Are Food Distributors Missing Out on the Advantages of AI?

In Part 1 of this series, we discussed how foodservice distributors can improve revenue by using AI to optimize the pricing of each product.
In Part 2 we presented a secondary benefit of using AI-driven price optimization for distributors–which is to give back time to sales teams to focus more on sales consultation and providing other services to customers.

The Art of the Sale

Every business understands that having existing customers buy more increases their wallet share and their revenue. To get customers to buy more, the technique of suggestive selling (recommending additional products at the time of the sale) is often employed. Today, customers don’t want generic suggestions, they want you to suggest items they are likely to buy. So, it is personal.

Historically, suggestive selling was an art that the best salespeople could master, spending the time to know their customers and understand their preferences. With a strong understanding of customers and having products committed to memory, salespeople could suggest additional items that made sense to each customer to increase each ticket.

Today, the art of human-driven suggestive selling is gone. It’s been rendered impossible due to the expansion of SKU numbers and the development of omni-channel shopping that has dramatically increased the number of customers served. The combination of large SKU and customer numbers is further complicated by seasonal and regional variations offered. It has become humanly impossible to personalize a suggested item per customer per order. Because of this, distributors know they are leaving money on the table at almost every sale.

What is required for successful product recommendation today is to have all customer data, relevant external data, and the ‘know-how’ of your current and past top performing sales reps—all in one place, analyzed, and digitally available at the time of every sale, in every channel.

This is exactly what AI-driven suggestive selling does. It goes through your sales data, external data, and customer specific data and picks up the best outcomes and finds the hidden patterns that led to those outcomes. It continues to learn patterns and outcomes with incoming data–building agility into your suggestive selling allowing distributors to make personalized product recommendations to each customer even in highly volatile environments.

Every Purchase is Made ‘In Context’

Understanding your customers’ purchasing behaviors is the key ingredient to successful product recommendations, however, sales data is only part of the equation. Selective external data that can provide context to the purchasing environment of each sale is also very important.

Why external data? Because customers change their purchasing patterns due to external factors. This was never more clearly demonstrated than in 2020. Therefore, FSDs must go a step further to effectively recommend products that make sense at that time. External factors such as location specific restrictions, demographics, market activity, and much more, provide context and therefore additional predictive accuracy to each product recommendation. This is the ‘art of the sale’ reimagined through data and AI.

Product Recommender Solutions are a ‘Must Have’

The tech giants like Amazon and the largest, most tech savvy foodservice distributors have figured it out. They have developed product recommender engines that will suggest additional items while a customer is filling their basket. Items that either have been purchased with similar orders or new items they might like based on past purchasing behaviors. Because customers now expect this type of shopping experience, FSDs should acquire the capability to recommend products to their customers at every sale.

But …

It is important to remember that although the events of 2020 accelerated the shift of many B2B customers to online shopping, a significant amount of foodservice distributor customers still preferred to order through a sales rep or at least speak to a sales rep about their orders. What this means is that any AI-driven suggestive selling solution must be omni-channel and equally effective for ‘street sales’ as for online ordering systems. Customers expect consistency, speed, and personalization across channels.

Analytics2Go brings the Power of AI to You, as a Service.

A2Go’s Price-Right AI is a solution that offers the capabilities described in Parts 1-3 in this series by combinging the distributor’s business parameters with customer intelligence, market basket analysis, shelf-life, inventory availability and external data to provide context.

One solution brings price optimization, product recommendations per sale, and personalized bundle suggestions–to foodservice distributors. Price-Right AI customers can use all the features or one feature at a time.

Blog Series on Foodservice DistributionPart 3: The Art of the Sale Reimagined

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