Canadian Electrical Wholesaler

EFC

December 4, 2017

By Swati Patel

Change is a common factor impacting every business today. In the electrical market, the tempo of change is quickening as businesses adjust their products and services to meet new needs. But why are things changing so rapidly?

The rate of change has a lot to do with new customer demands. Concepts such as smart cities, electric vehicles and net zero homes and buildings are driving new socially responsible behaviours among end-users. In turn, this has created opportunity for flexible, efficient systems and applications that interoperate and offer end-to-end solutions at home and at work.

The solutions in demand also require synergy between electrical, IT/data and security systems, which further blurs lines between installation and service roles. A new class of installers and service providers, such as datacomm specialists, system integrators, security-solution providers, electronic distributors and others, have emerged and are filling a void in the market. Many of these new players have electrical skills — matched with IT knowledge of electronics and software — a pairing especially important when we consider the safety, cybersecurity and privacy concerns associated with the new systems and applications in demand.

Enter… the new customer

In the recent report published by Electro-Federation Canada about emerging trends in low-voltage DC power,* several important call-outs were flagged to show the scale of evolution in our market. Consider these recent developments:

  • Cisco partners with electrical manufacturers to offer connected Power over Ethernet (PoE) solutions
  • Armstrong Ceiling Solutions teams up with electrical manufacturers to install LVDC-powered ceiling-based integrated systems for lighting, sensors and controls and other digital devices
  • telcos expand their traditional utility role, e.g. Verizon acquires a lighting controls company and also Yahoo
  • HVAC contractors acquire electrical contractors
  • system integrators make inroads into our industry by offering end-to-end solutions that connect a variety of disparate systems such as power, communications, HVAC, security and fire, lighting, and others
  • niche distributors specializing in electronics, renewable energy and low-voltage solutions are both emerging and evolving

These developments are happening now, and serve as a reminder for the electrical industry to refresh its overall framework to understand new channel players. Let’s take a closer look at two segments that are gaining momentum and beginning to enter our channel’s hemisphere:

  • IT Distributors — this segment supplies servers, data racks, UPS, cooling systems, software and network hardware such as routers and switches. While the electrical channel often provides structured cabling, interconnection, patch panels, etc., the IT channel has typically provided the computing, storage, routing and switching of devices. With the onset of new technologies such as PoE and the Internet of Things (IoT) within the IT space, active switching components continue to be offered by IT, while the electrical player’s role is primarily in structured cabling. In the lighting and Industrial segments, there is more convergence among IT, controls and devices, leading to the IT channel’s greater involvement in the traditional electrical domains of controls and lighting.
  • System Integrators — end users are increasingly relying on this segment to connect disparate products and systems. PC Magazine defines this market segment as “an individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multi-vendor environment.” The role of system integrators has expanded to include a host of other key functions, including process re-engineering, system architectural design, system integration and testing, cybersecurity, and custom application development.

As an industry, we must gain a better understanding of the outside forces that are moving into the inner folds of our channel. Consideration must be given to whether we form relationships with the new emerging players — or do we allow them to become competitors working in isolation from our channel?

Compete or Collaborate?

As manufacturers continue developing new products and solutions to address end users’ needs, they require a channel through which they can quickly and cost-effectively get their products to market. There is a reliance on electrical distributors to adapt their core product and service offerings to meet this requirement. This evolution is imperative if the electrical distribution channel is to be more effective and competitive in a changing market.

Each business will need to determine which path to take as they work toward meeting growing customer demands. Distributors, engineers, designers and installers will need to consider if they want to expand their core offerings to include services currently offered by the new segments, or collaborate with new players and complement one another’s skillsets. The latter is particularly important, as systems become more complex and require integrators to have a deeper understanding of electrical regulations and for our traditional channel to gain more knowledge about the interoperability of products and solutions.

For in-depth insight about new technological trends impacting the electrical industry and subsequent changing customer dynamics, download EFC’s Power Shifts report: http://www.electrofed.com/power-shifts

Swati Patel is Electro-Federation Canada’s, Director of Research & Communications. This article was originally published in EFC’s InfoElectro, Fall 2017

 

* Power Shifts: Emerging Low-voltage Trends, Impacts & Opportunities for the Canadian Electrical Channel. Published by Electro-Federation Canada, June 2017: http://www.electrofed.com/power-shifts

David Gordon

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Design, usability, and search pertain to how you can serve your customer. In order for your website to create value in the eyes of the customers, you have to optimize your website so that it is accessible to the greatest number of your ideal customers. Value increases with the number of customer touchpoints that the customers use.

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