The Most Innovative Distributors Aren’t Necessarily the Most High-Tech

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Innovation has become one of the most discussed topics in distribution, but for many companies, the conversation still feels overwhelmingly tied to technology. Even as many organizations remain in the early stages of adoption, Distribution Strategy Group recently found that 97% of distributors say AI is essential to the future of wholesale distribution. Artificial intelligence, automation, robotics and digital transformation initiatives continue to dominate industry conversations as distributors evaluate how to remain competitive in a rapidly evolving environment. Oftentimes, the distributors making the most meaningful operational progress are not necessarily the ones chasing every new technology trend.

Gartner recently projected that half of all new warehouses in developed markets could become robot-centric by 2030, signaling just how quickly operational technology is expected to reshape distribution environments in the years ahead.

Yet innovation is increasingly becoming less about adding more software and more about reducing friction inside the business itself. Distributors are discovering that sustainable modernization starts with simplifying processes, improving visibility, standardizing workflows and creating organizational discipline before layering on new technology investments.

A new CRM platform cannot fix inconsistent sales processes. Automation cannot compensate for inaccurate inventory data. Artificial intelligence tools struggle when product information, customer records and pricing structures remain fragmented across multiple systems.

McKinsey recently reported that while many distributors accelerated digital initiatives during recent supply chain disruptions, data scattered across different systems remained one of the most common pain points slowing operational progress. The finding highlights a growing challenge across distribution as companies attempt to modernize while still relying on disconnected workflows, siloed information and inconsistent operational processes.

Leaders are recognizing that innovation without operational alignment often creates additional complexity instead of efficiency. Texas Plumbing Supply’s Vice President Jeremy Fuller points to the growing importance of execution in distribution technology conversations, noting that distributors are increasingly evaluating “where and how tech delivers measurable value in distribution.” As companies move beyond experimentation and begin asking tougher questions about operational ROI and scalability, Fuller adds that when discussing innovation best practices, “the focus on real-world implementation is what makes these conversations relevant.”

In fact, some of the most successful modernization efforts are happening inside companies that are taking a more measured and intentional approach to innovation. Rather than trying to overhaul every system at once, they are identifying operational bottlenecks first and then evaluating where technology can create the clearest return on investment. This could involve improving product data management before investing heavily in AI initiatives, standardizing branch operations before implementing automation tools, or strengthening ERP discipline before pursuing advanced customer intelligence capabilities.

Collaborative, peer-learning environments are more valuable than ever as companies attempt to separate meaningful operational improvements from technology hype. John Gillespie, managing partner at JG&A Group, says that “bringing together leaders who are actively making decisions about AI, digitization, and automation in a peer-to-peer environment is essential when evaluating business change opportunities.”

There is also a growing recognition that innovation is no longer solely an IT conversation. Operational leaders, sales executives, warehouse teams and ownership groups are all becoming part of broader discussions around modernization, process design and organizational readiness. Distributors are evaluating which processes are limiting growth and how technology investments align with long-term operational strategy.

Plumbers & Factory Supplies’ President Chris Reynolds captures another reality many distributors are facing right now. “Innovation can feel overwhelming, so having a forum to define an optimal path so that progress can happen with conviction is key to successful tech implementation.”

At the same time, professionals are also recognizing that modernization requires more than simply reacting to emerging technology trends. NIBCO’s Director of Marketing Sally Boyer notes the importance of stepping back from day-to-day operations. “Taking time to reflect and assess how emerging technologies align with long-term strategy is critical for sustainable growth.”

Distribution remains a relationship-driven, operationally intensive industry where technology can absolutely improve efficiency, visibility and customer experience, but only when supported by strong processes, leadership alignment and organizational adoption. Some of the industry’s most effective modernization strategies are not necessarily centered on becoming the most technologically advanced company in the market, instead on becoming more operationally disciplined, more adaptable and better positioned to scale.

Additional information on the Innovation Summit ahead of NETWORK2026 in Las Vegas can be found  here.

By Natalie Forster