Ninety-seven percent of distributors say artificial intelligence is essential to their business — yet most remain in the early stages of adoption, according to a new report from the Distribution Solutions Group (DSG) highlighted by PHCPPros.

That gap between stated priority and executed capability is the report's central finding, and it frames the current state of AI in wholesale distribution: near-universal intent, uneven follow-through. For an industry where gross margin points are won through pricing discipline, inventory turns and sales-force productivity, the question is which distributors convert intent into measurable operating results first.

DSG, the B2B sales-and-marketing organization serving distributors across industrial, PHCP, medical and related verticals, did not position the findings as evidence of transformation already achieved. The framing is preparatory: distributors overwhelmingly believe AI matters to their competitiveness, but few have moved beyond pilots or limited deployments.

Intent outruns execution

The 97% figure is the strongest data point in the report and warrants scrutiny on exactly what it measures. It captures distributor sentiment — whether respondents view AI as essential — not deployment rates, spend levels or realized returns. The adoption finding sits on the other side of that line: most respondents self-report early-stage adoption, a self-assessment that leaves undefined what counts as "early" versus operational.

For distribution executives reading the survey, the actionable reading is comparative. If nearly all competitors say AI is essential but most have not deployed it broadly, the near-term advantage sits with the minority that pairs conviction with execution. Pricing optimization, demand forecasting and inventory positioning are the functions where AI most directly touches margin and working capital in wholesale channels.

What distributors stand to gain

The economics at stake are conventional distribution economics, accelerated. AI-driven forecasting tightens inventory turns by reducing safety stock carried against demand uncertainty. Pricing engines raise realized gross margin by matching price to customer and order characteristics. Sales-productivity tools increase revenue per rep by prioritizing accounts and suggesting next actions.

None of these applications is speculative; large distributors across industrial and PHCP verticals have reported results from each. The DSG findings suggest the broad middle of the market — the thousands of mid-size distributors that anchor wholesale channels in North America — has yet to capture them at scale.

The adoption gap in context

Wholesale distribution has historically lagged end-customers and suppliers in technology adoption cycles, from e-commerce platforms to digital price management. The AI pattern appears consistent with that history: the strategic assessment has shifted decisively, while operational change lags.

The risk for slow movers is channel power. As suppliers and large platform operators deploy AI in pricing, product content and demand shaping, distributors that rely on manual processes compete with worse information at slower speed. Customer economics compound the pressure — buyers increasingly expect the responsiveness and personalization that AI-enabled competitors can deliver at lower cost to serve.

What to watch

The report does not claim transformation; it documents intent. The measured facts are the 97% essentiality figure and the early-stage adoption majority. What remains asserted, not yet evidenced, is how quickly the adoption gap closes and which distributor segments close it first.

Watch for follow-on DSG data on deployment depth by function — pricing, inventory, sales enablement — and by distributor size band. The distributors that move from survey conviction to disclosed results on margin and turns will define the competitive baseline for the next adoption cycle.