Balancing Economic Data With The Customer Experience In eCommerce #b2bmarketplace

Welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by Lead Smart Technologies. Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain. Whether it's m and a SaaS and cloud computing, B2B, E commerce or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most.

Good morning.

What's happening?

Keep dancing. Keep dancing. We may not have anybody on here because we have the wrong. The LinkedIn canceled our original event. So there may not be anybody to see you dance other than me.

Going to fire the editor. Well, wait, going to fire John. You're going to fire the person that posted it?

It's fine. Just have to get a cut of my contract.

That's it. Well, we'll see if anybody shows up to join us this morning.

If you are here, please let us know that you're here because we can be very lonely. Yeah.

So to get, if I get that hiccup that happened today correctly is you're on the east coast today in Florida, taking a little time with your wife there and, but working still somewhat. And I'm here in California like normal and I think your laptop's timing on it. When you scheduled the event caught us on East coast versus on LinkedIn for the LinkedIn invite. So that's okay. That's right. And we've got our podcast friends joining us as well. And John will edit this accordingly. Our editor that takes care of all the podcast stuff. John been working with him diligently this week on some updates and some cool stuff he's doing. So we're appreciative of that. So before we jump into things, I'm Kevin Brown, this is Tom Burton, my lifelong friend and co founder of Lead Smart Technologies, who's the sponsor of the around the Horn in wholesale distribution, live show and podcast. We get together every Friday morning at 9 o' clock Pacific Time on LinkedIn.

12 Eastern. Yeah.

Or 12 Eastern on LinkedIn Live, YouTube Live and Facebook Live. And. And then later in the day, our editor that I mentioned earlier, John, who does a phenomenal job. John. Puts all of this together and gets us out on all the popular podcast formats. So you can listen live or listen to the recording on a podcast of what we do each week. But Tom and I get together. We oftentimes have guests. We've got a phenomenal list of guests. In fact, we have guests typically every other week, sometimes every Week our guests are kind of booked right now through, really almost through fully through Q2 and into the early part of Q3. We've got some guests booked. So exciting that we're able to do that. And phenomenal industry folks. So what we do every week is we get together, we spend about an hour or so and we talk with industry experts and folks like you that might join us on the live podcast and ask some questions and give some feedback and we talk about what's going on around the world in wholesale distribution and manufacturing. We look at things like the economy and technology and M and A activity, shipping and supply chain issues and so forth. And we kind of try and take all that information that's coming together for us and boil it down kind of, as Tom likes to say, kind of peel the onion back and find the story behind the story and how that impacts wholesale distribution and manufacturing. That's who our audience is for each week we do that. And what we're doing this morning on this show is we're reviewing a newsletter. The newsletter is called around the Horn and Wholesale Distribution and Manufacturing. It goes out bright and early every Friday morning to I think we're 8,000 or so people that that goes out to now. If you don't get that newsletter and you would like to two simple ways to do it, you can quickly and easily just share an email with us at hello atLead smart tech.com and we will get that right out to you and or you can go to the website for the podcast which is www.aroundthehorn pod.com aroundthehornpod.com and you can sign up for there as well as listen to previous episodes. We get that newsletter out each week. We consolidate a lot of what's going on. As we mentioned, we couldn't do this if it wasn't for two factors each week. One is the company that Tom and I work for, Lead Smart Technologies, which has developed a AI enabled CRM and customer intelligence solution that gathers data from around your company and siloed data that you may have in ERP systems and e commerce systems. And we bring all that together and apply some AI tools to that to give you actionable insights within your business on what's happening with your customer, with your team and throughout your business. LeadSmart supports this and sponsors this event each week, but we also couldn't do it without you because our audience grows every week. So we're now getting podcast downloads in five to seven countries each week and hundreds and hundreds of people are are tuning in live each week. So we're excited about that and we're thanking for that. The last part of this, if you are with us on the podcast, hit the subscribe button and leave us a review on whatever format you're on so it gets out to other people. If you're with us live, YouTube live, hit the subscribe button and the like button. LinkedIn live, follow lead smart technologies where this will be each week and click that button so you can share that with your friends as well. So that's kind of it for the day. Tom, you want to kick us off here and get us rolling on the news.

Let's, let's talk about some news. So we'll start as usual with economy and supply chain. Do you want to kick off with the first one here? Prices up a little bit in February and we're getting above that 2, 2 point something again from, from a year ago. So it's definitely not, I don't know, it's not drifting down, but it's drifting up slightly.

Yeah.

You know, and it's interesting is, you know, early. I don't know, I haven't seen any of today's news, but I don't know if the Fed said anything different. But Powell was saying earlier in the week that, you know, this, this kind of bumping up and down wasn't impacting them too much and that they're still looking for that. And it's probably, you know, we were hoping for March. It's obviously not going to be March, where on the 15th now. But you know, I think they're still looking at this unless something dramatic happens that we see something at the end of this month that pushes this much higher. But you know, I was thinking about that this morning as you're kind of putting some of my notes together and things on this. And you know, it's like, well, you know, I just got done talking about the fact that, you know, we're here to talk about wholesale distribution and manufacturing and you know, here we are talking about Consumer Price Index. You know, it's like, where's the balancing act with that? But you know, when you stop and look at this, the reality of all of this is that Consumer Price Index and a handful of these other factors, housing markets and so forth, they all tie right in through the Department of Labor, a Bureau of Labor Statistics and so forth. All these piece factors into what the Fed's doing with interest rates. Interest rates impact how easy it is to get money and how easy it is to get money and impacts wholesale distribution based on the Cost of money.

Right. Obviously the cost of capital.

Cost of money. Yep.

Is everything right. So.

Yep.

So, yeah, I guess, you know, bottom line, I don't. Same sort of story. Right. Not a whole lot of guidance one way or the other. Things just kind of drifting around. I personally think we're going to see a slight tick up over the next, say between now and the end of the year. That's just really just from observation.

Up on, on rates or on the, on.

No, no, on inflation. I think we're going to see the 3.2 probably end up around 3. Do you know, waiver between 3.2 and 3.5 as we move from month to month.

Yeah.

For the next few months. Just. That's just, you know, again, that's more instinctive more than having a whole lot of data to back it. But that's what I, I think we're, I don't. I doubt we're going to see that drop back down, but heck, could be proven wrong.

So let me ask you a question related to that. If you're prognosticating, then based upon that prognostication or your crystal ball, what, what did Johnny Carson used to have that. They call him the wizard of some sort?

Yeah, I remember that. Yeah.

Yep. But. So if that's the case, let's say we bounce between 3.2, 3.5. Are there cuts?

I don't. I think we will see a cut. I don't know all the meetings. I think there's meetings in November and December. I don't know exactly, but I think we will see the first test roughly. Right, right. But I think at the end of the year, I don't know if there's one month to month or whatever. I think it'll be Q4. Let's just put that way. I think we're not going to see a cut until Q4, and I think they're going to have to make a cut at that point. But I don't think we're still going to see inflation getting down to that 2.0 by then. I think they're just at the point where they're going to have to start making some cuts. Otherwise it ends up. They end up being too late like they were before when they were too early. So I think that what I believe will happen is they're going to say, hey, we're going to hold tight and until Q4, really kind of see how this plays out and then there will be a cut in Q4. I don't think it'll be meaningful. And then we'll have to see how things kind of play out till next year. That's my procross. What would you call the word prognostication? Easy for me to say. Prognostication. Yes, that is my prognostication.

Okay. I'm going to take a different tack. All right. I think, I think we're going to bounce between 2.8 and 3.2. And I think that by summer we're gonna see them doing the first one of what's probably only two this year, I think.

So you're doing Q3, so the first one will be in Q3.

Yep.

So one in Q3 and one in Q4 is what you.

I think we'll see two to three. Not. I think originally they said four or five. I don't think that's going to happen this year based upon where we're at. But Mike, listen, who are we? Right?

We're procrastinating. Procrastinating. Yeah, we're procrastinating too, but that's fine.

Yeah, the, that's funny. No, the, the, the point with that that I'm making and thinking about this is I think there is enough of in. And this goes kind of back to what I've talked about a lot is I question kind of all of our metrics that we use that we've been using forever in the economy. And I think at this setting right now is I think the stock market is doing some great things, although this week hasn't been as bullish as some other weeks recently, but we're setting records. And when we look at what's going on with the chip makers and some of the technology stocks out there that are happening right now, I think there's enough of the economy that's feeling this, We've talked a lot about this just even over almost two year and a half now.

Right.

There's just some pent up energy there. And I think that again, what do I know about economics, But I think the reality of it is I could see the Fed saying, okay, we're going to test the water with one. Right. But I would think we would have to be at 3 or below 3, certainly not being up, you know, where we're at right now, three, two range and so forth. So. Okay, that's just my thoughts. We'll see what happens.

We'll see what happens.

Yeah, so we'll, so let's, let's go.

Into the next article here because I think it's kind of relevant to what we're talking about here.

Yep.

So U.S. small Business, this is from Reuters. U.S. small business optimism falls to lowest in nine months. And they're saying that it's the lowest level since May due to continued concerns around inflation. Right. So what's your take on that based upon what we just were talking about?

Well, I think this stuff is interesting, right? They've historically been solid and had good outlook on things. And I think the struggle right now is what you mentioned earlier, right, Is cost of funds. What does it cost to get money? And until we see some of these things happen, right, the some adjustments to rates and so forth, you're going to have this, we call it kind of waffling, right. At the small business level, you know, it's been solid all along. But I think it's my struggle with some of this is like how long can we, we use the term oftentimes here on this show, Simmer. Right. How long can we be simmering? And we don't want rapid boil, you know, like evaporating boil, and we don't want cold. But simmering seems to be, you know, it's like it's, it's no man's land. I think it's a struggle to be there, you know.

Yeah. And I think that if you look at this article, right, and look at some of the data that they were talking about in here, what I read from this is that as, and I think about it just even for our own company or and so forth, I think people expected almost what we just talked about, expected things to be getting better, faster and to maybe even have a reduction in price, Right. So reduction in interest and a reduction in price. And it's not. It just keeps dragging on, right? It just keeps dragging on along the way. And yet, you know, we see it all the time, right? I mean, the cost of things, especially for people and depending upon the types of people you're looking for, the cost of services, all of that just keeps going up and up and up. And it's obviously a drag on your expenses and it keeps going up. So I think that if you look at that article, I think that's what I read into it is it keeps dragging on longer. And so as a result, the optimism falls where there was a lot more optimism that things are going to be happening faster.

Well, I think you're spot on with that. And one of the things that the article talks about is, you know, small businesses have felt the pinch of higher costs and tighter credit conditions, Right. There's not as much money available and it's more costly to get to that impacts the business. Right. As a whole. You know, the good, the good news out of that is, right, the audience that we're addressing here with wholesale distributors and manufacturers is, you know, they have been surging, you know, the vast majority of our customers and the people that we talk to day in and day out, crazy busy growth, opening new branches, even, you know, really getting ready for, you know, the future being more positive. I think one of the neat things that came out of this or that I really liked and appreciated out of this particular article, excuse me, was the discussion about the labor market easing a little bit from this same survey because we've, you know, heard constantly from our customers and folks that join us for the show regularly and so forth, talking about how difficult it is to hire right now. And this talked about that that was easing slightly and they're having an easier time in attracting and retaining employees. So that's a positive thing that came out of that because in January it was a much higher issue. So we've seen some adjustments so far this year for them. Good news. Let's jump ahead here. It's interesting. We're in our section, by the way, as a reminder, if you're listening to the podcast and, and not watching us live on YouTube, LinkedIn or Facebook, we, we're discussing the newsletter around the Horn and wholesale distribution that goes out every Friday. And we have multiple sections that we talk about the economy and supply chain and then we move on and we, we talk about E commerce and marketing and AI and technology. So we've got these different sections. So we're still in that first section about supply chain. And there's an article that we posted this morning from cnbc and it talks about strikes at the east coast and Gulf port ports that are port strikes that are looming or potential. And it's a big, a big deal, right? We've talked about this, talked about it. East coast and west coast of Canada last year and the west coast of the US earlier last year. And these are, these are big factors. You know, again, we're here each week to talk about things that impact wholesale distribution and manufacturing. And part of what we've, what we've got going on here is the perfect storm kind of brewing, right? We've got the Panama Canal issues that are going on with the lake there being lower because of a drought and the Panama Canal is narrower and fewer ships able to get through her and it's slower and a big backup with it. And the article even mentions what's going on. It's kind of similar to the backup that we had during the, during the pandemic at the ports of Los Angeles and la. And then you've got the Suez Canal issue, which things from Europe are coming through there to get to the East Coast. So this is a big issue.

Yeah, it is the perfect storm we talked about last week. Right. Some of the things, in fact, with Mike on the call, we were talking about just the issues with, you know, shipping and ship, freight and shipping and so forth. Right. You know, just the, I guess, geopolitical issues and the, the drought issues. But now you enter in a strike into the equation. It seems like, you know, freight, shipping or shipping is really going to be a very, very perilous way of moving stuff around.

Well, and what's interesting about this one too is this is all of the east coast and it's the Gulf. Right, Right. So you're really kind of talking about from probably the Port of Houston all the way across through Florida and up towards Canada. And that's a really big issue. So we've already been seeing container prices going up and slowing down in talking to folks here. And now you've got this potential issue. Now the contract doesn't expire till September, but it's May 17th is the cutoff for the contract negotiations, basically. So this could be a pretty big deal if there was potentially a little bit of a silver lining to this is that unlike the west coast, the west coast bonuses and so forth are typically to for the longshoremen. And in the west coast it's longshoremen, warehouse workers, and east coast it's longshoremen is tied to hours worked and so forth. There's a tie on the east coast contract and Gulfports and East coast contract to the amount of tonnage going through. So in the west coast they had some work slowdowns, but not a stoppage. On the east coast, if they have a stoppage, they're not going to be removing as much tonnage. And, and you know, there's people here as this article talked about that, you know, are longshoremen that are making 150 to $250,000 a year. That's an attractive wage. And now they're talking about with this contract extension wanting to go. I think it was the, the west coast increase was 32%. And this mentioned something about a Great Lakes contract extension that was even higher. So these are some powerful jobs.

Big numbers.

Yep, big numbers. Right. I'm thinking, man, maybe I should head up to get in this union, head up on Friday afternoons And Saturday and Sunday and unload.

Like a moonlight job.

Yeah, that's right. Yeah, it's my little, my little. That's right. Keith. Keith Yoder's here, says I should be a longshoreman. Right, that's it. And, and Keith happens to live in long beach, probably 10 minutes from the port. So that's a, that's a great thing. I agree. You know, and, but you know, it's funny, as we talk about this, we're talking about the east coast, right? We have people listening from all over the world. But you know, we, we've been friends our whole life, basically since kindergarten, which is funny enough, but we grew up right on the edge of the port of LA and Long beach and I know quite a few people that have gone into that career and I had a job while I was in college working in the port, delivering things out to the tanker ships in the harbor and those at anchor and those in the harbor at dock. And that was quite an experience to watch that whole world work. So big issue, you know, it's just something to be paying attention to whether you're central part of the country, eastern part of the country. We're already seeing freight being somewhat diverted to the west Coast. This talks about. So something to pay close attention to.

Goes back to what we talked about. Yeah, I just could say it goes back to. Everything is getting more of that onshoring, that near shoring, having options that are not dependent upon stuff coming from overseas. So.

Well, and perfect, perfect segue, man. You're getting, you're a pro at this. As we move into our manufacturing distribution segment here, right, We've got, I talk about Schneider Electric, the French electrical equipment maker. And you know, Schneider is, if you're in distribution, anything industrial related or building materials related, you know who Schneider is. They're the biggest, and I don't say the best because I don't know enough, but the biggest out there and they're investing $140 million to boosting their US manufacturing operations. Doesn't necessarily mention this tying into onshoring. They have a facility already here in Mississippi or in Tennessee, but they're talking about 750 new workers, right. So one, they're going to have to go find those people. But that's good news. And I think that I'll start paying attention as we vet some of the articles to some more about on shoring. Because when you look at all this port stuff that we talk about each week and last week I think we had an article about just freight in general and it's no longer a spot issue.

Right.

It's now a global issue. The article, I think it was last week we talked about this, that it's not an issue about is there a port strike, you know, on the west coast or the east coast or in Canada or whatever. It's, it's geopolitical tensions with China and Taiwan. It's the Russian input on, you know, gas and LPG and in the North Sea and so forth. It's the Suez Canal and the geopolitical issues going on in the Middle East. It's climate change or whatever you want to call that, that has this lake drying up and the Panama Canal. These are issues that are day to day issues that are probably no longer going to be ebbing and flowing like they have historically. They are constantly, which, you know, if you're in the supply chain world, right, and you're, and you're working on that and planning and so forth, it's, your job is probably more important than it's ever been.

Yeah.

All right.

And we talked about this last week, I think, you know, even, we talked a bit even about how AI and so forth can help really optimize what you're doing with your supply chain. So you understand, you know, what are the different, where are the points of failure or potential points of failure, what are some contingencies, all of that kind of stuff. I'm sure Schneider, you know, as big as they are, invested a lot in making the decision to decide to boost the US operations. It'd be very interesting to know, you know, all the things that were decided and looked at behind the scenes.

Yeah, my guess, it was a, it was a, a broad decision that was probably tied to onshoring, it was probably tied to issues in China going on and so forth right now. And, and you pull all of those things together and it starts making sense. And you know, the reality of it is, and we've talked about this a lot is, you know, it is nowhere near the financial benefits of manufacturing in China. Even if you were not factoring in any of these geopolitical issues or timeline issues or port issues, any of those things, it's not the same financially manufacturing there when, when manufacturing moved over in the, I'm going to say 80s was the big push, but 70s and so forth as well. As we moved so much offshore to China in particular, there was no middle class in China. There's a middle class that's developed now because of this input and impact and prices just keep going up. So now as you have prices have gone up for manufacturing China and then you have these supply chain issues, shipping issues and and so forth that are going on. It's like you start putting all that together and the question is, comes is, you know, not just what are my costs but what are my risks. Yep, yep.

So. And risk. And the risk can lead to much higher cost.

Well, exactly right. And you know, what I know is on people's mind, I've talked to people about this is that if there's an issue with, with China and Taiwan, which is at great risk right now.

Right.

Other countries are going to get involved with that and getting things out of China might be very difficult, certainly out of Taiwan. Right. So anyway, something we're going to continue to pay close attention to as we do on an ongoing basis. You come here for this type of info and we'll give you opinions from at least two of us each week.

We'll give you some really crappy opinions, but other than that, no, we're going.

To give you opinions. Right. They're worth what you pay for them.

That's right.

So good. All right. Well, our friends at Hardy, the Heating and air conditioning Refrigeration Distributors International Group trade association for those folks which we have a lot of customers in, in the lead smart technologies world, in that H Vac and refrigeration world. So Good news, right. 9% revenue increase in January for their members, which is, is solid because they earlier had been reporting some, some fall offs a little bit. So it's kind of nice to see this. I think December was a 7% decline. So it's nice to see this kind of bump for that group.

Yeah. And it looked like year over year it's pretty flat 0.2%.

Yep.

But definitely. And again this goes back to our early discussion on economy. Right. It's, you know, Obviously it's a 9% increase in, in one month. There's a lot of additional revenue.

Yeah.

And again that could just be pent up demand from the holidays, you know, things not happening during the holiday season or whatever. Be interesting to see how that continues as we, as we move forward.

Yep, absolutely.

The.

It'S interesting right. In, in this H Vac kind of world and there's a lot of really large distributors here in the US in particular that are H Vac, plumbing, pipe, valve and valve and fitting and electrical. We've got three or four of those as really good, the very large ones as lead smart customers. Some more coming on here shortly as our customers. And as you know, I was a couple weeks ago I was on the east coast and visiting a few of our, of our larger ones and one.

Of our.

Customers, it's a very large H Vac distributor I was visiting in upstate New York and just great, great people. And to watch the buzz around their business, right. Opening new branches, new showrooms and so forth, it just felt really, really positive. In fact, I made a video about it and posted it to LinkedIn and Instagram last week. About that is just you can feel when you are on the phone with a lot of these organizations, they're moving fast and there's good things happening there. So even if it's kind of a little bit of a hiccup line or you know, that we see along the way, I shouldn't say hiccup, but more like a heart rate with ups and downs. Overall, there's a nice demand that you can see when you're out visiting and talking to these folks.

Yep.

So good. All right, should we scroll into our E commerce and marketing segment?

Yep. So first one here, Digital Commerce 360. Isn't this a surprise? Customer experience is everything in e commerce. 80%, 86% of B2B retail buyers are willing to switch suppliers if the B2B web store offers a better experience. I think we've talked about this before.

Well, it's getting more and more important every day, right?

Yeah. And we've obviously there wasn't a tremendous amount of details in this article, but things that we've touched on before. You think about omnipresence, what is experience? Experience is a lot of different things. It's personalization, it's omnipresent or omni buying opportunities, omnichannel in what you're doing. There's a number of variables that go into that and I think the bar is going to continue. This is an area where I think AI is really going to. As AI gets more solid and more reliable is really, really going to make a big difference because somebody who can really have that conversational AI experience that isn't hallucinating or giving bad data like some of the airlines did or whatever, I think it really will make a take expectation of experience to another level.

I think you're, I think you're on with that. You know what I mean? It's kind of that we think about, you know, what, what is experience? Right. And they, they talk a little bit about that. You know, in here they're looking for accurate delivery time and information, accurate pricing information, accurate stock levels. And it said that they. One of the challenges they have is Lack of product information, you know. And I know a number that both the buying groups and trade associations are working really hard to get unified, you know, product information management tools out there. The PIMs that are out there from a software standpoint that work on these things. But it's interesting, you know. And we've got another article we'll talk about in a few minutes related to a large electrical distributor. The good folks at State Electric in their experience. But I kind of was thinking about this morning I wanted to get your take a little bit on this, you know and I, I haven't. This will surprise you. I haven't developed an opinion on this fully yet. But I'm kind of wondering right as we, and we talk about E Commerce every week at some level. I just was traveled last, last month to a E commerce and marketing event in San Antonio that affiliated distributors put on for their members. A great event. Talked to a lot of people there. And I guess where I'm kind of struggling is am I in better shape because if I'm a wholesale distributor because I adopted an E commerce strategy two years ago but I'm struggling with some of these issues, right. My content keeping pricing up to date because of my connections and so forth. You know, maybe I have maybe some of the not as advanced software solutions and you know, I'll put a little plug in for our, our friends at Optimizely and, and their E commerce solutions that we've just partnered with at Lead Smart. We're excited about that. And you. Maybe they're, maybe they're a little bit behind the curve and now they're struggling to have to go fix all of these things. Am I better off being that guy or am I better off being the person that is taking advantage of all the advanced tools, the research that's been available, some of the AI tools that are available and just going into E commerce.

You mean just starting with E Commerce. You mean just starting with E commerce.

I'm sorry, just starting with E commerce versus having been in it for a while.

Yeah, no, I, yeah. So I think there's definitely. First of all, I don't even like the word E commerce. I think there is, there is the buying whatever we want to call it, whether it's digital or analog. Right. There's the buying experience and I think those become, there's a, there's. Those lines are getting grayer and grayer between them. But that said, if we call it E Commerce, I do believe yes, there is an e Commerce 2.0 that we're into right now that is looking. I think this ties into the next article we're going to talk about. Ecom 2.0 is very different than Ecom 1.0 in terms of that experience, in terms of the technology, in terms of, you know, how it's again, just the different capabilities that are going to be there. I do think that there's unfortunately a lot of people that have done Ecom 1.0 that'll to a large degree have to throw the baby out with the bathwater and really upgrade. It's not just, hey, I'm going to patch this and patch that. They're just not going to have the architecture, the infrastructure necessarily to accomplish what they need to. But again, everybody's different, right? Everybody's done things at a different time and different technologies and different platforms and so forth. So by no means is that a, a one size fits all. But yeah, I do think there is a definitely a new generation here. And what I would recommend is be deliberate right now because I think a lot of the AI things that are available now are going to be very different than what are available and even six months, nine months, 12 months. Yeah. So I think that's the challenge is being a bit deliberate between those things because we haven't seen some of the things that are going to be possible with the AI side. But yeah, I think there's very much a new generation here.

So it's kind of an interesting place to be. And I think you're right about it. The interesting thing that just was going through my mind and I'm going to make a broad statement that's maybe a little too broad, but sometimes you look at some of your legacy technology, right. And I'll just use ERPs. The simplest one, right, is it's not that it's set it and forget it, right. You've got your IT teams are managing, there's updates, there's patches, whatever it might be. If you've got a CRM or a customer intelligence solution, you're always working on the updates with that. But E commerce is super dynamic, right? It's changing constantly. Buyers are adjusting, there's new tools that are coming into it. It seems like E Commerce, specifically in the technology side of it, and then maintain, you know, all of the connections and so forth might be a little bit more challenging for folks who are used to having kind of a set it and forget it. And you know, we have the same or the same ERP system we've had for, you know, 14 years or whatever it might be.

Yeah. I mean and when you went to the show, the E Comm show a couple I guess was last month or the month before?

A month ago, yeah.

Are you seeing. Were you seeing titles of like a Chief Buying Officer or a chief, you know, Commerce officer thing? I know we're seeing that in some other industries where it's. It's a full time strategic role. It's not even an IT role. It's a full time strategic role on that buyer experience.

I think what we see. That's a great question, Tom. I think what we see a lot of is and I've seen this, I've been to this event three years in a row now and in fact interesting enough, this particular E commerce event that affiliated distributors hosted. It was the first, very first event I went to. It wasn't even post covet. I was actually kind of uncomfortable even going to an event yet, you know, we had the different colored lanyards based upon, you know, what could somebody, you know, keep their distance was red and all these difference what you were, you know, lanyards of what you were willing to for your bat lanyard badge lanyards for what you were willing to engage with people. But what I've seen the change is you'll see a lot more of a director level, ecom director and so forth digital experience and say so much of that, but digital director and then there are a handful in fact trying to get him to come join us on the show sometime soon is at Dakota Supply Group, you know, massive H Vac plumbing electrical distributor in the north central part of the country and their president CEO has been on this show with us before and they've recently hired a Chief Digital officer where all of those things kind of fall underneath. And I think that's in this. Again, this is just one guy's thoughts.

But.

That'S what I think we'll probably see more of is a Chief Digital Officer that's going to be responsible for E commerce AI. And what I'm seeing is that digital term it starts falling into where we fit because of the AI tools and so forth built into lead smart channel cloud. Our, our product is that we're fitting more into that world than maybe an IT world. I know what some of these companies are doing is they've got, you know, a Chief Digital Officer and Chief Information Officer as well or CTO and a you know, CDO in that setting. So I think that's kind of where we're headed. But to your question is I've only seen it where somebody has the C level position a couple of times.

Okay. Yeah. No, I mean, there's, you know, it, right. Has historically been very technology focused.

Sure.

And technology being, you know, transactional. Right. We have systems that deal with transactions. When you start looking at your technology solution from the eye of the buyer first, or your partner or whatever, whoever, your, your, your stakeholder goes way beyond an internal employee. Right. A lot of it was all built around building systems for internal employees. But now if you look beyond the side of your, right, customer facing, partner, facing all of that, which is what this is happening, right. Is the technology, the driver of the technology is outside of your organization versus inside your organization.

Exactly.

Having that strategic view from the buyer perspective is, I think, essential because an IT person generally isn't going to have that same depth of understanding of the buyer. They're more understanding the technology, not the buyer and the user themselves. So I think it's going to be a very important role.

Well, those are good points, Tom. You know, and I think before we jump ahead on that, it's good to discuss. Right. And you brought this, you talk about this a lot in your book that you wrote and the revenue Zone, and we've talked about it forever. And, you know, in the conversations we have with customers, we talk about this all the time, right. Is the buyer is changing, right. Every day. What's the most recent percentage you've seen of B2B buyers being millennials? I think 60 something.

60%. Yeah. 60%. Yeah.

And so that's just going to keep changing, right. So guys like us, you know, we're approaching, I guess we're approaching. We're not there, but approaching those ages and people are starting to retire and we've got younger people coming. They're expecting a different experience. I'll quote our friend Ian Heller from Distribution Strategy Group that was on the show with us a while back, he said, and I absolutely love this phrase, right. Wholesale distribution needs to meet the buyer at where the buyer wants to buy. And it's irrelevant what you think or what you want, Right. You need to meet the buyer where the buyer wants to buy. And what the buyer is now doing is saying, I want a different experience. I say this all the time, right? The, you know, here I am holding up my cell phone, right? That that buyer, B2B buyer is coming up through the ranks in, at the auto plant or at the construction company or whatever it might be. That guy probably took, took his girlfriend to, to out to dinner or to a concert in a, in an Uber the night before and could have ordered doordash delivered to the office from his phone. That's his, his experience is different. So we need to meet them in that place. And what wholesale distribution is going to have to catch up with. And frankly is I'll suggest this as well with manufacturers. What manufacturers have to be thinking is what's the digital experience that distributors want Right. With them as well. And so you start putting those two pieces together is we've got to keep expanding, making these things seamless and frictionless for these buyers. Because what we see the most of right now, and you know, this is back to, to the folks that distribution strategy group, I was listening to one of their podcasts the other day and you know, they were talking about attribution and you know, because a lot of people will comment about, well, you know, I'm trying to figure out exactly how many purchase orders were placed, you know, online and that's not appropriate attribution for your digital journey.

Right.

Or your digital options that you share with your customers. Right. What you really want to be looking at is thinking about, you know, even surveying customers in this setting is with the idea that says, hey, you know what, when you purchase from us, what role does our website play? And what most people will find is that, you know, the vast majority of people are starting to say I did research on your website or maybe I built my order and so forth. And I think where we're going to migrate out of right now is what people are seeing is people are building orders online and saying go ahead and ship this to me or my guys are going to go pick it up. But that digital transition to E commerce being much deeper of what the people are literally ready to click the buy button at that B2B buyer is going to continue to expand.

Yep. And just I guess to kind of wrap up. Right. What we just said here, 80% of buyers are willing to switch suppliers if they offer a better experience. So you may have discounts, you may already have pre existing, you know, pos and things and contracts with a buyer. But yet what it's saying here is regardless of that, if your experience is not great, I'm still willing to look to switch. So anyway, let's, let's, let's jump ahead. We got, still got a few.

Well, this kind of ties into that second article, right. About State Electric and, and their digital commerce article that we've got in there. Great folks there. You know, it kind of ties right in. Right. What they're really working on doing is, you know, keeping up with what the buyers want the last thing I'll make the comment on this is Ryan Ramsby, that from State and they're just great folks over there. I've had a number of conversations with them. You know, he made a comment about their internal structure as well, is that they had a struggle with salespeople being uncomfortable with stuff being available online and am I going to get commissions and this internal adoption and hesitancy among some of the stakeholders. So I think that goes ties back to how we message in general to our people. What does all this mean? So good points there.

Okay, let's go ahead. Do technology, cybersecurity and AI. Yeah.

Hey, can I tell you real quick, way off base here, but just as it hit me with, as we, as I look at the newsletter here, we're talking about cyber and technology and AI in this segment of the newsletter. And, and yesterday I saw, only for the second time, I saw a Tesla Cyber truck. Have you seen any of those on the road yet?

I have not, no. No.

God, they're ugly. I don't know why somebody would spend that kind of money, but other than to look cool. But yeah, I've seen two of them now in the last 10 days.

No, I haven't seen them.

Yeah. So anyways, that just caught me. Cybertruck's ugly. My, my book, I'm on record now. So. So, hey. But the important things. Strasbourg, Austria. I'm sorry, Strasbourg, France is right on the border of the Black Forest with Germany Is big meeting this week. The European Union's group that was working on artificial intelligence rules have met. They've got a provisional agreement in place that looks like it is going to become legislation within the EU starting very quickly. What are your takes on that as our resident AI expert? Good morning. Brandon just joined us as well.

Thanks for being with us, Brandon. Not, not to worry that you're late because. Because of my LinkedIn ineptitude. I think we're late because of the time zone.

So I'm glad you found us still 9:44 Pacific Time. So we're happy that anybody joins us.

Yeah, that's right. But the. I haven't read all the details of this. You know, I know it's based on what they did before or what some of the things that they had done before. So I assume it's going to be not radically different than, you know, more details or whatever. I still say the same thing that I said before. I think it's hard to legislate something that is so rapidly changing. A lot of this focuses on building large models. But if you look at where a lot of the model building is going is open source. And I don't know how you regulate open source because you're not really. There's not like one neck to choke, so to speak. It's like, how do you actually manage and do some of these things? So I think there's a lot of. First of all, I think it's good. I think it's good to get some guidelines down on paper. I think it's good that we're looking at it, I don't know practically from a, from a rule or a law perspective, how practical this is going to be or even enforceable, so that we're going to have to see. But I think I've said this before, I just don't. Things are changing so quickly and it's not even the technology's changing, it's just if you look at the, in the beginning, you know, when OpenAI and ChatGPT came out, right, it was one big model and it was owned by OpenAI and you have models that are owned by Google. And there's actually a lot of conversation even with OpenAI and a lot of push to make what they're doing open source. So there's a lot of things happening in the dynamics here that I'm not sure are going to reflect in these legislations. But like I said, I think it's a good start.

Well, good. So I've got a take on this as well. I'm very happy to see this. You know, I think there's a. You hear sometimes the phrase, it says we're in the, you know, the Wild west of AI, right? And what was needed during the Wild west, you needed a sheriff. And I think what this does is this does a nice job of laying some groundwork. I wouldn't argue for one second what you're saying about all these open source pieces and so forth. What they're doing here though, is they're saying, hey, you know what, if you're chatgpt and you choose to make this open source, you are accountable for this. And so I think what they're really trying to do is put some level of accountability and this is really not stifling. I think what's, what's interesting, my take on it is, and I've watched this, read a lot of this as this came together, is they put something fairly rock solid. And we talked about this a number of months ago when they were, you know, first kind of gave the outline of what this was going to look like. And then we came out with this, you know, I think it was actually even the week before out comes, I'm just going to call it milk toast. What is it? What was, what did the White House come out with a presidential guidance or.

Yeah. Or something. I don't remember.

Yeah, but I know no teeth behind it really, other than, I mean, you could still be. And I've always liked this. I'm going to go back to my days and in, you know, safety equipment sales. Right. You know, if you have any type of guidance out there that is an industry standard, you better be ready to defend yourself against that if you get to court. Doesn't matter if it's a law or not. But I think what they're trying to do here in the, the EU is really set some guidelines and as they talk about it, you know, here is that, by the way, 523 EU lawmakers voted in favor of this and only 46 were against it. Right. So what they're talking about is, you know, real time biometric surveillance, how those things are being used, certain specific crimes they're trying to prevent genuine threats such as terror attacks and how these pieces are used out there. But I think what we're seeing is, and I, I believe, and we'll see if this proves out or not, I think we're going to see in the, this, the article that we posted here references that there's, you know, this is probably now the baseline moving forward for other nations to follow. Yes, but, but I think what this does is if I'm, and I mean I was thinking the first thing that came to my mind as I was looking at this article was, you know, what does this mean to lead smart technologies, Right, where we're the two co founders of a technology company that use AI. But I think what this does is it draws kind of a line in the sand that says, okay, you know what to your point about open source and what does all this mean is they're shifting that responsibility that says we're putting a line in the sand of some expectations. And now you as an industry that's developing all of this technology, you should be taking that into account in your development. Right. And it's as simple as having a, you know, an ANSI standard for a piece of safety equipment or a, a NIOSH standard for healthcare or whatever it might be. There is something that when we're developing technology to, we're trying to stay within those bounds and maybe those boundaries change. But I think it's probably good to have some Boundaries in place.

No, I think that's right. I think it's, it's good. I don't have any issue with the taking the thing on there. It'll be interesting to see the practicality of it and especially when you go from to something that's actually law. Right. How you abide with those practicalities and so forth. So. Yep, again, like I said, I haven't dug into all the details of it, but at first glance that was my, my thought. But I certainly agree that having something there is, is a good thing to have some guidelines and some structure.

So the interesting thing, the interesting thing in this is they're not messing around. Right. No fines on this. Go from 7 1/2 million euros on the low end to 1 1/2 times your annual turnover of your company or 7% of global turnover. Crazy. You don't want to be, you don't want to be meta or Google and get sideways on this.

No, no.

Right. So that's, it'll be interesting. But to see, my assumption is we're going to see probably fairly quickly, you know, other, other nations follow and probably some more teeth behind what we see here in the US So yeah, and.

I, again, I guess I haven't read it, but generally when you get these large legislations, though, a lot of times the large incumbents have influenced it and a lot of times are it is in their favor. The Googles, the Facebooks, those types of people. Like I said, I don't know, I haven't dug into it enough to see. But a lot of times they have a lot of influence on what's put in there and sometimes then it affects more the little guys than, than the big guys when you get these big legislation that are there. Yep.

So absolutely, Absolutely.

All right.

We can kind of slide on here, you know, before we jump ahead Too far though and too fast though, Tom just I didn't do my typical midway reminder and we're coming down to the end of the show, but if you're listening to us on our podcast, Amazon Pods, Spotify, Apple Podcasts, wherever it might be, we're here each week at 9am Pacific Time. Tom Burton and Kevin Brown. We review a newsletter that we send out every week called around the Horn and Wholesale Distribution and Manufacturing. If you don't get that newsletter and you would like to two simple ways to get that, go to our website for the podcast, which is called www.aroundthehorn pod aroundthehornpod.com or a simple email@helloadsmartech.com we'll get you that newsletter out. It gets out to about 8,000 people each week now and we have that list growing every week. And so it's a real positive thing out there. So if you'd like it, let us know. But you're not seeing the screen that we're showing these articles on and we have different segments. This takes us kind of into the segment here about our sales and M and A segment. We just posted one article there this week about Imperial Dade, which is a large janitorial supply and MRO supply company having done an acquisition this week of another large maintenance supply company in New York City. We try and kind of keep up on those, the M and A activities. We share those both here in this particular segment and also in our industry scuttlebutt segment. So good, good for the folks at Imperial Dade. If we jump Tom into our people and leadership segment which is newer to the newsletter. We just added that in the middle of January. There's kind of a good article here about it says one for all and all for one about Lawson Products, who's a large industrial distributor Chicago based company. And there was a good article there with their chief of HR and talking about really trying to get the solid message around the entire company about what they do, what they bring to their customers and really get an understanding of the business. And I see this so often, you know, or throughout my career is, you know, and even in my travels recently I've kind of seen this with some of the groups that I've met with is, you know, you've got a group over here, whether it's it or it's HR or it's whoever it might be that they don't understand the full impact of their company necessarily or they don't understand all aspects of their company even what some of their other departments do. And they just thought this was a nice thing about the work that you know. And Lawson has 900 sales reps about trying to bring all aspects of the company together. So everybody's behind it. And yeah, mentioning this to you and some of our team a while back is what so one of the things I want to start doing is we bring new hires into our company. At Lead Smart Technologies is everything that we do is about supporting manufacturers and wholesale distributors. So you start working with us, you're going to go out and probably spend a day in a truck with a building material salesman or a pipe valve and fitting salesman and really see right what they're doing and how they, how they use our product. So I really Enjoyed that article about what Lawson Products is doing. So good on you Lawson.

I'll just say one real quick thing on that is that I see this in dealing with our customers is every day I think I'm seeing that our customers are looking to have a much better not just an understanding of the products they sell or who their customers are, but what are the customers behavior, what are they buying, what are they not buying, what could they be buying? And not just so much on how do I sell more but but how do I again goes back to experience, right? How do I provide a better experience, how do I provide better service? So really getting that depth of understanding is I'm seeing, you know, companies having more and more attention on that all the time.

Yep, great, great point. Totally agree with that. Let's kind of jump into our industry scuttlebutt section. We do each week 3M with a new CEO coming in which is was good news according to the stock market. And so that was kind of interesting to see. New gentleman there. Bill Brown must be solid with a name like that, last name of Brown, but 7% jump in their stock on the day that it was announced. Pretty solid. And he's not an industry insider, he's a technology guy that's coming into to run this organization. So it's kind of interesting to see this external person come in. We've got a regular group of people from 3M that join us on the show each week and we see them at shows and events. And good company has had some, some challenges from some tough lawsuits in the last year or so. But good to see that. And obviously it was very encouraging to Wall street to see the new CEO coming in.

Good.

Quick update there regarding Sonefar, another French large French distributor with some very significant growth in their income. So good to see them. Thirteen acquisitions last year. Boy, there is no shortage of cash out there to do acquisitions, is there? No.

Even with the higher interest rates and some of that, the private equity and the M and A market still seems to be quite robust.

Yep, that's interesting. And then the last part of our industry scuttlebutt this week. Last week as our guest we had the CEO of ARG Industrial. Mike Mortensen was with us. We appreciate having Mike with us. Mike actually announced this news piece that we have on last week's show, but their marketing manager sent me the press release and so we we threw it in there as well that ARG just opened their 13th branch in Idaho. So good for them there. Pacific Northwest and Alaska. Good solid people there. So we're appreciative of them. And congratulations to them on that as well. So, so last, last and certainly not least is an article that was written, it's public, was published Distribution Strategy Group's website by our friend Brian Hopkins. Brian's with us most weeks. Fine gentleman. And he wrote a great article about how to redefine leadership for a customer obsessed air era era. Did you get a chance to look through that very closely? He made some really good points.

No, I didn't. And so what were some of the key highlights? Just real quick.

Well, you know, he, his focus was on, you know, leadership taking a focus on commitment to being customer centric in organizations. And I think, you know, what we've seen over the years over and over again is it's we do business this way. Right. And we've done it this way for 75 years or whatever it might be. And I think what comes out of that is sometimes a mindset that needs to be changed. As we, you know, we spent so much time earlier today and we talk about it all the time about changing buyers is that we need to move out of that area, that mindset and we can talk about it. Right. And Brian mentions this in here as well. You know, we can, we can talk about that, but what are we really doing it right? So about changing that focus within our organization so it moves throughout the organization and it's not just with, you know, you used a term. We were, we did our yearly review in January for our company and you were, we were looking at our core values as an EOS operating company. We need to stick really close with that. We look at those every year. And you had made a comment about wanting to make sure that nothing in our core values was a platitude. Right. Or just it's nice, it would look nice up on the wall or you know, our mission statement or whatever it is. It's so, so often doesn't go through an organization. And there was a lot of that type of discussion. And so, you know, he was talking about, he made a couple of key points about executives, you know, visiting your locations, seeing how customer experiences firsthand, both for your customer and for your employees. And I was talking about town halls, talking about Shadow a customer where leaders and team members spend a day working with customers, going out and visiting with them more and getting into all layers of the organization. He used a good example from Brian's a former Granger executive and very strong background experience. He just joined DSG and I'd consider Brian A friend. But he uses an example of when Granger instituted in the early 2000s. I remember because I was at Granger probably monthly then as a vendor at their corporate headquarters of when they implemented their SAP program and when they shifted into the SAP as their ERP program. And it was. It was hard. And I remember back there and seeing, you know, more. Call them more rooms, I guess, of, you know, 50, 75 people that were in there trying to sort through this stuff. But he talked about at the time, the Grangers president, Mike Pulik, met Mike a few different times, and about him going out to branches and seeing how it was impacting people there. So we tend to sometimes get wrapped up in the idea of, you know, this is how we do things. And what we need to be thinking about is this is how our customer wants to do.

It's everything we've talked about today. Right. It's a good way to put a bow on some of the things where. So, yeah, I will definitely take a closer look at that. Sounds like. Sounds like a good read. Yeah.

Yeah, that was in our Good Read segment. And it's a good read. So very good. So appreciate Brandon's comment. Their leadership behavior is so important. What they do is more impactful than just what they say. And Brandon, you're the father of five, right? I think that's right. Good friend of our company and the show and, and we do some good work together. And that's something I told specifically. My youngest is growing up and I have three stepsons, as you know. And. And I've said forever is, you know, watch what I do and what others do more than what they say. And I think that's a great thought to leave our show on today. Brandon, you can drop the mic for us on that because watch what they do. So good stuff.

Thanks, everybody. I appreciate. I'm sorry for. I apologize for our LinkedIn time zone issue. We will definitely correct that for future weeks so that we don't get canceled by LinkedIn at the last minute. So, yeah.

Yep, good news. Well, we've got the recording. Those of you listening on the podcast, thank you. Those with live. I think we still have a lot more people we might have thought with us live today. Our recordings, the live recordings are there on the Lead Smart technologies page on YouTube, Facebook and LinkedIn. If you're on any one of those, hit. Hit the. Like the follow and the subscribe button would be very beneficial to us. Get this message out to more people. And if you're listening on the podcast, we thank you. For coming on a regular basis. If you're not subscribed to the podcast, please do so. And the best thing you could do to help others get the access to this information would be by leaving a review as well, and we're appreciative of that. So on that note, Tom Burton Kevin Brown Co Founders Lead Smart Technologies Wishing you a great weekend. Be kind, enjoy, be safe, do good.

Things, have a good weekend. Thanks everyone.

We hope you enjoyed today's episode and our guests. Each week we try our best to dig into the topics that are impacting your business, so please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often. And even guests you'd like to see join us. We're looking forward to bringing you next week's session and hope that until then you stay safe, stay focused, and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation and and finally, please check out our sponsor, Lead Smart Technologies and their manufacturing and wholesale distribution Industry CRM Customer Intelligence and channel collaboration platform. That's Lead smart technologies@leadsmart tech.com.