66. The Future of B2B Commerce: Why Digital Strategy Matters More Than Ever | Mark Brohan, Digital Commerce 360

Karthik Chidambaram: Hello everyone. Welcome to a new episode of the Driven
by DCKAP podcast. I'm your host, Kartik Chidambaram, CEO of DCKAP. We make
systems talk to each other for manufacturers and distributors.

We are here in Chicago, Illinois. We are with Mark Brohan, Senior Vice
President at Digital Commerce 360. Mark, welcome to the Driven show. Excited
to be chatting with you.

Mark Brohan: Thank you for having me.

Karthik Chidambaram: So Mark, I was reading about the work you have been
doing, and it's very fascinating. You consider yourself as a journalistic
researcher. Can you talk about that?

Mark Brohan: Well, I like to say that dinosaurs still roam the earth and I'm
one of them because I sometimes see myself as maybe the historian of
e-commerce because, I go back to the very beginning of both Business to
Consumer and B2B.

We launched the internet, we launched Internet Retailer magazine in 1998 and
I was the founding editor. And that was right when the early movement for
all this began and there was a handful of players. That was two years into
Amazon's mission. And then Paul Demery, who I call my wingman and good
friend, we began covering B2B e-commerce, which at the time was EDI about
the time there was serious interest in marketplace movements, circa 2000 and
the dot-com crash.

We have been basically curious journalists covering e-commerce for going on
our third decade. So there's not much we haven't seen. I'm not surprised by
a lot of stuff these days, but you know there's distinct trends in B2B and
now you can see the timeline, the evolution timeline for me in B2B.

That is not nearly as extensive or as deep rooted as B2C, but still there's
a timeline. And if we want to chat about that, I can tell you exactly where
we're at these days.

Karthik Chidambaram: And with Internet Retailer, you were also covering B2B
then, or was it, I thought Internet Retailer was mostly B2C, correct?

Mark Brohan: Well, our roots are, our roots are in business too, our roots
are in online retail as we call it and B2C, but still, I mean, early on, you
know, there were merchants like the office supply guys, you know, back in
the day, Staples, OfficeMax, Office Depot, which all have different names
for the most part now, they were primarily selling more to a small business
owner than they were to a consumer.

But Grainger goes back that far. You know, cause arguably their Grainger to
this day is still probably the closest thing to a B2C site episode
experience. And then Simon, you're going to see, so there's always been
merchants that have gone through, through both channels. So it was mostly,
it wasn't very complex, it wasn't very complex orders back then.

There were just simply no systems, no technology, no integration, no
strategy for that to happen. Back in the beginning, it was all very small
things that could be packaged up and delivered and included office supplies
for one, envelopes for another. So yeah, it's not new, but it's not as
accelerated as it once was all those years ago.

Karthik Chidambaram: Since your work, you have been covering a lot of
commerce and you also work with a lot of companies seeing what they're
doing, a lot of technology companies and all that. What makes a great
commerce platform or how can a company adopt a commerce platform that gives
them a leading edge.

Mark Brohan: Well, I like it. I'm not afraid to express an opinion to this
day. There's a lot of companies, big, small, and otherwise manufacturing
distribution, B2B focused retailer, that still literally sell the shoot
themselves in the foot. It's not the technology. If anything, the technology
today is better, cheaper, faster than anything that was its predecessor.
Sure. And so one of the things about technology is eventually is e commerce
where reinvents itself every, every, very often, you know so if you look at
the B2C timeline, it used to be that you would need a cool million dollars
to put up a very high end side and only the big retail chains or those.

Publicly traded companies like, I don't think they're around anymore.
Anyway, they had the top pockets for that. Why? Because it was a commercial
platform, but it was lots and lots of integration. So the smaller, the mid
size guys, they may do with, you know, the technology they could afford or.

The technology they built or both just in B2C, what changed the game circa
2008, 2009 was the advent of subscription based e-commerce platforms, if you
will. So now, the playing field got leveled. So technology was no longer an
indicator of the haves and the have nots, because if you planned your
technology the right way, you could have an, you could have a site that
looked, acted, felt like Amazon.

So the shift. Became not in technology as a space race to win the customer.
It became all about the customer experience. Now, B2B is a little bit
different, but I was talking about this timeline. It's there. So the one
misnomer that a lot of people to this day still have is that the term
e-commerce when applied to business to business is just that it's just a
term.

And I can say why that is. Because literally digital commerce is a much
better, much more target, much more effective, much more definitive term
than e-commerce. And the fact of the matter is, a typical business buyer
uses anywhere from 5 to 11 channels to do a digitally driven business
equation with pretty much sellers, all up and down the timeline, all sizes,
if you will.

Now that was not always the case. So a lot of B2B companies to this day will
still sell for, you know, their sales arm, they could get fed leads
digitally offline, what have you, if you will. And then what they would call
their e-commerce app or for a lot of companies, it's just their catalog
locked behind a firewall with a log.

And that's what they call traditionally commerce. So a lot of companies, for
many, many years, focused on those three channels. So if they thought of
e-commerce or digital commerce, they thought of just the site, just the app,
you know, the technology that people come to look at my catalog and my best
price behind the firewall.

So there's been platforms for that for a long, long time. To this day,
there's platforms for that, for a long, long time. My point to you is that
the playing field for technology in B2B is now on kind of the same timeline
as referred to as online retail just a second ago. What I mean by that is as
more AI comes into play, as more cloud based solutions come into play, as
more headless types of connections come into play. What that’s doing is
changing the technology mix that a B2B seller has to take advantage of these
days.

So the technology is affordable, but it's more complex than ever because one
of the core problems that's still keeping a lot of companies from becoming
competitive within this opportunistic digital commerce environment is the
fact that their data is still locked away in siloed legacy systems.

That's a problem today. So if you look at the mix of the 18 trillion B2B
sales economy, which includes everything a manufacturer does, and then a
distribution that does, then the equation is about 60-40, meaning 60 percent
of that in some way, shape, or form is electronic. And the bulk of
electronics today is still what passes for EDI transactions.

So 40 percent of the transactions out there are still manual and that's
changing. And it's accelerating, but still, it's still about a 60-40 mix.
Now 80-20 mix a 70-30 minutes now, 60-40, maybe next year it'll be 65-35,
depending on how things go, but companies still to this day need to kind of
get the backend system in place, get the data in place before they could
begin to go out and meet that new digitally minded buyer who's coming at
them from 3 to 11 channels.

So tonight at your event. We'll spend a few minutes kind of talking about
the user experience and that impacts your core question, which is, you know,
what's the best e-commerce platform where a lot of companies have tried and
failed over time is that they think the platform is the be all to end all to
service their digitally driven customer, if you will.

So that's not quite the case. It might service one arm of that. You know,
remember if- you've got your branch network. You've got your Salesforce
network. You've got, which is still primarily offline for some places. Plus
you got that e-commerce site and the e-commerce app. So you might have
pretty good technology just driving, you know, that e commerce site or that,
that portal behind the firewall, if you will, that you put in place a bland
more, a brand new state of the art custom platform you're very proud of, but
the fact of the matter is where a lot of companies are losing the space
race, technology and otherwise is twofold.

There is still a lot of integration that needs to be done across the board
to this new genre of B2B buyer who is younger, digitally driven. And as I
mentioned, they do business across anywhere from 5 to 7, up to 11 different
channels. And my point to you is every one of those is still digitally
driven.

So I'll give you, for instance, maybe let's pick Grainger out of the blue,
you know, who's got a fantastic website, all that kind of good stuff. Maybe
they want to go to a Grainger branch to kind of pick up what they need. But
chances are that 9 times out of 10, that procurement team, that procurement
manager is digitally driven, where they're going to begin their research
online.

And another thing about the user experience, it's called the shots today.
It's called the technology shots that companies have to put in play. It's
dictating where the sales are going, how fast they're going. And frankly,
the haves and the have nots, which is. If you don't think of your e-commerce
technology strategy all the way through across 11 different omni channel
segments, so to speak, you're losing out.

And to this day, there are companies that are doing fantastic jobs of
getting that right, and a lot of companies to this day, they're still
getting it wrong. So a lot of distribution companies are still, even to this
day, very old line in their thinking. And that is changing because their
buyer is thinking, their customer is telling them they want something new.

There's a lot of things that are coming into play here. And the timeline is
that overall e-commerce on the B2B side will grow probably another 15, 16,
17%. I'll do my numbers come end of the year, but that's about the growth
rate that we're still at. Now, if you look at the Department of Commerce
numbers for total manufacturing sales, total distribution sales, it's part
putting along, there's still a lot of pent up business spending, wondering,
waiting for rates to drop, waiting for inflation to cool.

There's a lot of still heads down in the sand trying to wait things out.
Meanwhile, the digital buyer is very clear in what they want. And for the
most part, it's not just a single manager on the team. It's a team. And that
team is made up of three to four to five to seven different buying teams.
And that, and that team within the organization is not just procurement
supply chain, it can reflect five to six to seven disciplines within the
organization, finance, e-commerce, procurement, supply chain, you name it,
that come together as a team. A collective team to do the enterprise wide
procuring for their organization.

So in that case, these teams of buyers, they will spend at least 30 days
looking at who you are before they even think about making any kind of
purchase from you. So they do their homework these days. They will spend a
good month just looking at a site to figure out if indeed you have what they
want. They don't care about price. What they want is ease, convenience, and
then some for placing an order with you. And price is about three or four
items kind of down the list.

Karthik Chidambaram: And you talked about data being in silos and it's very
important that the systems talk to each other. So everybody's empowered and
all that, but distributors sometimes do have a challenge with that. Why
important do you think is integration, the data to be talking to each other?

Mark Brohan: Well, I mean, it's two things. I'll give you a couple of key
examples here. There's a friend of mine and he's kind of one of my
bellwether companies.

I just kind of go to and kind of ask, hey, how's it going? You know, cause
that just kind of tells you. An indicator of how the rest of the marketplace
is going they're a family company, mid sized distribution company. They're
in the electrical components business, been in that business for almost 70
years.

And they've got a strong base with maybe 16, 17, 20 branches across
Virginia, West Virginia, you know, that kind of mid Atlantic region, if you
will. They tried e-commerce three times, their VP of sales at the time came
back from a meeting. It was all about e-commerce stuff.

One of the CEOs said, well, I'll tell you what, I'll tell you what, boss, we
got to train, we got to do this stuff. We got to transition. We got to make
this happen. CEO says, good, go do it. You're the man. Well he rustled the
budget from the CEO, not easy in a family owned company, and it took them
three failed tries and three failed years to get e-commerce right. They went
out, bought a brand new platform, state of the art, got it approved, plugged
it in, and then they found that their data was a mess.

Their catalog was so outdated that the backend was nowhere near anywhere in
shape and form to feed a brand new e-commerce platform. So they had to go
back to spending even more to put in place a brand new ERP. And then once
that backend was finally connected to the front end, it took them two years
to go through a catalog and come up with everything you need across 200, 000
SKUs and then some to plug into a brand new platform.

And they thought they're going to be up and running inside six months. It
took them a three year journey and they failed twice. Now failing the last
time taught them how to do it right. And now they're flourishing. And
they're on top of all that, but that story was circa 2018, 2019. There are
still, there's 7,000 and then some distribution companies in some way, shape
or form that do business across the board in the US. There are still a lot
of companies within that boat.

So, yeah, I mean well cloud, and headless and AI driven stuff eventually
kind of make all that obsolete. Yes, it will, but you know, it won't happen
today. It's not going to happen next year, two, three years. Yes, you're
going to see that.

Karthik Chidambaram: Yeah, totally right. So get the data from different
systems. Make sure the data is up to date and ensure that it flows through
different systems. So the employees are empowered, not just the employees,
even the customers are empowered for better business decisions.

So you also talked about cloud and subscriptions. And one thing, you know,
which we still do find in the industry is, let's say you're going to talk to
a distributor and what's the cost of the software platform going to be? They
still hate the subscription model. Do you see that too?

Mark Brohan: I think it's part of the whole pricing equation because we see
this today, maybe you see it within your customer base, but I can tell you
by just the people that my colleague Paul and I talked to every single day,
business spending is still down.

Technology spending is still down. I'll give you a real, for instance, on
that. If you look at, I mean, AI, I hope the hype over this stuff has gone.
It's been like, what, two years? I think people are kind of sick of hearing
it, but still, you know. AI is a thing, of course, it's a thing, will become
a huge thing.

It will become a bigger thing. I mean, AI is not the you know, the be all to
end all to kind of turn a company into a whole different directions. It's
what you do with the technology to enable you to sell a fire customer.
That's what AI is going to come into play. So my point to you though, is if
you look at the surveys and we do, and I quote a lot of them across, you
know, our, our, our, our news stories here, there's a firm disconnect
between.

You say a priority for our organization. Yeah, you bet. Top two, top three,
top four. Definitely. Okay. When do you intend to do it? A lot of spending
is still downwind, if you will, downhill, if you will, because the budgets
are not there. The eagerness to try anything new is not there. They're still
stuck with their head in the sand until they see which way the economy is
going to grow.

And frankly, it has not been the best couple of three, four years, even post
pandemic for sure. Huge spike in manufacturing sales or let alone
distribution wholesales. So last year was actually negative on a couple of
fronts, but it's hard to generalize what I'm doing here because one man's
feast is another man's famine because it's vertical driven.

I mean, ordering an airplane part is a lot different than picking up, you
know, new supply to go from Fastenal or MSC or from Grainger, so to speak.
So there are ties that bind and. The ties that bind are this, there is
plenty of sales for everyone to go after and thrive if they get their game
plan right.

And getting the game plan right is as simple as, listen to what your
customers want and do the best job you can with the resources at hand to
serve them in a way it's going to make them loyal customers and coming back
to become long term repeat customers. That's where the battle is at today.

So, I mean, a lot of companies look today and see folks like Amazon business
over their shoulder. Should they? Yeah, they should, because Amazon will do
nothing but go deeper and deeper into certain verticals. And so one of my
favorite stories is I'll roll out to a trade show and talk to people on the
record and you think, and he asked me, what do you think about Amazon
business or the, one of these big marketplaces?

Oh, we're not too worried because you know, we've been- only we know what we
can do and we sell widgets and so on and so forth. And then you buy these
guys a beer at the cocktail party. It's a slightly different story. They're
kind of asking you, are these guys making penetration into my vertical?

And in some cases there are, that doesn't matter. What matters is where a
lot of these distribution companies have their edge is they will get the
technology right or else they're not going to sell to that digitally driven
customer out there, but they will. Maybe slower than usual, slower than,
slower than they might like, but they'll get it together.

But the thing is, we're a vertical manufacturing company that wants to sell
online in some capacity, or a distribution company wants to sell online in
some capacity, is that only, they will know their customer better than
anybody else because That's their customer and only they would have the
product knowledge or the inventory to make that sale because that's what the
customers are.

Now, did you, do those customers, even those verticals and those niches want
a much faster, better experience that's digitally driven? The answer is a
resounding yes. So the competition will intensify, but so will the
opportunity. But there's plenty of growth ahead for everybody. I mean, 40
percent of the stuff is still unautomated.

That's, you know, I think I kind of mentioned that. So there's growth out
there, but the growth comes at the risk of not having a sound, robust
e-commerce infrastructure that's linked to digitally driven omni channel
buyers. And an e-commerce strategy that's thought out from everything from,
you know, internal drivers, external drivers, customer service, all the way
through, that's where the success comes in.

You can find the right technology, but if the strategy that's right for your
organization is not in place, then it's just going to be new technology
that's not going to return the ROI. The CEO, CFOs, anybody else in the
company wants to see.

Karthik Chidambaram: Yeah. Have the right strategy in place. I'm just
curious. I mean, I know this varies based on the vertical you operate at,
but what percentage of the total revenue should you be investing in
technology for a distributor or B2B?

Mark Brohan: Once again, it's somewhat hard to generalize because this stuff
is all over the map. I mean, if you look at, you know, if you look at the
Bellwether companies, like Wasco, the HVAC people, they're about 35 percent
now. But Fastenal and Grainger and MSC and Global Industrial, those kinds of
big public, if you will, MRO industrial supply guys, they're 60 to 70%, but
the caveat is that's not just an e-commerce transaction.

These guys lumped everything in as they should so Disney driven sales are 60
to 70 percent of the big guys now for a lot of the smaller people Once again
hard to generalize but I can tell you the companies I talked to they're
getting around 25 percent now. Okay. Yeah, the thing is that's their fastest
growing channel.

Sure, and that's the one where they need to kind of double down because
that's what their audience out there is looking to do. It ain't rocket
science. What these guys out there in buyer land want is cheaper, easier,
faster, just like they go to home and Amazon has something there the next
day or in two days because we're used to that.

They want the same experience in their job. Better, cheaper, faster is what
that business buyer wants.

Karthik Chidambaram: So from your perspective, Mark, what are the top three
things I should be looking at when I'm choosing a B2B commerce platform for
my distribution business?

Mark Brohan: Have you done your homework? You know, what is the ROI on the
platform? In other words, if I spend this technology, if I as a company
spend this money, on this technology- A, does it integrate through all parts
of the organization, all the way out to my end customer. B, does it produce
the, does it give me the ROI that I need to show the bean counters, the CEO
who signs the big checks to, to put this in place.

And then the last part is, does this technology platform enable me to
connect out there across those 5, 7, 11 channels that they're on my customer
base. So a lot of companies get the tech stack, right? They know what they
want, know what they need, know how it's going to go inside, inside the
organization.

They may know, you know, how they will go out to their customer base, what
they want, but it's, it takes time. I mean, it used to be that the average
tech turnaround was about two years. Now it's closer to six months, but I
can tell you that there are still a lot of companies out there, maybe bigger
versus smaller, where they need to spend a lot of time going down the rabbit
hole to figure out the exact purchasing path of their buyers.

So that they're going to put in place brand new technology that that links
out all the way to all those channels where what began as an e commerce
transaction became a punch out transaction, or like with Cardinal Health,
you know, one of the bigger medical distribution suppliers they went through
a three year migration to a brand new platform.

And at the time, Matt Winningham was their B2B commerce guy and we knew him
pretty well. I said, how's it going? I said, three years. What's that? The
thing is they built this brand new site and could you pull off a transaction
as fast as you want? You bet thing is 70 percent of their customer base was
these big healthcare enterprise systems and guess what?

Their top criteria was not how fast the transaction could be processed. What
they wanted was fast, deep site search to find out, what do you want? What's
the quantity, how fast can I ship? So in this case, My point to you is it
was not like they didn't really count coup by how many sales the site itself
made, but it became EDI order after that, just because that was just how
most of their guys did the accounting for it, if you will.

So to them, it was all about the return rate, the repeat customer rate, you
know, the site visits to kind of find out is our new platform giving our
core buyer out there. In this case, an enterprise healthcare buyer. What
they want, how they want it, in stock if they want it, and can it be
delivered.

And it took them, I think, well over two years to migrate. These are big
guys, you know, they think things out of course. But a two year migration
just to get from one site to the other site. And it was not technology, it
was figuring out The customer path to give their enterprise health care
buyers what they wanted.

Karthik Chidambaram: Yeah, the customer path and the different touch points.
Distributors call you for advice. Hey, this is what I'm doing. What do you
think I should be doing? And you've got calls like that.

Mark Brohan: Oh, I don't know. Maybe at this point, maybe at this point we
get a lot of calls, you know, Paul an idea about these kinds of things, but
you know, we're not, I'm not, consultants. We're not consultants.We're just
curious business reporters that know how to tell a pretty good story.

I get, I get a lot of people ask me, well what do you think about this? So I
won't give them, I don't give recommendations, but I'll actually say, well,
I can tell you that, you know, we, we talked to ABC and D for a story that
we did here and this is their experience. So if it’s called sharing
knowledge, I suppose, you know?

Karthik Chidambaram: And how do you think journalism has changed over a
period of time, the last 20, 30 years?

Mark Brohan: I'm not supposed to be here talking to you. I'm supposed to be
like an AI guy, you know, or some kind of, so we're still kicking, but if
you look at my core business, which is I ran my college newspaper and that's
why I fell in love with journalism and I still call it journalism.

I think it's a long forgotten term. I mean, I've been around for a lot of
years. My career began in newspapers. At one point I got my master's in
journalism. I could think of no better calling in life than being a big city
business reporter, you know, New York Times, Washington Post.

That's what you aim for, you know? Well, you know, our paths changed along
the way. So I fell into the technology trade press almost 35 years ago. So
it used to be that there was a market for serious journalism in the trades,
as it were. Especially in e-commerce, but now it's kind of changing.

It's not as fun to do a story because it gets harder and harder to talk to
good people that will share you, you know, with good, with good experiences
to write a decent story that's balanced, has a point of view, that's old
school, old fashioned, balanced, new story your editor would have been proud
of, you know.

Good journalism is still out there. We try and practice it. But you know
what? I mean it's a younger audience and they want their snippets from
social media, from video and all the above. So that's kind of the way it's
going. My point is, there's always going to be a need for good quality
educational content that informs the reader, that helps them do their job
better or execute their business better.

But you know what? It's harder to do in this day and age because there's a
lot of noise out there. a lot of noise out there. So, is there a lot of good
content? Yeah. Is there a lot of bad content? Yeah. So, It's sometimes hard
being a forest being a tree in the forest when The entire model of how our
society gets information level and special information, the good stuff.

Karthik Chidambaram: As an average consumer of news, how do I differentiate
between the noise and the good journalists out there or could good
publications out there?

Mark Brohan: Oh, I think people know. I mean, if you're reading something
that resonates with you, Then, you know what, if it's- if whatever you're
reading, whatever it means, whatever you're watching, whatever you're
reading, whatever maybe charts you're looking at, if that gives you some
kind of understanding that helps you in a way that's going to- ah, that's
why I came here, this is a good read, so on and so forth, you're going to
know.

But you know what? I mean, if you're just reading a, a thinly rewritten
press release, you know, that just with a new, we call it top sheer leads,
if you will, that has no information about, about how this thing is going
and the results to it and the channels, channels that people went through,
then, you know, that's not going to educate you very much. So I think people
just know.

Karthik Chidambaram: So Mark, as you look into the future of B2B, what do
you think are the trends which are in 10 years?

Mark Brohan: Well, there's macro and micro. For instance, you will see a lot
of consolidation to come within, I think the midsize to smaller distribution
industry, if you will, because that's underway.

The pressures on those businesses to stay small and family owned are
increasingly difficult to do. So I think you are going to see a lot of
evolution on that front. The big will get bigger. Now, in terms of the
technology landscape, what's going to happen is you're going to see this
become, I mean, by my count, anything purely e-commerce, transactional
e-commerce, a website, a mobile app. That's about 18 percent of the total.

Let me check that. That's about 15% of all B2B sales today. Now, it's been a
lot of years getting to that 15%. I can tell you that coming into 2019 and
2020, in the early days of the lockdown that we never want to go back to, it
was 8%, 9%, 10%. So the fact is it's achieved, and we're talking trillions
here. I'm talking, almost 3 trillion.

Next four or five six years, you're going to see that approaching 25 percent
because today you're going to see digital sales all across the board.
Accelerate. You're going to see a younger, more digitally driven buyer do
business with the companies that they purchased from.

Across a digitally driven omni channel strategy and not just one or two. So
integration is key. The marketplaces, which we didn't really talk about
here. That was once kind of a nice little sidebar, a nice little niche, if
you will. I have never seen a faster growing e-commerce channel in all my
years of covering any kind of something digital than these B2B marketplaces.

And I'll give just a couple of stats on that to kind of end things. B2B
marketplaces are becoming mainstream and they should be watched for a number
of reasons. Number one, because. That's becoming one of the new channels
that is becoming the go to channel for these digitally driven buyers and
buying teams.

You know, there's numbers to show that, if you will. But one of the more
interesting things that's happening, and I refer back to consolidation,
marketplaces aren't just looking to distribution companies to be their
customers as buyers and sellers. If you look at what the exometries of the
world are doing or the giga clouds of the world are doing or some of these
other fast growing marketplaces, if you will, they're now offering the exact
same capabilities that a distribution company is offering their customers.

So why would a digitally driven buyer want to settle for just one company?
When now here's a marketplace that can offer you the same types of feature
functionality plus financing and then some, and they offer a whole. Industry
to buy from or a wider consortium to buy from that industry than just one
company.

So I think one of the sleeper things to watch is that distribution companies
need to integrate with marketplaces, figure out the strategy for that. If
they don't, they should start doubling down now to a, not to sell them and
to kind of make, you know, make sales on it because that's one of their core
channels or soon will be, but.

Next competition is coming from now. Manufacturers have their own battles to
fight. So one of the terms to keep an eye on here, if you will. One of the
areas that manufacturers, especially even more so than the distribution
companies, still struggle is that last mile logistics today, that anywhere,
anytime buyer means it, they want it anywhere.

So, you know, the B2C guys, you know, the retailing guys, they've had 25
years to figure this stuff out. They know last mile logistics where a lot of
companies are still trying to change and shift the battleship around. Use
that analogy. It's to figure out how to take a traditional distribution
network strategy infrastructure.

I mean, you're a big manufacturing company, no matter what you do. And for a
hundred years, you've been selling through the same pipeline of distribution
companies out to the retailers and then downstream to the consumer. That's
changing. So a lot of companies are still trying to figure out. Last mile
logistics tied to customer service, tied to transparent ordering and
transparent pricing.

And that's where a lot of companies are going to see and spend a lot of time
figuring out the trend, which is. That customer is not just my digital
customers, they want transparency all across the pipeline, all the way out
to when is that thing going to come to the factory floor?

Karthik Chidambaram: Totally. And that's why, you know, it's very important
for the different systems to talk to each other. So you can really,
everybody can get to see what's really happening in the whole.

Mark Brohan: I’ve got to tell you, this one I want to be around to see. I've
been told it's happening, but I haven't found anybody just yet to it. But,
you know. You talk to these guys out there about, Hey, you know, what's the
future of the stuff?

You know, what's future shock look like? And they'll tell you that, forget
it. They don't need you. They don't need me. You don't need a human. I mean,
I have been told, I haven't seen it yet, but I've been told that like, for
instance, like on the auto manufacturing plan, if you will, you're not going
to have a need for a human procurement agent to go and figure out what's
needed and then do the whole digital process to do that transaction. It's
going to be equipped right there within the robot, putting the car door on,
if you will.

So to me, that's interesting, but that is happening. And if you look at one
of the areas where AI will come into play on the manufacturing side, it'll
be how to figure out how to take the human element out of manufacturing.
Make it even more automatic. And that does include the e-commerce part of
all this. You're seeing some engineering stuff now, if you will.

Karthik Chidambaram: And talking about marketplaces, you know, you mentioned
about marketplaces. There are just way too many marketplaces and there are
also vertical marketplaces as well. So how do distributors deal with it? I
mean, there's just so many.

Mark Brohan: Ain't this stuff fun? You know, I mean, you can drive yourself
crazy figuring out how big and complex and fragmented this ends. So we'll,
you know, we'll end on marketplaces here. I mean, 5, 6 years ago, my buddy
Paul and I, we counted 75. We knew who those guys were last year. I'm
counting 750 for my upcoming report on B2B vertical market stuff in
September, October, and next year, in fact, I just did a chart today on it.
I'm projecting a thousand and I know I'm, I'm right now are all those guys
going to make it probably not.

But keep in mind what you're talking about is delivering groups of buyers to
groups of sellers and the term marketplace is just generic, you know,
there's six models, five miles, seven models, depending upon who you talk
and how you explain things. But that's, that's the way things are going. My
point to you though, is consortiums of buyers will do business increasingly.

So. With consortiums of sellers through some kind of localized technology
platform. And that's what you would call the marketplace. And that is going
to do nothing to accelerate.

Karthik Chidambaram: And I would like to end with this question, Mark. What
book are you reading right now?

Mark Brohan: I'm going back and I'm reading an old favorite of mine, it's
called Lonesome Dove. It's by Larry McMurtry. And a lot of people may know
the miniseries from kind of back in the day, but Larry McMurtry wrote this
book.

It goes back to 1985. It is probably the most, it is the best book I've ever
written on the human experience on multiple levels. And I read it once a
year just to kind of refresh my memory on it. So that's my current read.

Karthik Chidambaram: So Mark, I just want to say thank you for your time.
Thank you for being on the Driven show and great chatting with you.

Mark Brohan: I appreciate it. I appreciate this. Thank you for having me.