Canadian Electrical Wholesaler

 

November 7, 2018

David GordonDavid Gordon

The Channel Marketing Group / William Blair Q3 2018 Pulse of Lighting Report shows that the lighting market continued its strong growth during the summer.

Feedback from over 200 electrical distributors, manufacturers and manufacturer reps / lighting agents showed correlated input that the market grew by slightly more than 5%. Unit sales were approximately 1% higher.

Key market segments for growth continue to be the small to mid-sized renovation markets and the industrial lighting markets. The new construction market was reported as slow.

Price erosion was nominal, even in light of announced price increases as most if not all of the increases focused on non-LED products. Tariffs had no or limited impact in Q3, with most announcing price increases that will take effect in Q4 and perhaps have some impact in Q4 but more likely in Q1 2019.

While lighting conglomerates such as Acuity, Eaton Lighting, Hubbell Lighting, Philips Lighting, Cree and Rab have introduced “contractor grade” lighting offerings to retake lost market share in the “white goods” markets where there has been significant price pressure, distributor feedback suggests that success has been nominal. This is further validated with distributors reporting that these companies’ share of distributor purchases continued to erode, down to 56% of distributor sales (although some of this could be accounted for by a difference in the respondent base).

Respondents from all three categories continued to emphasize that marketplace pricing pressure continues to inhibit revenue growth.

Over 60% of distributors report that their backlog has increased, which is a good indicator of future revenue performance. However, only 23% reported that they have increased their inventory levels. It is somewhat surprising that, given the talk of tariffs, that more distributors did pre-order “basic” products in advance of the tariffs in the hopes of capturing momentary incremental profitability. This may say something about the willingness to take inventory risk in the lighting category.

Lighting controls continue to be quoted with projects by distributors with 35% of distributors reporting that more than 31% of their projects are quoted with lighting controls, either through an independent company such as Lutron, Leviton or Legrand, or as a system sell. This area of expertise represents a sales and margin opportunity for distributors.

Additional input

  • There were some comments regarding component shortages and inventory / supply chain issues, although this could be supplier specific.
  • The large project market, nationally, is only “fair.” However, this is very marketplace specific with a few urban areas very robust.
  • Sales performance appears to differ between manufacturer reps and lighting agents, with lighting agents more focused on branded sales and larger projects whereas manufacturer reps are more prevalent in the retrofit market and smaller initiatives. Manufacturer rep lines also have a tendency to be more cost-competitive and contractor-oriented rather than aesthetically focused and specification-oriented.
  • Industry participants commented that there is no brand loyalty, especially at the contractor level, and that distributor salespeople are more focused on “taking orders off the street” rather than supporting brands.
  • TLED pricing continues to decline
  • There are continued new product introductions, almost to the point that some participants commented that the pace is too fast to keep up with, although this is the source for many manufacturers’ growth.
  • According to an industry recruiter, hiring by lighting manufacturers remains strong.

And there were a number of comments regarding tariffs although many questions. (for more on our thoughts on tariffs, click here: www.electricaltrends.com/2018/09/could-tariffs-masquerading-as-price-increases-be-good-for-the-electrical-industry.html.

Expectations for Q4 across respondent types is for continued strong growth. Sales projections range from 4.15% to 5.65%

Thank you to all of the distributors, manufacturers and reps / agents who participated in this quarter’s survey. Survey respondents received a complimentary advance copy of the results. To purchase the detailed report for only $19, click here: www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=5M8PRWXEQ4RD8.

With lighting representing a significant percent of a distributor’s sales, and in excess of 20% of electrical distribution industry sales, growth in this sector is a key driver of overall industry performance as well as distributor profitability. With GP$ per unit sold declining over the past few years, which has driven distributors’ chase to more unit sales to stabilize profit dollars, the key remains identifying opportunities to proactively convert retrofit opportunities. Niche marketing and business development initiatives to accelerate conversions is critical to 2019 success as lighting sales growth is difficult when “bidding” for new construction projects. As the adage goes, “the early bird catches the worm.”


David Gordon is President of Channel Marketing Group. Channel Marketing Group develops market share and growth strategies for manufacturers and distributors and develops market research. CMG’s specialty is the electrical industry. He also 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.  

Read More

 

 

 

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.

Read More

 

 

Changing Scene

  • Prev
  Hammond Power Solutions Inc. has announced its intention to discontinue and close its ...
Murray Chamney, President, Intralec Electrical Products Ltd., has announced his retirement, ...
Mark your calendar for the Coalition event of the year! Come for an evening of networking, the ...
Recognized for her career as a business leader and innovator, passionate about people, technology ...
Michael Sudjian will move into the new role of Vice President of Logistics for Sonepar Canada ...
Hammond Power Solutions has appointed Jonathan Gorham as Business Development Manager – Western ...
Electrozad has enhanced its process solution capabilities by creating and launching a process ...
Luminaire Led will operate as a standalone division and maintain its operations in Edison, New ...
Effective January 1, 2019, Ramy Yousif assumes the position of Rexel Atlantic’s General Manager.
This past summer, from July 1 to September 15, AD Rewards ran the Redeem for a Dream promotion.

 

 EFC Announces 2018 Marketing Awards Winners

2018 Marketing Awards WinnersElectro-Federation Canada (EFC)’s Marketing Awards program recognizes member organizations that demonstrate marketing excellence and innovation within the Canadian electrical manufacturing and distribution industry. Winners of this year’s awards were recognized at EFC’s 8th Annual Future Forum, held earlier this month. (Shown in photo: EFC President and CEO Carole McGlogan with representatives from Bartle & Gibson, winners of the Integrated Marketing Award — distributor under $50 million.)Electro-Federation Canada (EFC)’s Marketing Awards program recognizes member organizations that demonstrate marketing excellence...

Read More

 

 

Peers & Profiles

  • Prev
On a regular basis, our publications profile members of our industry through their responses to a ...
First and foremost, sitting down with Susan Uthayakumar feels more like sitting down and conversing ...
Sales of electrical supplies from full-line electrical distributors capture the geographic ...
Laura Dempsey has been working as an outside sales representative for E.B. Horsman & Son for ...
Michael Gentile, President and CEO of Philips Lighting Canada, has had a long and distinguished ...

 

 Young Leaders: Taylor Gerrie

Taylor GerrieOn a regular basis, our publications profile members of our industry through their responses to a Q&A. It’s a way of recognizing industry movers and shakers, and helping our readers get to know them better. 

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.

Read More

 

 

 

 

Susan Uthayakumar, President of Schneider Electric Canada: Driving Success

Susan UthayakumarBy Owen Hurst

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.

Read More

 

 

 

 

Looking Back

  • Prev
The best memory I keep from CEDA is the way that they accepted me when I came into the business. ...
In the 1930s to 1940s, CEDA’s Western Canada membership was very stable with old line independent ...
Prior to the late 1950s there was little if any involvement in CEDA by the so-called “national ...
  As 2017 marks the 150th anniversary of Confederation, we take a look back at an aspect of ...

Looking BackThe best memory I keep from CEDA is the way that they accepted me when I came into the business. The welcome they gave to me, all of them men. (In those days there were not many women in business.) This welcome I will always remember. CEDA has played a very important role in my success.

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.

Read More

 

 


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.

Read More

 

 

 

Copper $US Dollar price per pound

Kerrwil Publications

538 Elizabeth Street, Midland,Ontario, Canada L4R2A3 +1 705 527 7666
©2018 All rights reserved

Use of this Site constitutes acceptance of our Privacy Policy (effective 1.1.2016)
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Kerrwil