Canadian Electrical Wholesaler

Marketing

December 4, 2017

The advent of Amazon Business has motivated many distributors to consider the implications of ecommerce, and make investments. To better understand the state of eCommerce within construction and industrial trades, Channel Marketing Group asked distributors for input on their own eCommerce initiatives, as well as how they see Amazon Business as a competitor. Part 1 presented highlights from the report’s overall ecommerce findings. Here in Part 2: Amazon’s influence on eCommerce.

“Amazon Business is regularly reported as a US$1 billion company,” say the study authors, “and we have heard comments that they have surpassed US$2 billion as well as that they are actively targeting the MRO market with a focus on industrial supplies.”

The authors identify at least six different threats to distributors posed by this new “channel”:

  • alternative order entry system for some customers and their distributors
  • standalone business… for a new industry entrant or an existing business
  • direct channel for manufacturers… under their brand or another name
  • means to do business in a broader geographic areas for an existing organization
  • means to offer different products via a marketplace arrangement
  • information resource

“The question becomes, ‘Is this a threat, a complement to the existing business, a new opportunity, or something to be aware of and combat if your business time frame is short-term?’”

Among the questions about Amazon Business that the authors asked distributors in the survey was this: “On a scale of 1 to 10, with 10 being high, how much of a threat to your business — defined as sales that will go from you to Amazon or another "non-distributor" in your industry — do you think eCommerce will be?”

On a weighted average basis, the threat level was perceived as “average.” The authors interpreted this as “credible but not core,” or as “credible but not much of 'my' business,” or “credible but I can adapt.“

Distributors were also asked, “Do you have customers who have told you that they have purchased from Amazon Business?” The response: 61% said they have customers who have purchased some material via Amazon Business.

Asked, “Why do your customers purchase from Amazon Business,” distributors most often responded replied ease and price. However, those were only two of eight reasons.

The study also looked forward, asking distributors what percentage of their business they see Amazon representing. Results varied.

With survey results in hand, the authors then made a series of key value-added observations, and shared e-commerce experiences of individual survey participants. Among the findings: “all consider eCommerce as a retention tool and hope to generate growth through account penetration. Very few also considered it a customer acquisition tool.”

Verbatim experiences of respondents were captured in an appendix. Here’s just one example from a proponent of cCommerce:  “There is always a strong ROI when a company invests in technology to both automate the order capture process from the customer and also integrate those orders into their ERP. Companies that fail to take this step will operate at lower overall profit levels and.”

This is just a sampling of Amazon-related findings in The Channel Marketing Group’s report, “The State of eCommerce Within the Construction & Industrial Markets.” Read more findings in Part 1 www.canadianelectricalwholesaler.ca/latest-news/1876-new-report-ecommerce-within-the-construction-and-industrial-markets-part-1

Find out more about the Channel Marketing Group report: www.electricaltrends.com/2017/10/distributor-perspective-of-state-of-ecommerce-research-report.html

Channel Marketing Group develops market share and growth strategies for manufacturers and distributors and develops market research. CMG’s specialty is the electrical industry. President David Gordon authors an electrical industry blog, www.electricaltrends.com. He can be reached at 919-488-8635 or This email address is being protected from spambots. You need JavaScript enabled to view it..

 

OlsonBy Katrina Olson

A recent CEW article by David Gordon caught my eye. The headline was, Are Your Sales and Marketing Teams Inhibiting Growth?

As a marketing consultant, writer, and trainer, I recognized the challenges and barriers that David was writing about. We agree on many issues (and their causes) facing electrical distributors and marketers. But I also hear from marketing people all the time that the C-Suite is hindering their efforts which, in turn, hinders the company’s growth.  

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2018 Electrical North American MeetingOn October 29-31, 2018, the AD Electrical North American Meeting drew over 1,000 attendees. This event attracted 151 first time attendees and representatives from over 362 companies in the United States, Canada and Mexico.

Attendees benefited from a variety of agenda topics, including: Network Meetings, Emerging Leaders Session, and Country-specific Business Meetings. New to this year’s agenda was a SPA Optimization Workshop led by industry veteran Mo Barsema. In addition, members and suppliers also attended a panel discussion on managing and measuring your digital success.

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 EFC Announces 2018 Marketing Awards Winners

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Peers & Profiles

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Recently we launched an initiative with Electro-Federation Canada's Young Professionals Network to include profiles of up-and-coming leaders. We provided the list of questions below to Taylor Gerrie, Automation Account Specialist at Gerrie Electric Wholesale Ltd. in Burlington, Ontario. Here are Taylor’s responses.

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Susan Uthayakumar, President of Schneider Electric Canada: Driving Success

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First and foremost, sitting down with Susan Uthayakumar feels more like sitting down and conversing with a friend than conducting an interview with the Canadian president of one of the world’s largest electrical manufacturers. Of course, she exudes the confidence and knowledge her position demands, but equally identifiable are an open and engaging nature.

In a recent sit-down, we learned a little about Susan’s history and what drives her to succeed.

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Looking Back

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One year our conference was in Hamilton, Ontario. Mr. Caouillette, our speaker, got lost and instead of going to Hamilton went to Toronto. I think that that was the longest cocktail hour that CEDA ever had… waiting for him to arrive. Certainly that night the head table and everyone were in good spirits.

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Looking BackLooking BackIn the 1930s to 1940s, CEDA’s Western Canada membership was very stable with old line independent companies like Horsman, Ashdowns, Brettell, Marshall Wells, Electrical Supplies Ltd., etc.

Small electrical distributors just were not acceptable for membership as they did not carry the main-line manufacturers’ goods, publish a wiring device catalogue, or employ four to five salesmen as CEDA requested.

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