in technology that makes essential business functions more efficient can make your company’s entire foundation sturdier. 

For example, Cloud-based ERP software like Microsoft Dynamics 365 Business Central offers the visibility, accessibility and cross-functional integration that distributors need to take their business into the future. When you can see all your relevant data, anywhere, and then use that data to make decisions across your business, you can stay agile enough to roll with whatever punches the marketplace throws.  

An eye on warehouse automation 

Distributors continue to invest in omnichannel capabilities, which has increased the complexity of their fulfillment operations, requiring a step up to meet these accelerating customer demands. Warehouse automation also remains one of the areas where distributors can reduce long-term costs.  

The advisory firm Interact Analysis predicts that the number of warehouses with mobile robots will increase from 9,000 in 2020 to 53,000 in 2025. For that prediction to hold true, this year should be a big one for warehouse automation adoption, including automated storage and retrieval systems, goods-to-person technologies, pick-to-light systems and AMRs. Distributors are also investing in integrating their back-office warehouse operations for greater visibility.  

Automation can make it possible to scale without increasing staff; it can increase efficiency while reducing errors; and it’s an investment that is certain to pay off in the long run thanks to a significant reduction in operational costs. 

Recognizing the potential for back-office automation 

Dynamics 365 Business Central includes the Power Automate platform, which opens all sorts of possibilities for automated workflows which can be created with low or even no coding knowledge. 

In fact, McKinsey reports that 95% of the value of Cloud technology (like BC) comes from automation and streamlined workflows. That’s why moving to the Cloud is such an important step for distributors looking to grow.  

As MDM reported at the end of 2023, the business case for automation in distribution is clear. Intelligent automation can support sales reps with targeted, data-driven insights. It can increase the average order value through smart recommendations. Its capacity for search makes it easier to find specific items in a distributor’s vast catalog. And it can take processes that may take a human customer service rep hours to complete, such as creating orders, and perform them in a matter of minutes.  

Prioritizing B2B ecommerce 

Online shopping and buying has been dominant in the B2C sector for the better part of this millennium, but distribution has lagged. Then, the pandemic hit, and distributors realized they needed to invest in their digital channels.  

As the Forbes Technology Council put it last year, B2B buyers expect an online shopping experience on par with the ones they have as individual consumers. In 2024, distributors are also investigating how to use AI to support the online experience for their customers. Their goal is to streamline the online shopping and buying process so that they remain customer-focused.  

In addition to more robust capabilities on their own platforms, distributors may also consider building their own online marketplace, or collaborating with other distributors to build a market-specific alternative to Amazon.  

Right now, distributors have a chance to make their value proposition clear: They know their customers’ businesses. But they still need to embrace technology across channels to meet their customers’ unique needs. 

Enavate can help you leverage tech in 2024 

If you’re not sure where to start when it comes to upgrading your company’s tech suite, Enavate can help. Contact one of our experts today to learn how to get the most out of this year’s distribution technology trends.