MDM Webinar: Meet the Moment – How Distributors Can Meet and Exceed Evolving Buyer Expectations

Today’s B2B buyers have raised the bar. They demand speed, accuracy and transparency at every step of the purchase process, and expect digital platforms to deliver. With B2B eCommerce now accounting for 24% of U.S. sales and projected to hit almost 28% by 2028, distributors face critical challenges. Disconnected systems, complex pricing models and poor digital experiences erode buyer trust.

Watch now to see PROS expert John Bruno and ADI Global’s John Carberry to explore how eCommerce in distribution can meet the moment. Discover actionable strategies to connect systems, adapt to evolving buyer behaviors and build loyalty through efficient, seamless digital interactions.

Speakers

Full Transcript

Alright. Hello, and welcome everyone to this MDM webcast, which we’ve titled Meet the Moment, How Distributors Can Meet and Exceed Evolving Buyer Expectations, and it is sponsored by PROS.

I’m Mike Hockett. I’m the executive editor of Modern Distribution Management and our website, mdm.com. And I wanna thank you for being here participating in this event. I’m going to serve as your moderator for this program, which is being recorded.

While we do have some slides to show throughout this hour, the vast majority of this webcast will be a discussion. We’re going to take a real deep dive into a topic that has remained top of mind alongside everything happening right now with tariffs, AI, and economic uncertainty, and that is the constant and rapid evolution of customer buying expectations.

B2B buying habits have always been changing ever since ecommerce really started to become widespread in distribution of around twenty years ago, but the pace of those changes has certainly accelerated post twenty twenty.

The demographic shift from baby boomers and Gen Xers to now millennials comprising the majority of b2b buyers has been a sea change in terms of how buyers prefer to buy with a digital first mindset.

Today’s b2b buyers have certainly raised the bar with this. They demand speed, accuracy, consistency, and transparency at every step of the purchase process, They expect digital platforms to deliver like they never have before. With With b2b commerce now accounting for twenty four percent of US sales and projected to hit almost twenty eight percent by twenty twenty eight, distributors face critical challenges among which are disconnected systems, complex pricing models, and poor digital experiences that erode buyer trust.

So to break this all down in today’s discussion, PROS expert John Bruno and ADI Global’s John Carberry will explore how ecommerce and distribution can meet these expectations.

And with that, I’m pleased to introduce John Bruno, who is vice president of strategy at PROS, and John Carberry, who is vice president of global strategic pricing and analytics for ADI Global, which ranks number six on MDM’s twenty twenty five list of top electrical data and security distributors. John Bruno, do you wanna start us off with a brief bio of your role at PROS and where your expert what your expertise covers?

Yeah, absolutely, and thank you for having me today. So again, my name’s John Bruno. I’m Vice President of Strategy at PROS. I’ve been at PROS now for about five and a half years.

I’ve really spent my entire career and dare I say my entire life in B2B sales and commerce. So most recently, prior to PROS, I ran the product organization at a late stage startup the b2b ecommerce space. Spent a number of years prior to that, leading both the b2b sales technology and e commerce research agendas over at Forrester Research. And fun fact, I was born into a b2b distribution family.

My dad ran a paper distribution business in New England growing up. So I don’t think I had much of a choice but to fall in love with b2b.

Well, you have a perfect background for our discussion here today. Over to John Carberry.

Yeah. Sure. Thanks for having me today.

Just like John, I think the vast majority of my career has been in distribution, whether it’s large health care or with ADI Global. I really have a passion for the distribution space.

I’ve held roles in demand planning and supply chain. That’s where I kind of got my analytical feet under me. And then essentially went to business intelligence and advanced analytics, whether it’s ML, AI applications.

And eventually landed in the pricing space. So currently, I own the global pricing team, global pricing processes, as well as our product information management systems and any kind of advanced algorithm that would be used internally or externally within our organization.

And we at MDM have long seen ADI as a digital leader, so it’s great to have, the company represented here.

Alright. So before we dive in, we wanna run a quick poll to get our audience involved right away and get a data point to kind of help set the stage here for this discussion. So I’m gonna ask our producer to launch that poll here.

I’m gonna wait for that for just a second, but it really just asks how much revenue is your business generating online? Or in other words, what percent of your company’s total revenue is coming from online sales? And it’s gonna have some multiple choice options of zero percent, meaning you just don’t have web sales, One to twenty percent, twenty one to forty percent, forty one to sixty, and then more than sixty percent.

So I’m gonna see here if we have that poll ready to go.

Give me one second.

Alright.

Alright. Well, in the meantime, I’m going to cover some housekeeping while while we wait for this poll to launch here. And first of all, we love to get our audience involved in these webcasts. One of the ways we do so is with the poll, but the other way is by encouraging everyone to feel free to submit a question or a comment at any time via the q and a function.

And we plan to we will reserve some time near the end of this hour for a dedicated audience q and a session, but you certainly don’t need to wait until then to ask something. The more questions we get, the merrier. And I think John and John here will be happy to tackle any content question that we can ask here on this topic. So don’t be shy there.

We’d, we’d love to have a good roster of questions to address either throughout the webcast here or later in that hour.

And then also this webcast does serve as a primer for a companion white paper that MDM will publish soon on this same topic. It’s going to package our analysis and some action items for distributors to really raise their ecommerce game. So stay tuned for the release of that. So I think we’re still gonna we’re trying to figure out how to get this poll launched, but we’ll we’ll see if we can get that going.

But in the meantime, John, I’m going to hand things off John Bruno off to you. I keep forgetting that we have multiple Johns here. Alright. We we got the poll figured out.

Alright.

So this should be on every audience’s screen right now. This question asking how much of your revenue is coming from online. So we’re gonna give this we’ll we’ll say twenty seconds or so to finish populating here. But in the meantime, John and John, just any introductory comments about what we expect this discussion to cover?

Yeah, I’ll jump in there. So, you know, for me, one of the things that’s really exciting is getting the chance to partner and see all the work that Otherjohn is doing over at ADI. And I know we’re here to talk about e commerce. And I think one of the things that’s really interesting is kind of going beyond just the core commerce platforms, right? How are supporting business functions better enabling e commerce? How should people start thinking about their technology strategy to offer something more cohesive, to drive conversion, to drive revenue, to drive even margin.

And so I think it’s really, really exciting to have somebody that knows the ins and outs of e commerce, but also approaches it from the angle that John does around his analytical background, and the role that he plays around pricing and product information.

Alright. So we just grabbed the results of this poll here. And again again, you have to consider this as a small sample size, but as we can see, the vast majority or not the vast majority, but over half of our respondents here said that they’re getting between one and twenty percent from ecommerce. I think that tends to be the industry standard. We have a couple that are getting more than sixty and a couple that have no ecommerce presence yet. So a pretty decent distribution of responses here. But John or John, any thoughts on just these initial results of ecommerce percentages here?

Yeah, I mean, like you said, it’s a great distribution and I think it skews towards being fairly earlier is not atypical for the market at large, right? So I think we see probably close to twenty percent being kind of that median point.

Now we’ll talk about it a little bit later on, but I think the buy side of the market is really interested to see that number go up. And so hopefully what we tackle today for you in the conversation is what some of the things that you can do to help drive that number up and deliver the kinds of experiences that your buyers are looking for so they feel comfortable and confident making their purchase decisions.

And I think it just represents the fragmentation of distribution here that we know that, you know, the Granger’s, the MSC’s, you know, some of these very large, very technical savvy distributors, those tend to be the ones north of sixty percent with this, where it’s those mid sized, those independent, those smaller distributors that they’re much more likely in that one to twenty percent range or they might still not have an ecommerce presence. So I don’t think the results here are surprising, but they’re always worth getting an updated look at. We we do plenty of ongoing surveying to get an updated figure of how the industry doing on ecommerce adoption and evolution.

Alright.

So give me one second here. Alright. Well, with that, John, John Bruno, with that, I’m going to hand things off to you here to take the lead and really have us dive into the actionable strategies that connect systems and that allow distributors to adapt to evolving buying behaviors and help build loyalty through efficient, seamless digital interactions. So, John, happy to have you take it away here.

Yeah. If you wanna go to the next slide, I’ll just give everyone a quick overview of PROS. So while it’s a common sounding name, you might not be familiar with who we are or what we do.

So really PROS is the platform that kind of underpins all of your pricing and selling workflows irrespective of what channel you sell through. And we work with a wide variety of audiences, distribution being at the top of that, we also work with manufacturers, service organizations, and interestingly airlines. You might be scratching your head and saying, what do airlines have in common with any of all this? So PROS actually grew up pioneering the world of AI powered dynamic pricing for airlines.

So depending on how you booked your last flight, you’re either welcome or we apologize. But we help airlines all across the globe deliver pricing through all of their sales channels. So we figured what better way to take that knowledge and that know how than to provide that to other organizations that operate in very, very, very dynamic environments, Distributors being really at the core of that, dealing with both the supply side, so what suppliers you’re working with, as well as what end customers you’re working with, when margins can be thin. You know, how are you making sure that you’re implementing the right commercial strategies to drive revenue, to drive margin, really improve that overall business performance.

So we provide a whole suite of capabilities from analyzing and forecasting to marketing offers to generating real time offers that are transactable and helping to close those deals. So little bit of background about PROS. We work with a lot of organizations, a lot of distributors, like we have with John Carberry here over at ADI. So with that, I can pass it over to John to to do a little bit of background about ADI, although you probably know quite a bit about it already.

Yeah. Sure. Thank you. So, yeah, so happy to introduce ADI to to the audience. So, essentially, ADI is the number one distributor for security and low voltage products.

We have essentially in twenty twenty four, dollars four point two billion of revenue. To make up that revenue, it’s about twenty thousand transactions a day, so it’s a high kind of transaction type business.

Since between twenty fifteen and twenty fourteen, we’ve grown at a seven percent CAGR. Right? So it really kind of outperformed most sugars on the market.

We have fifty thousand plus e commerce customers. And with our acquisition of SnapOne last year between adiglobal dot com and snapab dot com, We are the industry leading website an e commerce presence.

And essentially, we have crossed one billion dollars worth of sales going through those websites online. Those websites are AI powered search, real time product availability.

We have enhanced product information, and we have great capabilities like convert to quote, easy in order management, and overall kind of live technical and website support as well.

All right, Mike, if you wanna go to the next slide, I have two overview slides kind of paint the picture in terms of what we’re seeing in the broader e commerce landscape.

So this first one is forecast data that comes from Forrester. So I’ve mentioned a part of my role in the past was leading the B2B e commerce coverage at Forrester. And interestingly, while I was there, we ran the same forecast, only then it went to around twenty twenty three. And at the time, so going back to roughly twenty eighteen or so, we thought that we would expect to see US b to b e commerce sales reach one point eight trillion dollars by twenty twenty three.

Obviously, a couple of things happened during that time. The pandemic happened where, whether we like it or not, everybody shifted to engaging through digital channels. So what actually happened is when twenty twenty three came and went, that number actually surpassed that one point eight trillion number by a good margin, dollars two hundred billion over that.

And so when this forecast was reran, we see B2B e commerce sales by twenty twenty seven eclipsing three trillion dollars, Right? That is great growth. But if you look at it, is it really that kind of hockey stick inflection point that we had expected to see? And I think we we shifted a lot of buyers’ expectations to digital platforms and digital experiences.

However, were they getting everything that they needed in order to make informed purchase decisions and actually go ahead and complete those transactions entirely online, or do they need to engage through other channels?

So if you go to the next slide, it kind of breaks down what that pie kind of looks like.

And so what’s interesting to me about this data is that B2B e commerce is obviously the fastest growing channel in the B2B landscape.

That being said, what also stands out to me in this data is that it’s growing because B2B is growing, right? It’s not actually eating into any of those slices of the pie that are conventionally held by more traditional offline sales, or even EDI. So while it is driving the lion’s share of growth, there’s still something not quite there that is causing a channel shift per se from those traditional channels into digital and self-service. Yeah. And so for me, I think it’s actually a great jumping off point to kind of dive into today’s conversation. So with that, if I kind of think to where we are and how we got here, I remember the days of B2B commerce being little more than an online representation of a product catalog.

Mike, you hit this earlier, but data now shows that B2B buyers have changed. And here’s the staggering data point. According to Forrester, again, seventy one percent of today’s B2B buyers are either millennials or Gen Z.

And their expectations have shifted to embracing self-service through more phases of their buying journey beyond just that discovery and research they used to do.

They want to evaluate, they wanna make more informed decisions, and they wanna purchase in a way that is most convenient for them. In short, they’re looking for more from the vendors they choose to do business with.

So John, really pointing this one to you. How long has e commerce and self-service really been a core pillar of the sales strategy at ADI?

Yeah. So we’re going on over five years on that kind of digital journey.

Again, our our kind of expectation of our organization, right, is to provide the best omnichannel experience to our customers. Right? So if someone wants to purchase a product, right, usually, they’re using our website to inform themselves around the product or or its capabilities or spec sheets.

Again, they can either choose to convert that order online and come pick it up in our stores. They can ship it directly from e commerce to where they need to be. But we’re but we’re really allowing that kind of capabilities to do that product research. And what we see is the vast majority of buyers, whether they buy anywhere within our network, right, is doing that research upfront online and engaging with us digitally first.

And when you think about that buyer journey, you talked a little bit about those five years and how you’ve seen that buyer behavior progressed, right? We had some folks in the poll mentioned that they’re not doing any online sales right now.

And so from going through that discovery process now to transacting, does that that progress actually look like over those five years?

Yeah. So as I mentioned before, so we have kind of two world class websites, right, that are generating a billion dollars of revenue, right, going through those channels. But just because, you know, the revenue is coming through that channel doesn’t mean that it’s not having an advanced impact elsewhere. Right? So again, doing that product research and then coming in and buying in the store, things like that, is generating more revenue overall and just being the just being the distributor that can inform the customer about the product, right, and how it works and what it fits into, and and having that robust kind of catalog and and data of information, it’s allowing the customer, again, to engage us at a different level than they ever could before, before our kind of digital engagement.

Now we just talked a little bit about the growth of B2B commerce. So prior to COVID, we saw that things were starting to heat up, right?

It became so popular that it actually became a coverage area of mine while I was a research analyst, but with it heating up and gaining a lot of popularity and the pandemic only accelerating that, it’s grown, it’s grown a bit, but we talked about how that growth rate hasn’t been that hockey stick. It’s actually been fairly linear. Do you have any perspective that you can share in terms of what you’ve seen as to why growth that some distributors have seen has been really strong while others have been more linear?

Yeah. I think it’s meeting that customer expectation of what that digital experience is, right? So before we kind of started this journey, we had a website like a lot of other distributors, but it might have been a little slow, or they couldn’t do the things that they wanted to do, or they or we couldn’t do the things that they expected from their b to c kind of experience. And we’ve seen is that customers really a high level of engagement and a high world class kind of experience online as they would get in our physical source. And again, they expect that b to c translates into b to b. So things like expected delivery dates, a lot of product content, being able to place my order and convert online. All of that has become part of the expectations.

And if you don’t meet those expectations, you’re not gonna see that growth online, and they’re not gonna engage to the level that you want them to as well.

Well said. And so for me, I I think that the key to unlocking growth really lies in a business’s ability to shorten the time period between buyer intent and buyer action. The way I like to think about it is every buyer needs to get to some level of confidence in their journey to go so far as to select the add to cart button and make a purchase, right?

It starts with understanding product details, comparisons with doing different product options.

You talked about PIM, you talked about availability, product availability is critical as well.

And from our vantage point, I was a little selfishly at PROS, we see that ultimately price plays a major role in making a value determination. So is this the right value for me?

So I think that businesses that are poised to give buyers the information they need when they need it, including pricing, will help get buyers to a level of confidence to see more transactions occur via e commerce.

Maybe a good opportunity to kind of shift gears a little bit and talk a little bit more about pricing.

So if we hold e commerce aside for a second, can you share with the audience a little bit about how the role and relative importance of pricing you see playing in the B2B buying process?

Yeah, of course. So we have one hundred and ten thousand active customers with four hundred and fifty thousand available products. Right? So just the permutation of that, right, is in the billions.

And being able to provide all of the different kind of pricing levels that we need to run the business, whether it’s vendor programs, right, that vendors offer different discounts. If it’s negotiated pricing, list pricing, MSRPs, different currencies. Right? And then now we wanna be able to display fifty products at a time online or more, or have a scroll that allows customers to do that.

We need to be able to deliver and kind of decipher that and make sure that it’s correct, but at speed and scale. So as we’ve kind of digitized a lot of those activities and again, we’re we’re calling for pricing in the upwards of fifty thousand calls per minute. Right? To the system, we need kind of that infrastructure and design behind the scenes to be able to support, you the speed and, again, the correctness and all the different kind of program pricing that’s out there to support our customers’ needs.

Yeah. It kinda reminds me of all the B2B and B2C comparisons, specifically Amazon, right? A lot of people are like, well, they have millions of SKUs and they can deliver all the accurate information and price points as soon as I click. So can’t a B2B organization do it?

And so increasingly, I think that is the expectation. So not only the price, but their price. Right? What’s the price for that specific customer? So as you think about ADI and its pricing strategy, how do you think about that as a lever to better compete in the market? You know, what are some things that you see ADI as being capable of doing that that really set itself apart from its competitors when it comes to pricing?

Yeah. Of course. So, again, even just getting the pricing right, all of those permutations, right, is is extremely hard. So we need to basically use pricing algorithms to help fill in the gaps where we physically can’t review every single item, every single price.

So we have those algorithms obviously aligned to our our company objectives.

For example, we have high growth products, highly competitive products. We have more mature product lines. We have things that are request a quote or or need, like, on demand type pricing. So again, to support all of that, to be able to give a customer the confidence to transact and add to cart, right, and ultimately check out is where, you know, we’ve done very, very well, and we obviously still have more work to do.

Yeah, and so obviously when folks think about pricing, right, there’s a capability involved, but beyond that, there are outcomes that businesses are trying to drive. Some of the outcomes that we see being really popular KPIs for our customers are, how are we improving margin? How are we driving revenue uplift? Or in the cases of e commerce, how are we helping to drive or improve conversion rates?

Can you talk to us a little bit about how you balance those kinds of metrics or or any other objectives that you’re looking to achieve through pricing?

Yeah. It’s definitely certainly a balance, but I think it’s the efficiency of having a a system. Right? If you’re doing it on a spreadsheet, right, and those kind of orientations, you’re never gonna get it right. So simple things like, my cost structure has changed, or a vendor has changed a cost, and pushing that through to market becomes very, very difficult. But when you can do that at speed and measure of the impacts of those things, right, that’s where just simple, like, blocking and tackling are able to execute on, and you’re able to execute on well.

Yeah. No. It makes complete sense. And the way that I I like to think about it is, like, you know, if you give a human a really isolated problem, Right? So for this customer, I wanna sell this product.

And I’m trying to figure out what the right price point is for that, I can figure that out so long as there are no distractions around me And there aren’t, you know, hundreds of thousands of other customers across millions of SKUs and things of that nature.

So I think you really hit the nail on the head in terms of what we see, right? Humans can make good decisions, but when you need to make good decisions at scale, it becomes really difficult without the right technology. I want to shift gears a little bit and talk a little about organization, right? I think we talked about this at the top of the call and your role around pricing and analytics and your responsibility for PIM.

Know, one thing that that wasn’t stated in your title was of ecommerce. So over the years, I’ve worked with a lot of organizations around standing up a digital or e commerce practice, And it looks different organization by organization.

I’ve seen digital teams report up through sales or commercial leaders to create alignment. I’ve seen it report up through IT when system architectures, integrations and data are front and center. And I’ve also seen it report up through marketing when customer acquisition is a top goal.

Lately I’ve seen more mature organizations report up through a C level executive such as the chief revenue or chief digital officer. Can you talk about how e commerce and digital is structured at ADI and your role in collaborating and interfacing with that team.

Yeah. Sure. So at ADI, everything digital rolls up into our chief experience officer, and he’s got the full support of the global leadership team. So as we’ve kind of built this organization, Right?

It’s kind of a standalone entity within the organization. Obviously, we’re supported by, you know, multiple groups around the company. But being our own kind of group really allows us to kind of design our destiny and move quickly. Right?

If you’re part of, like, a legacy IT, you know, organization, we might not be able to move as quickly and things like that. But within our organization, we have, like, our product experience management team, our analytics team is part of it, DX development. So, again, we’re building our own road map with product digital product managers and obviously developing those functions and everything kinda comes in from our customer feedback. So everything is kind of one giant loop.

Right? We get feedback from the customer that I’d like to do this or you’re lacking in these capabilities, Building those as as products or functions within our organization and then executing it through is all done within kind of a single group.

Awesome. And when I’m working with a lot of folks that are maybe earlier on in their digital journey, right? They have a tendency of thinking about pricing as an afterthought. You know, pricing gets done somewhere and there’s a record somewhere. And when it comes time to kind of putting the offer in front of the customer in that digital medium, I’m gonna go get that price.

Do you have any advice for how those commerce leaders should think about pricing, and more importantly, how they should think about interacting with that person or that team that owns pricing in their organization?

Yeah. So pricing definitely is is a difficult practice and discipline to be part of. Right? Because you’re balancing objectives, you’re balancing customer needs, you’re you’re balancing sales organization as well.

So as they they look, they you always need kind of a a really disciplined approach. Right?

Using analysis and really understanding, like, what what is going on under the hood. What’s good about a digital journey is now you have way more datasets than you ever had. Right?

Yes. The datasets from my sales team around, like, feedback and things like that is extremely valuable. But now I can look at conversion rates, page views, abandoned carts. Right? All of kind of that data now informs pricing strategy.

Essentially, once we’re fully engaged around the organization, all the different teams combined with all the data, that’s where kind of that perspective of what we do and how we approach the market really begins to form.

Yeah, and maybe if we shift gears and look at it from the other side of things, we just talked about how e commerce leaders can go to their pricing counterparts, but what about organizations where, you know, you have pricing leaders that are just used to being heads down doing their work and trusting that someone will come get the data from them. How can they create more visibility for their role? How can they be a better partner to these These digital leaders.

Yes. So I think the the main thing, right, is really understanding how important that discipline is. Right? Because you could really hurt the revenue of an organization.

You could really help the revenue of an organization. You could tank profitability. You could increase profitability. But they’re all levers that are based on whatever strategy is going on for the organization.

So really, they should be engaging cross functionally. They should be engaging with their digital counterparts because, again, what you present online is you know, a reflection on your business. Right? Even more so than someone that coming into the stores.

So that always needs to be a good positive experience to your customers, and you need to meet their expectations.

And earlier you had mentioned kind of the with this advent of digital, there’s more data, there’s more signals.

Clearly ADI has found a way to build out a really well orchestrated landscape of solutions to power its digital business.

Can you talk us through a little bit about how ADI goes about identifying what the right solutions are to invest you know, across that landscape?

Yeah. Of course. Yeah. So I think the first thing that we do, right, is always kind of ask our customers.

Right? That’s kinda where we start. And We say, like, hey. What where where are we doing well, and where are we doing negatively?

So if we’re gonna engage with a a third party or a solution, it usually starts with with that customer feedback. And generally, we’re looking cross functionally, working with different departments to understand what are the needs or capability we need to kinda bring in. So for example, maybe we need to improve our search.

From there, we kind of gather those feedback, and we gather those requirements around what do we actually want it to do. And then some of the most important pieces are, you know, kind of lastly is, like, what what does the the landscape of third parties look like? Do we wanna do it internally? Is it something that we have capabilities to do?

Or is it something that we need, you know, an industry expert to help us kind of get to the finish line?

Once we get to that point, then, finally, we would start to engage. And what we kind of look for when we do engage with those third parties is, what are their capabilities today, What is kind of their vision for the future? We wanna engage with with companies that really have a, you know, growth mindset. They also have kind of a Mindset for the future, we wanna grow with them. Right? So if we’re gonna make an investment, bring a technology in, we wanna make sure that it’s a strategic partner that we can have over multiple years. And then what we’re investing in is obviously gonna meet our customer needs in two years, in three years, in five years, without maybe having to switch that technology out or platform.

Great. Actually, you kind of hit on where I wanted to go next, which is I think where we’re all going the future. So when it comes time to think about b2b commerce, I like to think about the destination as actually being the journey, not the endpoint, right? So there’s so much disruption, there’s so much innovation taking place. And I think the best measure of future success comes from past learnings. So B2B commerce today looks radically different than it did five to ten years ago.

And while not one hundred percent confident, I’m very close to it. I think we can safely say that B2B commerce will also look radically different five to ten years from now.

And I think ADI is a great example of what innovation and disruption can look like.

What do you see as opportunities for ADI in the future? And, where do you think this next phase of b2b e commerce is going to go?

Yeah. It’s definitely gonna be interesting. Obviously, AI and different tools are really kinda changing a lot of things very, very quickly. I think, you know, this is my personal perspective.

I think that’ll change b to c first, and then it will come to b to b. You know, it’s kind of the normal cycle. So I think we’ll see a lot of A lot of different kind of activities going on in agentic shopping and things like that. So, again, as we’re looking at our current experience, right, how do we prepare for that future of whatever it may may be?

Again, we think we have the organizational structure and design behind the scenes to be able to be flexible and nimble to those changes. But, again, we wanna consult with third parties, with NBM, other, you know, tanks out there around what does that look like in three to five years, and are we prepared for whatever’s coming in the in the near or long term future? And again, our customers are gonna expect that we’re able to deliver on whatever those changes will be if they accept those changes. So we need to be able to bring solutions to market quickly in in a a in an agile fashion, essentially.

Yeah. I think you’re absolutely right. You know, b two c tends to to lead the charge with maybe more disruptive innovation or experimentation, I should say.

And for those on the line, if you’re a nerd like me, I would check out what OpenAI did last week.

Increasingly, we’ve seen things like answer engines like ChatGPT and Claude and Perplexity and things of that nature play a greater role in discovery. But what with what OpenAI did last week, they’ve now made those results shoppable.

So they’ve got partnerships with Etsy and things of that nature, and you can actually transact directly from that answer engine experience.

I think both B2C and B2B will, will see significant disruptions in terms of the role that agentic AI plays in purchasing.

So if you wanna stay ahead of those trends, I would do exactly what John said, which is keep an eye or keep a pulse on what’s happening in the B2C side of things.

Before we go ahead and kind of open up for q and a from the audience, last topic that I wanted to cover is change management. Right? You can’t do any of this without proper change management. So e commerce in general, it’s not a technical strategy. There’s technology involved, but it’s a business strategy. It’s a business strategy that requires a lot of buy in, alignment and shared goals.

And given the success that ADI has had so far, I feel like you’ve had to exercise change management skills quite often. I’m sure there are folks in the audience here wondering how to champion change within their organizations. You share a little bit about how you’ve identified opportunities and and been a part of the team selling those opportunities up the chain as part of a broader strategy?

Yeah. So I think the the biggest thing is starting with your customer. Right? And we we get the voice of our customer through feedback surveys, roundtables, focus groups, everything you can imagine.

And it’s basically that the change in the organization, right, needs to change to what your customer expects. And if you can’t deliver on what your customer wants, right, you’re probably not in the right organization, or that organization’s not gonna be around, you know, for a long time.

The things the speed at which things are kinda transforming, right, you have to keep up and make sure that you are able to deliver on those. And, again, the keeping kind of steady state with what’s happening in the industry and and really pushing that forward are the ones that are gonna win. So if you’re not adopting those technologies, if you’re not listening to what your customer wants and the last example you just made, you know, if my customer wants to shop through OpenAI and and be able to, you know, check out in the b to c world, and the expectation is that we’ll be in b to b, The companies that are able to do that, right, and deliver on that, and deliver to those expectations of their customers will be the ones that are are going to win.

So championing that change within the organization, as long as you have that customer lens, right, and you have the data that says, like, this is what our customers are asking for, and our customers are great, and they’ll let us know.

That should just overwhelm the direction of where the company needs to go. And we’ve been fortunate that we have a global leadership team and a parent company that has completely been aligned to that vision and what we wanted to do, and again, what our customers wanted. That’s how we’ve been able to really get that change in and and build these capabilities that we have.

Yeah. Definitely, data helps make, the conviction in kind of the compelling action a lot easier to sell. And so clearly you’ve been successful in starting with that customer feedback and seeing the e commerce growth as a result of that, Has that changed the way that ADI leaders think about e commerce or think about pricing as well? Like you’ve sold that up. And now that it’s been successful, are they going to you guys with with different questions or looking for more insights or more opportunity?

Yeah. So I think it’s kind of changed a little bit. Right? So in the beginning, it was, oh, you wanna take revenue that was going through the stores or through a salesperson, right, and move it online, right?

And, really, you know, through our actions, we’ve proven that that’s that’s not the case, and that’s not even what our customer wants. Right? We want, basically wherever the customer wants to transact with us, we want them to come, right? And essentially, it wasn’t, hey, I wanna take all revenue and move it digitally.

Right? It’s no. I wanna transact with my customer however they want. So that mentality, right, in the beginning is kind of like the the storm and the norm and and kind of getting used to that change management.

Now they just see it as a larger driver to the overall business. So as a sales rep, I’m getting more sales, I’m getting more commissions no matter where it goes through in the organization. And the e commerce and the digital teams, right, can help me in my goals to get there faster.

Awesome.

Well, that that’s yeah. That’s a fantastic discussion. I even have a couple of my own questions that I’d love to get your thoughts on, John Carberry. But, really, a couple that as we transition here into the q and a portion, I think this for either of the Johns here, it’s impossible to have this discussion without addressing Amazon and the Amazon effect that it has on customer buying behavior.

We talked about how the the bet or at least the majority of b to b buyers now are millennials moving into Gen z. And these are people like myself that have grown up buying on Amazon for, you know, more than a decade now. It’s just the way that we shop. It’s kind of the it’s always seen as the default, for b to c ecommerce.

There’s a lot of other big players that have have joined that game now, but I’m curious on how difficult it is to for distributors to watch what Amazon is doing with what it’s offering, b to c customers and how they can buy and wanting to emulate some things that Amazon’s doing while also knowing that you can’t be Amazon. You can’t out Amazon that company. So I guess just curious that conundrum of trying to emulate what b to c customers experience like with Amazon in distribution while not trying to eat the elephant and be the everything to everyone. Just does anyone wanna address that challenge there of doing what you can while staying within your limitations?

Yeah. I can adjust that a little bit. So it kind of what I was mentioning before. Right? So that that b to c experience, right, is expected in the b to b world. So you always have to strive to give the best experience, right, even though maybe you might not be able to get to the Amazon level.

Need to see what is important to the customer. Right? So our customer base wants to find product. They wanna find it fast.

They wanna find good information on that product to inform their decision, and they want an easy, quick way to purchase the product. So as we do it, maybe we won’t have all the bells and whistles that an Amazon has, but the core experience of what they expect in that experience, right, that’s where we’re focusing on. Can they find it? Can they find relevant information?

And can they get a seamless kind of checkout process?

Yeah. And just to add to that, you know, we’ve done a lot of research looking at what makes a b to b experience a great experience, and it really boils down to three key components.

Ease, effectiveness, and trust. So how simple and streamlined was the process?

Was I able to complete what I set out to complete?

And was the company I was working with providing trustworthy information that helped me make a better purchasing decision? And I’ll tell one little anecdote of a distributor in the MRO space that I did work with years ago, you know, like many, they were fearing the impact that Amazon could have on their business.

But if you looked at the experiences they delivered, they actually delivered a much better experience than Amazon did on that trust factor. One example was they were selling a wireless power drill. And if you actually compare the product details of that power drill on Amazon and on their website, you actually saw a stark contrast, specifically around the dimensions of the drill. Right? Is it gonna fit in the workspace that I’m that I’m working in?

And I was trying to figure out for the life of me why the dimensions were wrong.

Well, the distributor in that case Had more accurate dimensions of the drill because they know how people are gonna use it. What did Amazon have? Well, they had dimensions of the packaging that the drill came in, right? Yeah. So which one of those is more trustworthy for the buyer at the end of the day? So I think there are plenty of opportunities for distributors in particular to outcompete Amazon through that lens of trust.

Yeah. That’s some great perspective there. And yeah, we we we I mean, we talk about ecommerce all the time here on MDM and and how it’s evolving. And, you mentioned how it it hasn’t had that hockey stick evolution, you know, at least in recent the last five years as one might have expected at this time in twenty nineteen or so.

But I think it it also helps show that I think it’s different it’s a very different case by case study for every company. If if you’re just getting into ecommerce and your customers have been pounding at the door asking for it for a while, I think then you might see that hockey stick evolution as far as the how much of your revenue comes from ecommerce. You’re probably gonna see that ramp up right away. Whereas if you’ve been established in ecommerce for a while, unless you’re somehow adding a lot of new customers to that platform pretty substantially, you’re probably only gonna see more of that incremental year over year increase.

But I just remember back to, you know, twenty sixteen, twenty seventeen when I was visiting distributors that that had no ecommerce in place and didn’t have any plans for it in the year ahead. Kinda just asking them why. Like, why isn’t this part of your strategy yet? And they kinda simply said, well, our customers aren’t asking for it yet.

Why should we invest, you know, hundreds of thousands of dollars into an ecommerce platform if it’s not going to really move the needle on our business immediately. We’re not gonna see that immediate ROI. And if I can empathize with those sort of companies, that’s that’s a major investment. It’s a big strategic decision.

But just given how much has transpired since then, kinda wanna ask those same distributors if they regret not getting into ecommerce earlier in the game than than we are now. Yeah. But, again, it it’s a different case for every company out here. MDM is never gonna tell a distributor what to do, but there’s certainly those companies that I just wonder if they would have chosen different investment strategies in hindsight.

Yeah, and Mike, just super quickly, I think even for a lot of the folks in the poll that were around that twenty percent mark of revenue going through e commerce, I do think there’s potential for that hockey stick inflection point, even for them and even folks north of them. And the reason for that is, like, if I can just empathize with a group for one second here, Doing business in a B2B capacity is hard, right? The number of SKUs, the different kinds of target markets you sell into, unique one to one relationships you have with each of your customers, it’s really difficult to represent those commercial and trading relationships accurately everywhere the customer is, right? So the one thing that Amazon makes it easy for, you know, a lot of companies to do is sell products to the masses, right? It’s this one price, it might change frequently, but it’s this one price, you know, for everybody.

And they have all of the infrastructure of one of the world’s largest companies behind them. Whereas a lot of B2B distributors don’t have that luxury, but yet the expectation from the buy side is there. So how do you make sure you’re delivering the right product information? And how do you make sure that you’re delivering either the right price for that customer if you’ve already negotiated it or delivering a price that’s going to drive new customer acquisition and start more of that long lasting relationship. So I think if you’re able to get those two vectors right, you can see a lot of significant growth via e commerce.

And I put this one comment just up here from an anonymous attendee that just they touched on why the hockey stick, you know, e commerce ramp up hasn’t happened. And they kinda just articulate that part of it’s due to distributors wanting to control, you know, how fast that’s growing. They wanna make sure that it’s not just a free for all and kinda letting ecommerce dictate how they’re doing business. So I I do imagine that that does play a factor in there is deliberately kinda controlling how much that is growing. So a worthy point there.

Well, Continuing with the audience questions here, and this can go to either John here, but, or I guess this one’s more directed for ADI. But, so John Carberry, this person asks, what KPIs or success metrics does ADI use to measure its ecommerce performance? I know that, you know, KPIs can look very different for each company as far as what they put more weight on, but can you touch on how ADI is kind of vetting that as how its ecommerce is performing?

Yes. Sure. I mean, we look at most of the common KPIs, right, amount of revenue online, conversion percent, all of that good stuff. But I’d say the things that we’re probably most proud of is really the engagement.

Right? So how much is a customer engaging? Right? And like I said before, we we see the vast majority of customers are engaging digitally, getting product information, doing research.

And then again, they might purchase in a store. That’s something that might not come through the KPIs outside of that engagement metric, But, essentially That’s a KPI we’re most proud of. Right? Which isn’t a direct, like, ROI, technically.

But, again, that’s how they’re choosing to engage with us, and that’s what we wanna see. Yep.

Alright. Then another one here.

I think this can go to either one. What advice would you give to companies that are just starting their digital transformation? I think it’s so easy to think that, you know, we’re here in twenty twenty five that everyone is well along in this journey, but some companies, especially among the independent, those small to midsize distributors, they are a lot of them still kinda early in that journey. They’re only kinda taking baby steps towards really digitizing their business. So I guess either John here, just any advice broadly as far as companies that are really just getting going with their digital transformation, getting it off the ground.

Yeah. I could probably start and then, JonBrune, I can pass it up to you. But, my highest advice would be if you’re going to do it, do it correctly. Because there’s a reflection on you and your brand and what you’re gonna present your company as.

If you’re gonna have a digital experience and the product content is wrong, the pricing is wrong It’s not synchronizing. I have a disjointed omnichannel experience between the way I used to transact versus what I see now on digitally. Right? You’re really gonna lose that trust factor with the customer, and that that above all else is the is the most important thing.

Yeah, and the one thing that I’ll add to that is I actually wanna echo some of the points that John made earlier in the conversation around really listening to what your customers want. It sounds simple and it sounds benign, but it’s incredibly important, even down to the specific journeys they want to go through, Are they going there because they need a one off bespoke quote for a set number of products, or are they a routine customer and they just wanna streamline their routine order entry processes, Right? So what exactly are they looking for in that experience? You don’t need to bowl the ocean all at once.

I’d also recommend maybe starting with some customers that you have a really close relationship with and letting them trial out some of those experiences first before rolling it out to the masses as well.

Good point. And then for John Bruno continuing here, Brian asks if you can give a high level explanation of how PROS integrates with an ERP regarding regarding pricing automation.

Just yeah. Any advice or just any explanation you can have there on the integration?

Yeah. Happy to. And it’s it’s fun given John’s background here also having responsibility for PIM because I like to think about the way PROS handles pricing, very analogous to the way Sorry, the way PROS handles pricing is very analogous to the way lot of PIM providers handle augmentation and enrichment of a product catalog. You know, for many of you, you have core pricing data, cost data in your ERP. And what PROS does is it ingests that information and actually uses some pretty cool technology to do it as well, like generative AI to map even your most esoteric fields in your ERP, into our platform.

So that’s kind of the automation of bringing it in. And then you can do everything from identify different scenarios, identify different strategies, use formulaic approaches or AI approaches to derive pricing. And then PROS can then kind of act as that, I guess transactional system of record for pricing, right? We can publish all of that back to your ERP for invoicing processes, and we can deliver it in real time to any of your sales channels like we’re doing with ADI and helping to power that e commerce experience. So think of it as sitting in the middle, but gathering your kind of authoritative master data and turning that into something that’s truly transactable for each and every transaction.

Yeah.

Okay. And I guess a a tiny bit on that. So I’ve I’ve had the pleasure of doing kind of four separate ERP implementations with pros.

So having that platform, right, and ability to do that, I’d say the biggest piece of having a platform is essentially meeting your customer needs, kind of I mentioned in the beginning of the call.

When you have it, like, in your ERP, you might have limitations, things like that. So if you need a formulaic approach, you need a modeling approach, you need an AI or ML approach, right, Those has kinda given us the ability to do any of those things in multiple ERPs kind of at scale.

Yeah.

And then for John Carberry, I’m curious. I know that ADI just sunsetted its long standing legacy ERP system and transitioned into onto a more modern system. And I think that I even saw, like, Ali Copeland jokingly posted that ADI almost had a day of mourning for that previous ERP that really, you know, it did what it had to do for, you know, decades essentially.

But I’m curious on how you guys just transitioned ERPs. How to what extent did that complicate ADI’s ecommerce operations and customer experience operations? Because there’s a lot of distributors that are probably going through an ERP transition, and my condolences to them. I I know it’s a very difficult process. But just how if you can share, what how that impacted operations at ADI while transitioning.

Yeah. Of course. To give a little background, if you go in our old office in the IT area, you would see awards up on the wall that were given to us back in nineteen ninety for having bleeding edge technology.

We have just, again, sunset that ERP now, which is a homegrown kind of mainframe cold wall system, which I’m sure other distributors may be on as well.

So just transfer off of that right onto more of a modern ERP, it really allows us to be better in the digital space. Right? When you wanted to plug something in, like a microservice or any kind of service, whether it be PROS or name your tool out there, essentially was really hard to do, Right? Because it just wasn’t built for that connectivity. It wasn’t API first, things like that. So kind of moving off that, again, it’s kind of three years of my life and and dedication to the project.

And we finally kinda get getting to the end of that journey, we still have more work to do to to make it better.

But essentially, by doing that, it really enabled us to do everything that we wanna do in the future. And again, our customer as our focus.

Meeting their expectations. We just couldn’t get there with that old legacy system.

And then, I mean, we we have to bring the AI element in here because it’s infused into every piece of technology, in software now. Jerry asked, what are or will be the shortcuts, metadata wise, to grow the e business using AI? So either you wanna grab that one as far as, you know, how is AI going to accelerate growing e business? Just any thoughts there?

Yeah, happy to jump in. So I think there’s a lot of ways. I mean, we we touched upon some of the ways in the future that we might see with things like AI agents.

I do think it is an important time in kind of the the handles of history and technology to kind of understand what different AI technologies are most appropriate for what business problems, So I think most of us are probably regular users of things like ChatGPT. I know it’s replaced the standard search function on on my smartphone that I’ve got at my desk over here. So I use it quite frequently.

But when you look at things like large language models versus, let’s say, existing approaches to AI and ML, such as segmentations or neural networks, much more predictive and prescriptive, Large language models are great for interactions like chat, voice. They’re also great for content creation.

But I think, know, one of the things that that John had mentioned earlier is kind of being near and dear to him is is analytics. Right, When it comes time to numerical models or making very precise recommendations, simulating business outcomes, deriving the right price, those technologies aren’t great for it. Actually, they’re quite bad because they have a tendency to hallucinate. And the ways in which AI is being used, we’ve recently brought to market a couple of years ago a new approach to make those recommendations leveraging neural networks.

So in yesteryear’s world, you had to say, this is the segmentation that I wanna price for, and these are the criteria that I am going to choose to define said segmentation. What we’ve done is we’ve used a neural network approach now, which emulates the way that the human brain works and can draw different connections across different data elements. And now you no longer need to configure all of those segmentations or let’s say reconfigure when something like a pandemic happens, or there’s a tariff adjustment, right? They’re a lot more adaptive and they can look at a lot more attributes.

And so John also mentioned the data that’s flowing in, right?

There’s competitive data. I saw another chat question in the chat too about commodities. Maybe there’s a commodity index that you’re looking at. All of these things can now be seamlessly folded into that one model that’s making all of those recommendations.

I think as we move to the future, there’s a world in which those large language models and agents combine with these predictive and prescriptive approaches as well so that you’re basically telling an agent what you want to derive from an outcome.

And it’s using under the hood a combination of different techniques, including those neural networks to ultimately drive a recommendation and actually complete the process of making that change, you know, in your daily workflows. So I think that the potential is beyond probably what any of us on this call right now can even comprehend, and it’s only going to accelerate.

Yeah.

I we’re almost at the top of the hour, but I do wanna get one more quick question in here because I think it’s important. And it’s about change management that you we already touched on earlier, but handling resistance to the changes needed to introduce these digital tools, It’s never easy. There’s always gonna be people that prefer the way that things had been done or are being done. So for either of you, did you wanna touch on how do you handle resistance to change when introducing these new digital tools that are proven to make life easier and move the needle business wise? How do you handle that resistance to That’s inevitable.

Yeah. The the biggest thing I I would echo is what what is your customer’s expectation, and what do they want? Right? So if they don’t want to interact with someone face to face or in person or in a store, right, but they wanna be able to go online and see product content, right, and not have to pick up the phone, That should honestly drive the change within your organization and help relieve the resistance. But I believe the fear is around like, what is my job and how does that affect me?

That’s where I said, like, generally, right, it would actually help because now in that sales cycle, the customer’s coming in. They’re already informed about the product. Right? So maybe you can help fill in some of the gaps maybe our product content didn’t have, things like that.

So no matter what, change is gonna come. Right? Because your customer has different expectations. It’s just getting ready for it and making sure that you’re making the right changes for your organization to kinda move it forward.

Yeah. And just to to briefly echo that. Right? I think there’s a level of empathy that comes into play as well. And John, what you mentioned around kind of that that buying process really resonates for me, because one of the areas where I see a lot of resistance in digital is, well, do my salespeople feel like their job is going to become cannibalized?

And the metric that you talked about earlier in terms of engagement is a really important one.

So what if I can free up my sellers to maybe serve a broader book of business from a customer account standpoint because some of their customers are self serving through more of their journey, right?

When you think about digital, it’s a great example of using e commerce as actually a sales tool as opposed to just purely a customer tool, right? There’s something in it for everybody.

Yep. That’s a great point to leave it on. So that’s gonna wrap up our discussion here on this topic of how distributors can meet and exceed evolving buyer expectations. So John and John, I wanna thank you again for lending your time and all your expertise to this event. I think you provided plenty of insights, best practices, and good examples of for our audience to think about, and your different perspectives here have really allowed us to attack this topic from multiple angles.

We have a QR code here on the screen showing where you can scan to connect with both Johns on LinkedIn. Real quick quickly before we sign off, I’d love to have each of you share any final thoughts, parting words for our audience to leave with.

John Bruno and then Carberry, do you wanna just final words here?

Yeah, super quickly. Even if you’re newer to this digital world, not too late to start, right? You had mentioned, Mike, that hockey stick, you can see it really early on. So I would say better late than never.

Start small, experiment. I think you’ll see successes and I think you’ll got lot of tailwinds behind you to grow and evolve. Yep.

Carver?

Yeah. So I’ll echo that it’s never too late. What I will say is that Digital Journey is lot of fun. My team has a great amount of fun. It enables you to be a more nimble and agile organization. So really have fun and and and enjoy that overall journey. And, again, you’ll have products to market quicker, faster, and meet those customer expectations.

That’s great. Well, I wanna mention again that this webcast will be followed by a new MDM white paper on this topic that goes even deeper into these insights, action items, and examples shared here today. So stay tuned for that. And, of course, I wanna thank everyone in our audience for your attendance of this program and the questions that you sent in. Thanks for whether you watch this live or on demand.

Like I mentioned in the intro, we will send an on demand recording link of this program to everyone who registered and signed up for it. You’ll get that within twenty four hours.

So thanks again all around. I hope you learned some valuable insight from this webcast, and this concludes our program. Thanks for watching.

Good

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