changing dist landscape 9.22.11
DESCRIPTION
The electrical industry is undergoing significant change that will impact future strategies for distributors and manufacturers. How will you respond to the changes?TRANSCRIPT
Copyright Channel Marketing Group, 201104/12/2023, page 1
The Changing Landscape of Distribution
Copyright Channel Marketing Group, 201104/12/2023, page 2
The Electrical Industry Evolves
Change takes time, and Sometimes there are Hazards
Copyright Channel Marketing Group, 201104/12/2023, page 3
Difference in Perception Drives Change
Mirror mirror on the wall, who is the fairest of them all?
We See What We Want to See
… but Change is Occurring
Copyright Channel Marketing Group, 201104/12/2023, page 4
Electrical Top 200 Electrical Industry Evolves…Still ≈3000 Distributors But
◦ 38-40% Belong in Marketing Groups , 25-30% Industry $ In 2005 Groups Represented 11% of Distributors & 16% of $ Preferred Relationships With 125-150 Manufacturers
◦ National Chains Increased % of Revenue 2005 – Top 5 Represented 26% of Industry Sales 2010 – Top 5 Represented 28% of Industry Sales 2002 – Top 250 Distributors Represented 50% of Sales
#250 was $15M 2005 – Top 200 Represented 60.5% of Market
# 200 was $30M 2010 – Top 200 Represented 56% of Market
#200 was $15M
Copyright Channel Marketing Group, 201104/12/2023, page 5
What is Driving Change? Recession After Affects Construction Outlook Industry Over Capacity Customer Needs “E” for Information & Entree Lack of Succession Investment Needs Non-Traditional Competitors Tax Codes & Incentives
Copyright Channel Marketing Group, 201104/12/2023, page 6
From GraybarWhat would you consider to be the biggest changes you’ve seen the industry face throughout your career thus far?
The biggest change I’ve seen is going on right now. It’s no longer just about products - it’s about listening to customers and focusing on solutions that increase their profitability and help them achieve their long-term goals. We look at current conditions as a tremendous opportunity to demonstrate our value in the supply chain and how we work to our customers’ advantage.
Bill MansfieldVP Industrial & CommercialInterview with Industrial Distribution magazine
Copyright Channel Marketing Group, 201104/12/2023, page 7
A Bakers Dozen Converging1. Generational Issues 2. Size Captures Market Share3. Diversification of Business / Market Segments4. Managing Sales Differently5. Internet6. Vertical Marketing / Selling7. Role of Sales
Orchestra leaders & Account Managers vs Sales & “Milk Runs” Specialists – Market Segment / Application
8. Services / Solutions Focus9. Communicating Your Message, Identifying Markets, Understanding
the Customer … Marketing10. Supplier Relations vs. Purchasing / Buying11. Operations
Technology Applications & Improved Inventory Management
12. Access to Capital13. Tax Issues
Copyright Channel Marketing Group, 201104/12/2023, page 8
Acquisition Issues
Recession Realities Coming to Light
Business Outlook Lack of Diversification Technology Investments Generational Issues Quick Opportunities for
Growth
IES to Sonepar Yale (PA) CED City (IA) to 3E HD Supply Electrical Canada to
SESCO (Sonepar) Heintz to Springfield Teknikor to Horizon Solutions Key to Elliott Treadway to Elliott Broken Arrow Branches to
Crescent Central Wholesale to Alameda Midstate (VT) to NESCO AVAD to Graybar D&D Tool to OneSource RECO to WESCO TVC to WESCO EMSCO to Shealy HD Supply HVAC to Hajoca EDI to Shealy
Copyright Channel Marketing Group, 201104/12/2023, page 9
Customer Issues Less Time, More to Do Product Costs Comparable More Companies Selling The Same Thing
◦ Distributors & Manufacturers … Less Differentiation
At Times Transactional, At Times Solution Focus On Business Issues Responsible for More Information Eaters Do Business Differently
Copyright Channel Marketing Group, 201104/12/2023, page 10
Sales Type of Salespeople
◦ Order Takers, Account Managers, Solution Providers
Management Role of Relationships Products vs. Solutions = Value Sales, Marketing & Training
Engagement Price Management ≠Selling Role of CRM Data Analytics
Copyright Channel Marketing Group, 201104/12/2023, page 11
Marketing Customer Insight Integral to Strategy Development Brand Management Beyond Promotions & Communications Involved with Supplier Relations & Purchasing
• Category Management• Vertical Marketing• Marketing Communications• Catalogs• Promotions• Events• Call centers
• Promotions• Events• Collateral• Catalogs
• Databases• Data Analytics• Brand Management• Social Marketing• Supplier Planning• Strategy• and more
Roles of Marketing
Was Now
Copyright Channel Marketing Group, 201104/12/2023, page 12
Internally
• Need Low Cost to Serve / Invoice• Automate Repetitive Steps• Technology Serves Productivity• Staff that Can Manage Technology & Multi-Task• Invest for Success…Let Technology Drive Processes
RDC / CDC’s ERP System People Management
Systems EDI / VMI Wireless Warehouse /
Dispatching eInvoicing / ePayment Inventory Management
Systems Price Management
Call Centers eStore / eCatalog CRM Category Management
Tools Mobility & Telephony VoIP, iChat, Remote
Monitoring, Knowledge Database
Social Communications Intranet
An Explosion of Technology
Copyright Channel Marketing Group, 201104/12/2023, page 13
Supplier Relations Purchasing ≠ Supplier Relations Automate Transactional Purchasing Focus on Business Drivers Measure Performance & Profitability Ask Yourself, And Them … What is Their
Distribution Strategy – Today & Tomorrow Level of Relationship The Whole Package
◦ Product, Support, Field Resources, Commitment
Copyright Channel Marketing Group, 201104/12/2023, page 14
Serving Different Distributors Differently
Focus
Sales
• Limited Geographic• One / Few Market Segment• Product Specialist or Service
Specialist• Target Marketing/Service Focus• Technologically Adept• Willingness to Invest• Succession Question
• Multiple Geographic Areas• Few Market Segments• Broad Product Offering• Disjointed Marketing• Limited Value-Added Services• Decentralized Operational Platform• Succession May Be Question
• Multiple Geographic Areas• Diversified Market Segments• Broad Product Offering• Effective Marketer• Range of Value-Added Services• Strong Operational Platform• Planned Succession
• Limited Geographic• One / Few Market Segment• “One Arm Paper Hanger”• Marketing?• Technologically Challenged• Limited Financial Resources• Succession Question
Most Distributors
Niche Accelerators
Lifestyle Transactional
Copyright Channel Marketing Group, 201104/12/2023, page 15
As a Manufacturer As a Distributor
How Should I Deploy My Resources to Support
My Customers
Where Do I Want My
Company to Be
Tomorrow?
Copyright Channel Marketing Group, 201104/12/2023, page 16
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For More Information on How Channel Marketing Group Can Help You, Contact:
David Gordon919-488-8635
www.channelmkt.com www.electricaltrends.com