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In 2024, GTDC launched a series to highlight the rise of artificial intelligence from an IT channel perspective. The first article explored the experiences and expectations of suppliers and distributors around these technologies view the report, including survey results here. Next up is a conversation on the future direction of AI with a respected member of one of GTDC’s key data partners, Tatjana Wismeth, the Head of Distribution Intelligence for NielsenIQ.

The organization, which combined with GfK (Wismeth’s previous organization) in 2024, is a consumer intelligence and global market research organization. NIQ provides point of sale (POS) and distribution tracking in more than 70 countries, with an extensive data collection that allows their teams to build comprehensive reports on the supply value chain along with forecasting and consumer market intelligence.

GTDC - Let’s begin with internal use. How is your team using AI to help IT companies get greater value out of the dizzying amount of information NIQ provides?

Tatjana Wismeth - Certainly, we recently introduced gfknewron® to integrate all our various data sets, including distribution, point of sale and consumer intelligence as well as forecasts. The new platform provides recommendations and insights, transforming its capabilities from a descriptive program to a more prescriptive analytics solution. Our platform enables users to answer key business questions along the supply value chain in just a few clicks. The company also offers strategic consultancy to augment these capabilities through our NIQ Next team, which addresses strategic key business questions and provides C-level guidance.

GTDC - AI has obviously gotten a lot of press over the last couple of years, yet the market is developing somewhat slower than expectations. What are your projections for these technologies in 2025 and beyond?

Tatjana Wismeth - AI is expected to become a $990 billion business by 2027, including hardware and software, according to the latest research. Obviously, there are some hurdles, and IT distributors are stepping up to help vendors and partners overcome those obstacles. With AI-enabled PCs and devices just taking off, the true value of these technologies is not yet completely clear to customers, but they are gaining traction and distribution.

Adoption is diverse across sectors. While consumers may be used to smart devices, the use case and benefits of AI-powered devices and software are not yet well known or understood. Similarly, B2B adoption is inconsistent, possibly due to concerns regarding data security and information storage, as well as the value of the investment. What is becoming clear is that AI is not a one-size-fits-all approach. On the B2B side, it’s about selecting the right solution and the right provider, and this is where consultancy comes into play for both distributors and resellers.

Customer proximity is critical to ensure companies can provide effective consultation and properly address each business case. The value of the AI offerings must also be effectively communicated. Potential buyers need to know that their investment will provide a significant benefit to the business.

The data that AI is built on is also crucial. Even if you have the best model, outcomes will completely depend on the quality of the information it has access to. Both the AI models and their respective training or prompting data should be customized for unique business needs.

GTDC - You mentioned “customer proximity.” What are some of the most meaningful applications of artificial intelligence you have seen so far?

Tatjana Wismeth - A lot of this applies to large language models, but it depends a bit on what you want to do with AI. For example, if you want to create an application in retail to optimize marketing and customer communications, it requires a different approach than if a customer wants to detect errors on a production site or increase product quality. AI is very, very specific, so customer proximity is important, but you also need the right people in place locally to optimize the data sets and provide the best outcomes.

GTDC - There has also been a lot of press around refresh opportunities with the AI-enabled PCs. How much impact do you see these devices having on future revenue projections?

Tatjana Wismeth - Well, I think there needs to be two considerations. First, everybody was hoping that with the launch of AI-driven PCs around the middle of 2024, the market would see some kind of uplift. Unfortunately, that was not the case. Our research actually suggests that the replacement cycle for a PC in now about five years, and most were bought in 2020 during the pandemic, so 2025 is a more likely target. While we are a bit delayed on the potential, I also think this is a two-sided problem. The buzz was quite big, but the actual replacements are just starting. It is now necessary to keep the momentum that was created last year with the release of AI-capable PCs and leverage it for replacements this year.

But it is not purely replacements. The second consideration is to overcome sales barriers. It’s important to remember that while AI has potential, there are concerns as well. From a consumer perspective, for example, it may not be clear why they should spend so much money since AI PCs typically come at a premium. The value must be apparent to the buyer. What differences do they offer from a regular PC? Besides raising awareness, that is another obstacle that still needs to be overcome for many consumers.
One recent study revealed that only 18% of PC users consider AI to be an important purchase factor, and the story is similar to what we've seen in the smart home market. At the very beginning the value wasn't clear to the consumer. What's the benefit of having a smart speaker or a smart washing machine? Also, the concerns were similar, especially regarding data security and usage. It took manufacturers five years to penetrate that market and scale their offerings, so our fingers are crossed that the IT industry learns from that experience to speed the adoption of AI.

Nonetheless, I personally think the development could be similar to smart TVs. There were early adopters, but quite quickly product lines changed, and few “non-smart” televisions were available.  In the end, by default, even if you didn’t want to buy a smart TV, you ended up with one. That could possibly happen in the PC market with AI-enabled devices at some point.

Adoption rates and market penetration are currently increasing. As we can differentiate devices which have both AI CPUs and GPUs or only have one, we already see that AI-enabled PCs are picking up in distribution and at the point-of-sale swiftly. For example, last year in Germany, PCs with an AI CPU and GPU made-up 25% of sales already and the number is rising. However, to fully unlock the market potential, the customer value (B2C & B2B) needs to be very, very clear.

With the rising market demand, the other question is if the premium strategy will work in the long term. Many manufacturers and vendors are targeting the premium sector, which consists of everything above $1000 USD, however, they are also beginning to offer lower price items. That, of course, increases pressure to reduce prices in the market. So, AI offers immense potential, but the question is how the channel and distributors promote and communicate the value to customers to overcome current barriers and concerns, provide relevant consultancy, and help justify the premium uplift.

GTDC - Do you think the uncertainty and perceived value has slowed the refresh cycle in some cases? In other words, are people ready to invest in AI, but not sure which direction to go yet?

Tatjana Wismeth - I think the refresh cycle is kicking in and if you are marketing properly, then it's likely that you're upselling customers to an AI PC. But the value of these offerings must be communicated effectively to make that happen. For B2B AI-investments, it´s a similar story. Enterprises are currently confronted with uncertain and rapidly changing market conditions which leads to hesitation with spending. However, this is exactly the time when you need to invest in your efficiency and agility. AI can help to do so, but the channel needs to clearly communicate how and deliver the value to unlock these investments.

GTDC - I noticed AI optimization mentioned in a few of your recent publications. How does that factor into the adoption of these technologies and the user experience?

Tatjana Wismeth - On the B2B side, I think everything is about optimization and, by default, increasing efficiency throughout the business. We should also consider, especially in Europe and the US, that our society is aging and creating a workforce gap. The baby boomers are retiring, so businesses must continue to optimize their processes and increase efficiencies to maintain productivity levels with fewer workers. AI solutions can help us overcome those bigger picture challenges we face today which are likely to increase over the next five years.

GTDC - How can distributors aid in the introduction and adoption of AI enabled technologies?

Tatjana Wismeth - The good news is that distribution has always forged ahead and paved the way for the future. Distributors are moving fast with AI and play a very critical role in showing (A) what can be done and (B), how it can be done. A lot of this will involve educating and supporting the channel. In the B2B community, it's about identifying projects and finding the right solution provider, especially with the evolving AI landscape. It's no secret how many of these applications are out there (it’s a lot).
In the next couple of years, we expect to see a centralization like we've experienced in other areas of innovation. The distributors play a vital role in selecting and matching the right solutions and providers. They are also uniquely positioned to create and communicate the use cases for AI. For example, applications in the health and medical sector are completely different than for production sites and other verticals, so education in those areas is valuable.

There must also be considerations in terms of how far a client has progressed in their digital transformation. Do they have a managed service provider with distribution providing the backup to help them find the right solutions? In the medical sector, there are different challenges to be overcome with AI, including data security and local peculiarities. For example, we Germans are extremely concerned with data security, so that will be of some concern for AI projects. We've seen similar issues with IoT and cloud business adoption, and some countries worry even more about security than Germany, while others may not care as much. Those factors affect adoption rates and distributors can help solution providers properly handle those barriers to entry, and not just through buzzwords and verbal assurances. They should offer concrete and precise descriptions of how their data will be handled.

GTDC - What types of AI-related resources does NIQ provide for distributors and vendors?

Tatjana Wismeth - We have a landing page dedicated to these technologies with a variety of different resources. One example is our recently launched CMO Outlook report that highlights relevant considerations for chief marketing officers and what they need to know about AI. We also recently added a study highlighting  five applications of AI for the digital shelf and we offer a lot more materials in our resource center.

Aside from those publications, we are applying AI solutions ourselves to improve our client and partner experiences. Our gfknewron® platform basically pinpoints areas where distributors and vendors should be focusing their attention and we also offer strategic thought leadership in this area.

AI is a very prominent current topic, and we provide consultancy around the implications of these technologies. NIQ offers a broad set of resources that vendors and distributors can access and leverage in their operations, and our team can help them find or create other needed programs and materials.