The National Association of Wholesaler-Distributors (NAW) has found that AI adoption remains at an early stage among US distributors, with most companies yet to move from experimentation to deployment at scale.
The inaugural NAW AI Adoption Index, produced in partnership with business software provider Infor, surveyed 302 respondents, 91.7% of which identified as distributors. Across the six business functions measured, average adoption scores ranged from 0.86 to 1.36 on a 0-4 scale, indicating that adoption remains relatively immature.
Inventory and demand forecasting and customer service are currently the most advanced applications. 38.2% of respondents were piloting or had progressed beyond that stage with AI for inventory and demand forecasting, compared with 37.3% for customer service and 30.5% for pricing and margin optimization.
The research revealed a significant difference by company size. Among distributors with annual revenue above $1 billion, 58.3% had at least one AI application being scaled or fully deployed, compared with 19.4% of businesses with revenue below $50 million.
Evidence of measurable benefits also varied by function. Back-office operations were furthest ahead, with 47.4% of respondents assessing AI’s impact there as moderate or significant. This compared with 25% for forecast accuracy, 24.4% for gross margin, 23.1% for sales per rep and just 13.5% for warehouse efficiency.
NAW also identified a gap between adoption and organizational readiness. Only 32.2% of respondents had a formal AI governance framework in place, while 38.2% had none. Data quality and integration ranked among the top three barriers for 68.1% of respondents, followed by talent and skills at 60.1%.
Budget was less frequently cited as an obstacle, ranking sixth at 27.5%, although investment levels remain relatively low. 59.1% of respondents allocated less than 5% of their IT budgets to AI and analytics. Skills development also appears limited, with more than half providing AI training to 10% or fewer of their staff during the previous year.
Despite the relatively early stage of adoption, 84.6% expect AI investment to increase over the next year. Benchmarking against other distributors was the most requested external resource, while internal staff were the most common source of ideas for new AI applications.
The findings echo an analysis of the AI execution gap in wholesale distribution, to be published shortly in the September issue of OPI. It asserts that while the US is ahead of Europe in AI adoption, progress is concentrated among a relatively small group of leading distributors, with most businesses on both sides of the Atlantic still at the pilot or evaluation stage.
This story was originally published as premium content by our sister publication OPI.
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