The Distribution Blog

Most distributors think of merchandising as catalog management. Something to maintain. Something you do after the “real” strategic work is done.

But at Grainger, merchandising is the strategy. 

In a recent episode of In the Mind of a Distributor, Brian Walker, Grainger’s Chief Product Officer, explained how the company treats merchandising as a core growth lever and why that mindset shift matters for any distributor, whether you're managing 2 million SKUs like Grainger or 20,000.

Here’s what stood out and what any distributor should take away from the conversation.

Start with customer context, not products

The foundation of effective merchandising starts with understanding your customer's world before considering what to sell them. Brian Walker emphasizes that a strong merchandising strategy should map customer context to their specific needs, then work backward to product selection, pricing, and brand decisions.

In other words, this approach means asking: what industry does this customer operate in? What problems are they trying to solve? What constraints do they face? Only after answering these questions should you determine which products, at what price points, and with what brand positioning will serve them best.

Real-world example: During the episode, Brian shares how when he was recently meeting with Boston's transit authority, he discovered they needed chainsaw clothing for clearing pathways. That’s not a typical Grainger segment, but by understanding the customer's operational context (forestry work within transportation infrastructure), Grainger identified an opportunity to expand its assortment strategically and was able to get the MBTA the products they needed.

Mine your sourcing data for product insights

Your sourcing requests are a goldmine of merchandising intelligence. When customers call asking for products you don't stock, that's not just a one-off transaction; it's market research telling you where to potentially expand.

Walker describes sourcing as "rich ground" for identifying which products deserve a place in your core assortment. The key is systematically analyzing these signals rather than treating each request as isolated. Look for patterns across customer requests, examine your sourcing files regularly, and use this data to inform assortment decisions.

This bottom-up approach complements top-down strategic planning, ensuring your merchandising stays grounded in actual customer demand rather than assumptions about what they might need.

Invest differently based on assortment strategy

Not all SKUs deserve equal attention. Brian Walker draws a clear distinction between how Grainger approaches its core 2 million SKU business versus Zoro's endless assortment model: investment per SKU.

For core products that represent your strategic focus, invest heavily in:

• Deep product expertise and detailed specifications
• Rich content and product data
• Competitive pricing strategies
• Brand relationships and market positioning

Focus on your core products first. Then, worry about long-tail products. These products serve specific (read: fewer) customer needs so don't warrant the same level of merchandising investment as your strategic core.

Master product data to enable discovery

With massive assortments, findability for distribution reps and customers is everything. Brian Walker emphasizes that merchandising excellence requires becoming an expert in the products you manage and collecting the right information to help customers navigate differences between similar items.

The goal is helping customers understand not just what products exist, but which product solves their specific problem in their particular industry. This means:

• Harmonizing product data across related product sets
• Identifying what makes products different from each other
• Providing industry-specific guidance
• Offering use-case-driven recommendations

Brian Walker notes that Grainger has been building detailed data models since 2014-2015, preparing for the day when AI could leverage this information at scale.

He shared the principle: "Build the right snowflakes so you can build the right snowballs." This requires creating clear, accurate data models that you can then repurpose to build new systems and workflows with AI.

Navigate brand strategy thoughtfully

Brand decisions in merchandising involve tradeoffs. Carrying recognized brands creates customer confidence and satisfaction since people know what they're buying. But it also means competing on price in a transparent market.

Brian Walker acknowledges these dynamics exist across the industry, with different distributors taking different approaches. The key is understanding that when you stock branded products, you must be prepared to maintain competitive pricing across your full assortment. With 2 million products, this requires systematic approaches to pricing management, not just ad-hoc adjustments.

Leverage AI to accelerate merchandising work

AI is transforming how merchandising teams operate. In our conversation, Brian shares several applications:

1. For assortment development

Large language models can accelerate standard merchandising work by analyzing market signals, processing product information, and identifying what makes products unique or valuable to specific customer segments.

2. For product identification

‍Multimodal AI and computer vision help identify products in the field, whether in inventory management services or branch locations. What started as a customer-facing visual search tool has become a valuable tool for internal product identification. This is a good reminder that merchandising technology investments can create value in unexpected ways.

3. For expertise augmentation

‍Instead of replacing human expertise, AI gives merchandising experts the resources to be more productive. Walker is clear: "I don't see us ever not relying on mastery or expertise [of people]. I see our expertise being augmented by large language models and data science."

The bottom line

Merchandising isn’t just a task to check off. It’s one of the most important ways distributors serve customers and grow the business.

Here's what most effective teams consistently get right:

• They start with customer needs. Every assortment decision is grounded in real customer context: what they’re trying to do, not just what they’re asking for.
• They treat sourcing requests as signals. Instead of one-off transactions, sourcing requests are mined for patterns that guide where to expand the core assortment.
• They invest more in the SKUs that matter. Not every product gets equal attention. They focus resources on high-impact SKUs that shape the customer experience and drive margin.
• They master product data. Great merchandising means making it easy to find the right product, not just for customers, but for reps. That starts with clean, harmonized, well-structured data.
• They use AI to boost productivity, not replace people. AI helps expert teams move faster, identify gaps, and surface insights, but it works best when layered on top of solid human judgment.

Grainger’s competitive edge didn’t happen overnight. It’s the result of years spent building merchandising muscle: investing in product knowledge, customer understanding, and data infrastructure that scales.

If you want to grow faster and serve customers better, look at Proton PIM to help you upgrade how you merchandise.

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