AI in the Merchant Sector: From Early Experiments to Everyday Tools

By Wayne Fraser, Chief Information & AI Officer, Klipboard. Repositioned article for the BMN journal. 

At Klipboard, we’re seeing merchants of all sizes begin to integrate AI into everyday workflows. This shift is not reserved for national operators with deep IT budgets. From local merchants to multi-branch distributors, businesses are deploying AI tools to gain a competitive edge and grow without increasing their wage bill. 

AI has traditionally been seen as a nice to have, but now, with the ability to target persistent challenges across inventory control, service delivery, and decision-making, it’s becoming a must have for many merchants of all sizes.

Tangible impact, not hype

The numbers speak volumes. Research from PushON shows that 49% of UK merchants now rank AI and automation as their top digital priority - a significant shift for a sector traditionally wary of new tech.

Already, 66% of merchants are using AI to deliver personalised product recommendations, 40% are applying it to inventory forecasting, and nearly half use AI chatbots to handle customer queries. These aren’t pilots, they’re operational tools that are already reducing waste, shortening service cycles, and empowering commercial teams with predictive insight.

At Klipboard, we’ve developed our own AI offering covering those exact outcomes - building tools that help merchants move from gut-feel to data-backed decisions, and from firefighting to forward planning.

Tackling long-standing operational pain points

The most successful AI applications in the sector are those that solve long-standing problems. Stock management is a prime example. Traditionally driven by instinct and historical averages, it’s a function that’s ripe for optimisation.

Klipboard’s AI-led intelligent inventory managements tools integrate with ERP One, our industry leading business management solution, to analyse historical sales, seasonal variation, and even external data like local weather patterns to deliver sharper demand projections. That means less overstock, fewer stockouts, and improved cash flow - all without adding complexity.

Similarly, AI is reshaping how merchants approach logistics. Route planning tools, like Klipboard Transport Management (VIGO), are now powered with an AI-led auto-routing engine, combining live traffic and delivery data to optimise delivery drops. That helps fleets run leaner, use less fuel, and maintain higher service levels - all essential in a cost-sensitive environment – and almost impossible to achieve without AI intelligent technology.

Customer service is evolving too. At the trade counter and online, AI-powered assistants are helping staff answer common questions on stock, pricing, and deliveries - fast. These tools don’t replace staff - they support them. They handle the repetitive queries and routine sales enquiries so teams can focus on what really matters: building stronger customer relationships and driving more value for the business out of customer interactions.

Making AI accessible to the trade

Despite the momentum, barriers to adoption remain. Concerns about cost, complexity, and internal skills are valid. According to the ONS, AI adoption across the merchant sector still lags the national average.

That’s why, at Klipboard, we’ve focused on embedding AI into the systems merchants already use - not bolting on a separate layer of complexity. Our solutions are practical: demand forecasting, purchasing recommendations, intelligent stock classification, customer and competitor insight tools and virtual sales assistants - built directly into your existing workflows.

“There’s a lot of noise about AI – but in many cases, it’s just old automation with a new label. What has changed is the processing power availability has grown year on year and also ‘LLM’s capability and availability, thus enabling a much richer experience, which Klipboard is leveraging in its products to bring AI into merchants’ workflows.” says DJ, Chief Product Officer at Klipboard.

At Klipboard, we’re applying AI in ERP One where it delivers measurable impact: reducing manual effort, improving decision-making, and helping merchants stay ahead in a competitive market. We’re also exploring the next evolution – agentic AI – where systems start to take action, not just offer suggestions. We’re not interested in hype for hype’s sake. Our focus is on building capability that’s practical, trusted, and genuinely moves the dial.

DJ, Chief Product Officer at Klipboard.

Strategic priorities for the years ahead

The next phase of AI in the merchant space won’t be driven by radical transformation projects - but by smart, targeted moves, that start with building data confidence: improving product and customer data, upskilling teams to work with AI assistants, and choosing partners who offer more than just tools - but real-world expertise.

At Klipboard, we continue to work closely with our customers across the builders' merchants sector to ensure our AI tools evolve with their needs. Whether it’s predicting the right stock levels for Q4, surfacing hidden sales opportunities, or refining purchasing strategies, our focus remains the same: giving merchants actionable insights where it counts.

Final thoughts

AI won’t transform the merchant trade overnight – but the conversation is no longer theoretical - AI is already reshaping how the most forward-thinking businesses operate. 

For builders’ merchants navigating tight margins, complex logistics, and high service expectations, AI isn’t just a technological evolution. It’s become a business-critical tool that’s fast becoming a competitive necessity.