The Chinese app bought air time for three commercials during the game and two after. Super Bowl advertising is some of the most expensive of the year. For Super Bowl LVIII, advertisers paid between $6.5 million and $7 million for a 30-second commercial, CNN reported. Individual rates vary, however, depending on when an ad airs during the game and if an individual advertiser purchases multiple commercial spots. A Temu spokesperson declined to comment on how much the retailer spent.

Temu’s Super Bowl commercial featured the tagline “Shop like a billionaire.” In it, the animated protagonist buys a variety of household and apparel products priced under $10. The purchases are a sampling of the low-cost products Temu has become known for. The retailer also partnered with San Francisco 49ers running back Christian McCaffrey to promote $5 million in coupons and credits on Instagram ahead of the game, and an additional $10 million during the game, the spokesperson said.

Pinduoduo owns Temu, which launched in 2022 and isn’t yet reflected in Digital Commerce 360 rankings of the largest online retailers. Pinduoduo operates an app-only marketplace for Chinese consumers. Because it doesn’t operate an ecommerce website, it is not included in Digital Commerce 360’s Asia Database.

Rise of Temu and its Super Bowl ad buys

Temu first gained the spotlight one year ago during the Super Bowl in 2023. 

Last year, the retailer bought two Super Bowl commercials, its first introduction to many U.S. consumers. PDD had launched Temu just a few months earlier, in September 2022.

“Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” PDD said in a statement at the time.

That strategy seems to be working. Temu was the most downloaded app in the U.S. in 2023, and the eighth-most downloaded app in the world, according to analytics firm Sensor Tower. The retailer reached 51 million monthly active users in January, a nearly 300% year-over-year increase.

In May, Temu surpassed rival Shein’s monthly U.S. sales for the first time. In September, a report from Earnest Analytics found that Temu is taking market share from Dollar General and Dollar Tree. Temu is now the No. 4 most-visited retail website in the U.S., behind only Amazon, Walmart, and eBay, The Wall Street Journal reported based on Insider Intelligence research.

Shein Group Ltd. is No. 36 in the Asia Database. Dollar General ranks No. 725 in the 2023 Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. Amazon ranks No. 1, and Walmart ranks No. 2.

Temu’s ad strategy

Temu is spending heavily on advertising, prioritizing customer acquisition. The retailer outspent all advertisers except Amazon on Facebook in Q4 of 2023, Sensor Tower said. Temu grew its ad spending on Facebook 318%, and spending on Instagram grew 101%  year over year in the quarter, the firm said. 

J.P. Morgan estimates Temu will spend $3 billion on marketing in 2024.

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Laura Ramos, vice president and principal analyst, Forrester Research

That’s the advice from Forrester Research in the report, “Predictions 2024: B2B Marketing, Sales, and Product,” by vice president and principal analyst Laura Ramos and other Forrester analysts.

Forrester advises that B2B marketing, sales and product teams “face a turbulent year ahead, full of partner-centered growth and productivity ups as well as demand, technology and regulatory/legal downs.”

It asserts that generative AI may broadly impact all teams across marketing, sales and product, “with a mix of both success and failures” throughout 2024.

But Forrester adds: “Teams that double down on customer analysis and understanding, address buyer preferences, and enrich collaboration with [channel] partners will find the ride exhilarating.”

GenAI tops the B2B challenges

Topping off the challenges ahead is generative AI, which Forrester predicts will sift through customer data for insights that will direct one in five new product launches. But while GenAI will help make 2024 a bumper year for new products, Forrester warns that “thinly customized GenAI content will degrade purchase experience for 70%” of B2B buyers by failing “to demonstrate an understanding of their organization’s business conditions of needs.”

To deepen understanding of B2B buyers, Forrester says “B2B marketers should invest in fresh buyer and customer persona interviews and use the transcripts to guide AI-generated content personalization efforts,” adding: “We anticipate that one-third or fewer will do so, but those who do will see their investment in AI-generated content pay off.

Among its other 2024 predictions, Forrester says half of B2B companies will boost partner ecosystem technology investment. It suggests those companies consider collaboration in such areas as GenAI, co-marketing and partner-led marketplaces.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Thanksgiving Day ecommerce sales set a new record of $5.6 billion in online spending, according to analysis from Adobe Analytics. That sets the stage for the rest of the week, including Black Friday and Cyber Monday. 

Salesforce says U.S. Thanksgiving online sales reached $7.5 billion, and global sales totaled $31.7 billion, each growing 1% over Salesforce’s figures from last year. 

“Cyber Week is off to a strong start as consumers took advantage of strong discounts and continued their shopping plans, virtually,” said Vivek Pandya, lead analyst, Adobe Digital Insights.

Thanksgiving ecommerce results

The $5.6 billion consumers spent online on Thanksgiving according to Adobe is a 5.5% increase over Thanksgiving 2022. The results are more impressive with a longer perspective. Online spending nearly doubled since 2017, when consumers spent $2.87 billion online shopping on Thanksgiving.

Toys were a top shopping category for consumers getting a jump start on holiday presents. Toy sales were up 182% over an average day in October, per Adobe. Discounts on toys reached 28%. Disney Little People, Uno Show No Mercy, Marvel figures, Barbie dolls, and stuffed animals were the most popular toys among Thanksgiving shoppers.

Jewelry sales were also strong, up 126%, along with apparel (124%), electronics (113%) and personal care products (67%). Electronics and computers recorded some of the highest discounts, of 27% and 22%, respectively. Gaming consoles including the Playstation 5, Xbox Series X and Nintendo Switch were all popular. Games for the consoles were also top sellers, Adobe recorded. Call of Duty: Modern Warfare III, Super Mario Bros. Wonder, Super Mario RPG, Hogwarts Legacy, and Mortal Kombat 1 were the top games. Robot vacuums, bluetooth speakers, tablets, workout apparel, and holiday decor rounded out the top seller list. 

The average order value on U.S. Thanksgiving online orders was $119, according to Salesforce. 

Mobile sales ruled Thanksgiving ecommerce

Mobile sales reached an all-time Thanksgiving high this year, according to Adobe Analytics. 59% of all Thanksgiving online sales were made on mobile devices, accounting for $3.3 billion in spending, an increase of 14% year over year. 

Both mobile sales and online sales overall peaked between 9 p.m. and midnight PT, Adobe said.

Online traffic to retail websites grew 6% in the U.S. year over year, according to Salesforce. 82% of that traffic came from mobile devices. Mobile wallet usage also grew, up 44% year over year. Apple Pay drove much of that growth, increasing 47% over 2022. 

Social media ads also drove sales through mobile traffic, according to Salesforce. Social media accounted for 13% of U.S. mobile traffic referrals to retailers.

“Mobile traffic and sales are soaring as people are on the go once again this holiday weekend. Consumers are embracing mobile wallets to break down friction between discovering on social and purchasing on mobile,” Rob Garf, vice president and general manager of retail at Salesforce, said in a statement.

Black Friday predictions

Adobe forecasts Black Friday will have the best deals on TVs, with discounts as deep as 22%. Apparel, appliances, sporting goods, toys and other categories will also be discounted, though Adobe says steeper discounts will come later for these types of purchases.

Black Friday is projected to account for $9.6 billion in online sales, according to Adobe forecasts. That would be a 5.7% increase year over year. 

Meanwhile, Salesforce predicts that BOPIS (buy online, pick up in store) sales will increase on Black Friday as consumers look to avoid shopping in crowded stores. 

Ecommerce fraud prevention vendor Signifyd says holiday sales are 6% higher than this time last year, as of mid-day on Black Friday. 

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Amazon is betting that Prime members will spend heavily on deeply discounted items. It looks to lure web shoppers in with deals that range from seasonal decor starting as low as $6 to invitation-only deals like 60% off 50-inch smart TVs and savings on brand names such as up to 50% off Sony products and 30% off Lego items.

But exactly what Prime members are looking to purchase and how much they will spend will vary widely by age, income, and other factors, says new research from market research company Numerator and industry survey.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. It ranks the 100 largest such marketplaces by 2023 third-party GMV.

Amazon Big Deal Days closely precede holiday sales period

Nearly one-third of all consumers are expected to shop online during Amazon Prime Big Deal Days. While those won’t be as big as the 37% of consumers that shopped and bought this summer during Amazon Prime days, Prime Deal Days will “bring a significant boost to ecommerce sales in general, “with the first day of the sale potentially surpassing Cyber Monday in online shopping,” Numerator says.

Other research firms also suggest that while Amazon Prime Big Deal Days will generate big business for Amazon and other big chain retailers this week, many budget-conscious shoppers will choose to shop later and closer to online retailing’s biggest days: Black Friday and Cyber Monday.

Nearly half (44%) of consumers who plan on shopping during the 2023 winter holiday season say they plan to do so during a preseason sales event like Amazon Prime Big Deal Days, says research firm Mintel.

Shoppers remain budget-conscious

But Black Friday and Cyber Monday remain popular (45%) as consumers’ budget-focused mindset continues, says Mintel.

“Over a quarter (28%) of winter holiday shoppers agree that it is even more critical to shop on Black Friday or Cyber Monday because of inflation/rising prices,” Mintel says. “When asked how inflation impacts their spending, 42% of winter holiday shoppers say they purchase fewer gifts, while a quarter (24%) say they switch to lower-priced retailers.”

Even with Amazon and other retailers pushing big deals and deep discounts this week, consumers may remain more budget-minded than in earlier years, Mintel says. Three in five (59%) consumers who plan to do winter holiday shopping in 2023 say they want to spend the least amount of money possible, says Mintel.

“Consumers will participate more in preseason shopping sales, such as Amazon Prime Day, to take advantage of the deals and discounts,” says Mintel retail and ecommerce analyst Brittany Steiger. “They remain value-conscious and look to spend as little as possible.”

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The online marketplace announced two new features, Buy with Prime Assist, and Buy with Prime Cart.

Buy with Prime Assist allows sellers to offer Amazon customer support for no additional charge. The service gives customers access to a chat feature with Amazon customer service representatives who can answer questions about shipping, current orders and returns. 

Buy with Prime Cart is another feature designed to make off-site purchasing experiences more like the experience on Amazon.com. Previously, Buy with Prime functioned similarly to Amazon’s Buy Now feature, Peter Larsen, Amazon vice president of Buy with Prime and multi-channel fulfillment, said in a blog post. Now, customers can buy multiple items at once, like a traditional online cart, he said.

What is Buy with Prime?

Amazon first launched the tool in April 2022. It allowed retailers to sell products also listed on Amazon from their own websites. Customers checked out using Amazon’s payment system and received orders using the ecommerce giant’s fulfillment network.

Retailers pay Amazon a fee to use the service, which Amazon has not disclosed.

There were about 167 million Prime Members who were eligible to check out using Buy with Prime as of March 2023, according to Consumer Intelligence Research Partners, a Chicago firm that tracks Prime members via consumer surveys.

Why is Amazon expanding Buy with Prime now?

Amazon relies heavily on third-party sellers on its marketplace, which ranks No. 3 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. A majority (63.7%) of GMV in 2022 came from third-party sellers, a figure that’s increasing year over year. 

“As Amazon loses some of its position as the search engine for shopping, it is using other tactics to gain intelligence and maintain market share,” Digital Commerce 360 senior analyst James Risley says.

“Shopify is definitely a threat in terms of providing an alternative for sellers,” Risley says. “More than half of sales on Amazon are from third-party sellers, and if they turn to Shopify instead of Amazon or favor their own Shopify site, Amazon loses out.”

Notably, Amazon recently allowed Shopify merchants to offer Buy with Prime on their Shopify websites.

“Amazon partnering with Shopify is really a test for both of them. Shopify can use the Amazon payment options as a way to make it easier for merchants to get out of the strict Amazon.com ecosystem while not abandoning all of its benefits. Amazon gets to pull a potential competitor a little closer and keep it from threatening its position too much,” Risley says.

Amazon promises seller benefits

The online marketplace shared new data indicating that sellers who use Buy with Prime are better positioned than those that don’t.

Three out of four Buy with Prime purchasers, on average, are new customers to the brand, Amazon said. The tool also led to a 25% increase in conversion, on average, the online marketplace said. 

Other tools from Amazon also have positive impacts on sales. Retailers who added reviews from Amazon to their websites saw an average of 38% in conversion growth. Merchants using Buy with Prime cart reported 15% increase in units sold, on average, after adding the feature. 

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The typical ecommerce basket in East Africa is about 5,242 Kenyan shillings ($36), while a basket settled using a point-of-sale terminal averages 5,117 shillings (about $35), according to Agosta Liko, founder and group chief executive officer of Nairobi-based Pesapal.

The company forecasts East Africa ecommerce basket values will increase by as much as 18% in the next two years.

“It will be driven by growing acceptance among customers and by retailers diversifying to digital products,” Liko said in response to emailed questions.

Africa ecommerce growth

A report by McKinsey & Co. published in September projects East Africa’s payments market, primarily in Kenya and Uganda, to grow at 20% annually until 2025. West Africa, including Nigeria, Ghana and Ivory Coast, is the fastest-growing sub-region at 35%. On the continent, the industry is forecast to reach $40 billion by 2025. That would be up from $16 billion in 2020, according to the management consulting giant.

Other ecommerce payment drivers in East Africa are the travel and hospitality industry, telecommunications companies, utilities and government services, Liko said.

“Public policy continues to enable innovation and even drive adoption through e-government initiatives,” Liko said. “Ecommerce is still fragmented, but COVID-19 kicked this forward by a decade.”

The payments platform began operations in 2009. It offers services to more than 50,000 businesses and people in:

• Kenya
• Rwanda
• Tanzania
• Uganda

Pesapal partners with platforms including Apple Pay, Fitbit Pay and Google Pay, telecommunications companies such as Airtel Africa Plc, MTN Group Ltd., Safaricom Plc, and Tigo by Millicom International Cellular, to enable payments both online or at a physical point-of-sale.

Africa is the world’s fastest-growing smartphone market, and with integration of innovations such as QR codes and near-field communication in phones, changes in its payments landscape are likely to accelerate, Liko said.

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Amazon ranks No. 3 in Digital Commerce 360’s new 2023 Global Online Marketplaces Report, and the annual Prime Day sale draws millions of shoppers. 

Prime Day set a new record

Consumers spent $6.3 billion across U.S. ecommerce on the second day of the sale, according to Adobe Analytics data of 1 trillion visits to U.S. retail sites and 100 million SKUs. That’s up 6.4% year over year. Spending was down slightly from day one of the sales event, which reached $6.4 billion. 

Total sales for the two-day event were $12.7 billion, a new record from Prime Day, per Adobe. That’s an increase of 6.1% over $11.9 billion in sales in 2022. However, it’s below Adobe’s expected growth rate of 9.5%.

Amazon called out the first day of the promotion as its biggest sales day in company history.

Consumers shopped for appliances and home goods

Amazon Prime shoppers focused their spending on items for their homes. Appliance sales were up 52% compared to the average day in June, according to Adobe. Housekeeping supplies and apparel were also popular, up 27% and 24%, respectively. 

“In an event typically dominated by electronics, we instead saw many shoppers stocking up on everyday essentials like pet food or pantry staples,” Numerator analyst Amanda Schoenbauer said in a statement. “It seems many used the event to save on their standard purchases or held off on buying larger-ticket items until the sale came around.” 

Amazon said in a press release that home, fashion, and beauty were top-selling categories. The single best selling product was the Fire TV Stick (3rd Gen) with Alexa Voice Remote.

Data research company Numerator gathered Prime Day information based on more than 98,000 orders, 34,000 buyers and more than 172,000 products. 52% of consumers told Numerator that they held off on buying certain items until they were discounted on Prime Day.

Home goods (28%) and household essentials (26%) were the top categories in Numerator’s data, followed by apparel (24%) and electronics (21%).

Stationery and office supply purchases were up 76%, according to Adobe, as consumers started looking for back-to-school deals.

How Prime Day consumers shopped

The average Prime Day order was $54.05, up slightly from $52.26 in 2022, Numerator found. 65% of households that shopped the sale made at least two separate orders, with an average household spending $155.67. Nearly one in five households (18%) made five or more orders. 

Just under half of orders on July 12, 45%, were made on smartphones, Adobe said. That’s up from 41.5% of orders in 2022. Adobe attributed the increase to growing consumer comfort shopping on mobile devices, and the ease of making impulse purchases.

Buy Now, Pay Later (BNPL) played a much bigger role on Prime Day

On day one of the sale, 6.4% of all orders were made using buy-now-pay-later (BNPL) services, per Adobe. Those orders drove $461 million in revenue, up 19.5% from the first day of the sale in 2022. On July 12, BNPL made up 6.6% of online orders for $466 million in revenue, up 21% year over year. For both days, BNPL was used in 6.5% of orders, generating $927 million in revenue, which is up 20% from 2022.

“For months, consumers have felt the effects of persistent inflation and an uncertain economic environment, and it has pushed shoppers to embrace more flexible ways to manage their spending around the Prime Day event,” Adobe analyst Vivek Pandya said in a statement. “The revenue growth attributed to buy now, pay later is a preview of what we can expect in the months ahead, especially as we near the holiday shopping season.” 

BNPL was used most in the apparel, furniture and electronics categories, Adobe said.

Beyond Amazon

More than half of Prime Day shoppers (54%) compared prices at competitors, many of whom were also holding sales events, according to Numerator. 36% checked Walmart for prices, and 25% consulted Target. 37% of shoppers said they did not look at any other sales.

Consumers that did look beyond Amazon chose curbside pickup in slightly greater numbers than in the past. 20% of orders from retailers that offered the service used it on July 12, up slightly from 19% in 2022, according to Adobe.

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Amazon ranks No. 3 in Digital Commerce 360’s new 2023 Global Online Marketplaces Report, and the annual Prime Day sale draws millions of shoppers. 

Spending and order size grew modestly

July 11 was the biggest ecommerce day of 2023 so far, according to Adobe Analytics data of 1 trillion visits to U.S. retail sites and 100 million SKUs. Adobe says U.S. consumers spent $6.4 billion on the first day of the sale, up 5.96% year over year. That’s only slightly lower growth compared with 2022, which was up 6.1% over 2021, per earlier Adobe data.

Sales growth didn’t meet Adobe’s forecast of 9.5%.

“Prime Day has become one of the biggest ecommerce moments of the year, as consumers latch onto major discounts from a number of different retailers,” said Vivek Pandya, lead analyst at Adobe Digital Insights Vivek Pandya, in a statement. “The record spending so far shows us that consumers are tapping into their inner bargain hunters, stocking up on specific categories such as electronics and apparel while the discounts remain steep.”  

The average order on the first day of Prime Day was $56.64, according to data research company Numerator. That’s up about 6.5% over $53.14 for the same period in 2022. The average household of Prime Day shoppers spent $134 on the first day of the sale, per Numerator, with 20% of households spending over $200.

Consumers focused on appliances, household and grocery products

Appliances led the day, with sales up 37% compared to the daily average in June, Adobe found. Toys, apparel and electronics sales were up 27%, 26%, and 12%, respectively.

Two of the top five products on July 11 were household and grocery products, Numerator found. One Amazon product made the top five list: the Amazon Fire TV stick. This marks a change from previous Prime Days. In 2022, three of the top five items were Amazon brand, and all five were in 2021, according to Numerator.

Home goods was the top category, according to Numerator’s survey of Prime shoppers, with 27% of respondents saying they’d made such purchases. It was closely followed by home essentials (26%) and apparel and shoes (25%). 21% of consumers said they purchased electronics, and 20% shopped for beauty products.

Consumers looked at retailers beyond Amazon

Some of Amazon’s biggest competitors held online sales during Prime Day, and many savvy customers compared prices across retailers. 65% of surveyed shoppers told Numerator that they planned to shop other sales. Target (37%), Walmart (32%), and Costco (20%) were the most popular competitors. Over one-third of shoppers, 35%, did not plan to look beyond Amazon.

However, those competitors didn’t see the same growth as Amazon. Non-Amazon online sales during the first half of the day were down 10% year over year, per technology company Salesforce Inc. Electronics, footwear and furniture were the top categories at non-Amazon retailers in the first half of the day.

Some discounts were down, but consumers didn’t seem to mind

The most significant discounts July 11 on Amazon were electronics (16%), toys (15%), apparel (13%) and computers (10%), according to Adobe. Electronics were available at a much steeper discount than the 6% Adobe recorded in 2022. Computers were also slightly more discounted than last year, compared to 8% off regular prices in 2022.

Prime members were largely pleased with these discounts, according the the Numerator survey. 68% said they were extremely or very satisfied with the deals, and 67% believed deals so far were better or the same as last year. Just 15% said 2023 was worse than 2022, while 19% were unsure.

Discounts were not as promising for shoppers at Amazon’s competitors. The average price discount among non-Amazon retailers is 18%, a 17% decrease from 2022, according to Salesforce. Average prices were up 6% over last year, a sign of continued inflation, per Salesforce.

Better sales could still be coming, though.

“With soft online sales reflecting lackluster online discounts, consumers in the U.S. shouldn’t despair. We anticipate retailers will ratchet up discounts before the end of Prime Day,” Rob Garf, vice president and general manager of retail at Salesforce, said in a statement. 

Not all prices are marked down on Prime Day, though. Last year, Amazon merchants raised prices 3% or more on 13.72% of the top 10,000 selling items on the Amazon marketplace, according to a report from Noogata, an artificial-intelligence data analytics platform for Amazon sellers.

Early sales may have eaten into Prime Day

Many other retailers started sales earlier than Amazon’s official start.

“According to early data from Prime Day in the U.S., it looks like retailers may have beaten Amazon to the punch by running promotions last week,” Rob Garf, vice president and general manager of retail at Salesforce said in a statement.

More retailers held 4th of July promotions than offered site-wide sales to compete with Amazon’s Prime Days on Tuesday, according to a Digital Commerce 360 analysis of the Top 1000.

Amazon held its own pre-Prime Day sales, too. Crocs were the most popular item sold on Amazon during the week of June 26 through July 2, followed by the Kindle Paperwhite and Apple Airpods, according to web traffic measurement firm Similarweb Ltd.

From July 1 to July 8, consumers searched for “portable air conditioners” and “electric bike” more than any other terms on Amazon. Crocs also remained popular, according to Similarweb. Searches for “Roku” and “TV” dominated the electronics category, and the Nintendo Switch was the most searched for video game term.

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Emily Newton

Artificial intelligence has seen rapid growth across many industries. As supply chain leaders seek to become more efficient and resilient, they can no longer afford to overlook this growth. AI forecasting can give distributors the edge they need in this rapidly evolving market.

Data-based decision-making is already a critical driver of success for distributors. Supply chain operations generate considerable amounts of data, providing important insight if organizations can harness it. AI can take this advantage further if distributors learn how to implement it effectively.

How AI Forecasting Helps Distributors

If distributors hope to capitalize on AI fully, they must first understand where it is most useful. With that in mind, here are three areas where AI forecasting can help distributors make smarter decisions.

1 – Predicting Demand

Demand forecasting is the most obvious application of this technology for distributors. Machine learning algorithms can analyze past demand fluctuations to predict similar shifts in the future. Distributors can then adjust inventories in response to prevent stock-outs or surpluses as clients’ demands change.

Carrying costs often account for as much as 30% of total inventory costs, so preventing surplus amid dwindling demand is crucial. However, shortages carry similar gravity, as they can lead to lost business. The key to both issues is adapting to demand changes before they occur — AI provides the necessary insight to enable that adaptation.

Machine learning algorithms excel at spotting subtle patterns in data humans may miss. Consequently, they can accurately identify signs of demand shift before they are noticeable to human analysts. Distributors can then increase stocks of items that will be in demand soon and decrease those that will see less demand.

2 – Optimizing Inventories

Similarly, AI forecasting can help distributors optimize their inventories for greater supply chain efficiency and resiliency. These changes go beyond adjusting stock levels in response to incoming demand. AI can also determine the best inventory storage methods and layouts.

Just as AI tools analyze client ordering data to predict demand shifts, they can analyze warehouse workflows to identify inefficiencies. Algorithms may detect which products see the most demand, or the ones warehouse workers must travel the most to pick and pack. Adjusting to these insights lets distributors move inventory faster and with fewer errors.

A distributor may need to place some products closer to loading bays or reorganize their inventories to make more products easily reachable for workers. Like client demands, ideal layouts may change over time, and AI can predict and suggest these changes, too.

3 – Streamlining Supply Chain Operations

Distributors can use AI forecasting to apply similar benefits to their supply chains as a whole. AI-powered management platforms can integrate with over 100 different apps and services, providing more insight into how each supply chain operation affects the others.

Vendor and 3PL management is one of the most beneficial examples of this analysis. AI can analyze financial data and past timelines from logistics partners and vendors to determine which ones offer the best rates or highest efficiency. With this information, distributors can change 3PLs or vendors to streamline their expenses or shipping times.

As machine learning models analyze more data about past disruptions, they can forecast future challenges, too. That way, AI tools can alert distributors when to expect delays, shortages, or similar obstacles so they can adapt accordingly to mitigate the impact.

AI Forecasting Best Practices

Despite this potential, it is important to remember AI forecasting is just a tool. The extent to which distributors will experience these benefits depends on how well they can use this technology. Consequently, distribution leaders must keep some AI best practices in mind.

First, distributors must recognize AI requires vast amounts of data to work accurately. Consequently, using Internet of Things systems and similar technologies to provide data from across the supply chain is a crucial prerequisite for AI implementation. Because poor-quality information costs organizations $12.9 million annually, distributors must also clean their data before feeding it to AI algorithms.

Distributors must also recognize between 60% to 80% of AI projects fail, most often because of a lack of focus. Before investing in AI forecasting, businesses must identify a specific use case, then determine what data they need to enable that application. Taking a smaller, more focused approach to AI will minimize related expenses and boost the project’s chances of success.

Similarly, distributors should start by using AI in just one area before using it to inform larger decisions across more workflows. Starting small and expanding slowly will help them learn first-hand how to use AI effectively, leading to better returns on investment.

Modern Distributors Need AI Forecasting

The supply chain sector is facing rising obstacles. In the face of increased competition and quickly evolving demands, distributors must become as cost-efficient and agile as possible. To do that, they must capitalize on AI forecasting.

Effective AI implementation will soon become a differentiating factor between top-performing distributors and all the rest. Learning about this technology and how to use it sooner rather than later is critical to future success in the industry.

About the author

Emily Newton is an industrial writer reporting on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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