AI: Distribution, Logistics & Marketing Redefined

AI and tech are revolutionising a lot of our daily lives. There is not a single part of any individual’s existence which has not been impacted by the onslaught of technology.

This article wishes to touch upon the impact of technology and AI on the world of distribution, logistics and marketing. These key functions are undergoing a transformation to meet the challenges and opportunities presented by the rapidly evolving digital age. No matter how important, well-known or successful a brand or product category may be, the functions of distribution, logistics and marketing play a hugely critical role in making brands what they wish to become.

Of late, I have had the opportunity to do a feasibility assessment for a couple of large distribution houses looking at the possibility of relocation. Interesting to see that really good distributors are learning to adapt to changing consumer behaviours in order to stay relevant in the new normal. Technology, and now AI, are going to come in handy to proactively identify market shifts and respond with agility. The really good names have already embraced technology to provide a seamless online buying experience that meets the expectations of buyers, who now have high standards influenced by B2C shopping experiences.

Distribution networks actually involve careful planning and organising of the entire network responsible for moving any product from a manufacturer to the end consumer. This process is a crucial element of supply chain management, focusing on determining the best setup of facilities like warehouses, distribution centres and transportation routes. The main goal is to efficiently deliver products to the right locations at the right times while maintaining a balance between cost-effectiveness and service levels. This entire process helps in building the reputation of any brand. Brands need to be extremely cognisant of this. Good companies are shifting more and more to cloud-based ERP systems, with the cloud proving highly accessible, particularly for SMEs. This flexibility allows a choice between fully cloud-based or hybrid models, offering smaller companies advanced technologies through user-friendly apps and cross-platform capabilities. Another area gaining traction is Mobile ERP. This improves alignment with cloud-based ERP, providing businesses with anytime, anywhere access to business insights. 

This eliminates the dependence on in-house computers, offering real-time visibility and intelligent dashboards for better-informed decision-making. However, having high-quality data is no longer enough.  Distributors have realised that they must adopt a sense-making approach to help buyers navigate the overwhelming amount of information available. 

ERP systems now integrate advanced technologies like AI and ML, providing more accurate data analytics. Vendors integrating AI into their technology stacks offer cost-effective and operationally focused solutions. Distributors who are cost-conscious and whom I have spoken to, are already closely monitoring AI developments to stay competitive and efficient in an evolving technological landscape.

Technology is revolutionising logistics. Take robotic picking order systems, for example—they use technology to recognise and efficiently arrange objects to more efficiently fulfill orders. I have studied Autonomous Mobile Robots (AMRs). They are a game-changer. They navigate facilities, making decisions independently without predefined routes, thanks to AI and machine learning.

AI is also making planning better. AI has begun preventing stock-outs and lowering costs across the entire supply chain by improving demand forecasting. Real-time automation therefore is going to be a game-changer for the warehouses of the future. It is a matter of time when one will see drones flying around, and robots handling the picking, packing, and sorting of items. Human interaction will be minimal. 

In all of this, the role of matching the right marketing strategies to successful business goals cannot be overstated. 

Distributors across various industries are discovering the transformative potential of marketing to reach, engage, and captivate their audience.  For the sake of better clarity, in the distribution space, one would like to broadly categorise marketing as either Inbound or Outbound. Let us briefly understand what each means:

Inbound marketing -  businesses focus on attracting and engaging potential customers through the creation and spreading of informative, relevant and valuable content. Inbound marketing involves content marketing, search engine optimisation (SEO), social media to draw in our targeted audience, build brand awareness, and establish long-term connect with customers. The key principle is to increase customer engagement, trust, and loyalty.

Outbound marketing - a traditional marketing approach. Business initiates and pushes promotional messages, advertisements, or content to a broad audience. This method involves reaching out to potential customers, often through mass media channels such as television, radio and print. Outbound marketing is designed more to create brand awareness, generate leads, and get the message in front of a larger audience.

By knowing the importance, benefits, and best practices, modern distribution and logistics facilities will effectively leverage cutting-edge AI technologies to boost their efficiency, better manage operations and minimise costs. AI will also help them in facilitating well-crafted marketing plans to achieve their business goals effectively. The power of AI and technology is just waiting to get unleashed to bring added efficiency to execution, measurement and strategy.

Niranjan Gidwani

Guest Author Former CEO of Eros Group