The 77-Point Gap: Why Most Distributors' AI Strategy Is Still a PowerPoint Slide

You Told the Board AI Was a Priority, So Did 93% of Your Peers. Only 16% Meant It.

Ninety-three percent of wholesale distribution executives now call AI a strategic priority. That figure comes from a survey of 233 distribution executives, most of them C-suite, run by Distribution Strategy Group (DSG), an industry research firm.

Sixteen percent have actually deployed it across more than one part of the business.

That’s a 77-point gap between what distributors are telling their boards and what’s running in production. DSG calls it the AI execution gap, and it’s the most useful finding in a report full of them, because it isn’t really a story about AI. It’s a story about how a good intention dies between the strategy meeting and the warehouse floor.

It isn’t a budget problem

DSG’s benchmark evaluated more than 300 North American distributors and found 26 that had moved AI past pilots into sustained, measurable production use, with everything from Ingram Micro and W.W. Grainger down to employee-owned regional players. The list spans public giants, family-held companies, and private-equity-backed operators, and DSG’s researchers found AI maturity uncorrelated with revenue, ownership structure, or technology budget.

What separated the 26 from everyone else wasn’t the size of the check they cut a software vendor. It was six operating habits DSG found repeated, almost word for word, across companies that had nothing else in common.

The six habits, translated for a company your size

DSG’s report is written for companies with Grainger’s headcount. Here’s the same six habits scaled down to what a 51-99 employee, family-held distributor can actually do this quarter.

One owner, not a committee. DSG’s researchers found that every company making real progress had a single named executive with budget authority over AI – not a task force. “If you have budget authority, you’re the owner. You’re not a committee,” DSG’s chief operating officer, Brian Hopkins, put it. For a company your size, that’s usually the CFO or the president, and it can be a part-time hat, not a new hire.

Kill the pilot or scale it. The companies on DSG’s list treat a pilot as a temporary experiment with a defined end date, not a permanent home for a promising idea. Pick one process, run it for a defined window, and make the call – scale it or shut it down. Don’t let it live indefinitely in limbo.

Fix the data before you buy the tool. This is the habit DSG’s research found mattered most, and it’s the one covered in depth in Thursday’s follow-up post.

Let it touch more than one department. The compounding advantage in DSG’s research came from AI tools that fed each other – pricing data improving forecasting, forecasting improving purchasing. A single-department pilot caps its own upside by design.

Measure the business outcome, not the tech activity. DSG found the strongest programs were evaluated on the same terms as everything else the business runs on – response time, forecast accuracy, inventory turns – not on how many AI tools got deployed.

Give it more than one quarter. Every company DSG profiled in its top tier had been building the underlying data and process discipline for years before generative AI made headlines. Patience showed up as a real, measurable pattern, not a platitude.

The report says it plainly, and it’s worth repeating in your own words to your own leadership team: a midsize regional distributor can establish one clear owner, clean up its product data, define a couple of metrics tied to service or pricing, and build from there. None of that requires the largest technology budget in the industry. It requires deciding to start.

Where to start

Thursday, we’ll dig into the habit DSG’s research found separates confident AI programs from stalled ones by the widest margin: data quality. If you want a head start on that conversation before then, Joe’s happy to talk through where your own data and systems actually stand today – no pitch, just a look at the gap.

Sources

Every statistic and quotation traces to: Distribution Strategy Group, “The AI Execution Gap: Why Only a Handful of Distributors Are Getting AI Right,” © 2026 Distribution Strategy Group (distributionstrategy.com)