Canadian Electrical Wholesaler

Nov 15, 2019

Rick McCartenBy Rick McCarten

Two articles on branding recently caught my attention.

The first was on electric vehicles. Ford Motor Company felt that, as all cars move to electric, the number of moving parts and the complexity of production will simplify, which will result in a reduction in brand importance from 30% to 10%. Your decision to purchase will only be influenced by the brand by 1/10. Nine-tenths of your decision will be based on other factors.

Certainly, there will be more than one way to make an electric vehicle. Any differences will allow companies to separate their brand from others. As an example, one unique way to build an electric car is to send the electricity to four motors that each drive a separate wheel. That reduces the weight and the need for the mechanical distribution of power. Clearly, that would be a selling point over more conventional models but may be not enough for companies to charge a premium.

What Ford is thinking is that taking the complexity out of a product will reduce its mystic. This allows Dyson, who makes electric vacuum cleaners, to also enter the auto industry with the same credibility as Ford and GM. The simpler the production and the more companies use identical parts, the more they will struggle to differentiate their product from everyone else.

The other article, which seems to contradict Ford’s perceptive, was about high-end handbags and clothing. It appears with the softer economy that spending in this area is down. A closer look, however, shows this spending was down overall, across all luxury categories (with one exception). The highest luxury brand in each category tends to be up in sales. Sales for high-end “B” products are down, while the highest-end handbags, shoes, coats, etc. are up. People were opting to spend more money on the “best” products, and not bothering to buy second-tier products.

Contrary to Ford’s perception, branding was proven to be effective.

Years ago, there was an article in Harvard Business Magazine that talked about purchasing behavioural changes. At one point from the 1960s to the 1980s, people who made a certain income drove a certain type of car, lived in a certain neighbourhood, vacationed in certain locations, and so on. Then things began to change. Regardless of their income, people would drive more expensive cars, while others would take expensive vacations. Marketers could no longer match up potential sales to income. Today, that trend has continued and is even more pronounced.

Purchasing is no longer tied to a family’s income. That shows best when you look at the Canadian personal debt ratio. Today, it is higher than it has ever been. People want the best of something, and they will go into debt for it.

Years ago, when families fit into income categories, anyone buying a Cadillac in a working-class neighbourhood would look out of place and be subject to criticism. People would be more subtle about their purchase and opt to perhaps upgrade from a Chev to a Buick instead. Today, it is easy to see one or two BMWs parked in a single-car driveway, regardless of what the neighbourhood people live in is like.

So maybe both articles are true? Ford Motor Company might be right. Branding will be less important to “B” type products; even high-end “B” types products (like Ford’s Lincoln brand) will suffer because there are other higher, more luxurious vehicles on the road.

The other article also may be right: people willing to make a sacrifice will want to go to the top of the list, to “A” type products, or not bother at all.

For products in the marketplace, this means there is a race to get to number one. If you win, you get to choose your margins. If on the other hand you lose, regardless of the attributes you could find yourself in the commodity pack with no choice but to compete on price.

Rick McCarten is VP, Operations, Electro-Federation Canada.

CEW market research 400By John Kerr

The past nine weeks have been to say the least a challenge across the electrical industry. From agents to suppliers, from end users to the electrical channel, all have been affected, all have been forced to think differently and all have begun the journey to retooling the way we operate.

This is the third report in our series quantifying and exploring how electrical wholesalers have had to adapt and how they are looking to find a way forward. For this we have taken a different approach from our previous reports in that we have incorporated the results from our recent survey alongside personal interviews and discussions with electrical distributor teams across Canada

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arkest Before the Dawn, Part 2

CEW 9 JK Figure 1 700By John Kerr

I spoke in my previous article about my father’s quote darkest before the dawn. Well, he had another saying clearly brought forward by his growing up in the depression. He would say, “Money is not everything. It just helps,” and at a time like this when there are so many storylines of effort above and beyond the call, and so many initiatives underway by electrical distributors, there will be a rallying right across the country. The electrical distributors are moving, reacting, and more adaptable than ever before. 

The current situation we find ourselves in is to say the least fluid, dynamic and somewhat disconcerting for many, but underlying it is a focused, disciplined approach to addressing the new norm and new reality. Some branches remain closed, some open with minimal staff, and others rotating staff and working differently than ever before.

Recent public reports by Wesco and Rexel have indicated drops approaching 23% through mid April and clearly ones that demonstrated a slowdown from mid March. Our discussions with both distributors and end users/contractors alike confirm their buying and purchasing activity were curtailed more aggressively in early April.

Over 106 electrical distributors responded to our recent survey with 73% from corporate and branch management. 

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Gurvinder ChopraBy Gurvinder Chopra

This June, Canadians will commemorate Electrical Safety Month; June also marks the fourth month of the COVID-19 pandemic national lockdown. For many Canadians, working from home has become the new normal. As confinement continues, the demand for constant power feed to connect to the world we now live, work, and play in at home has grown substantially. Homes are being equipped with new technologies that offer plenty of benefits, but they also place high demand on electrical systems at home, potentially causing serious safety risks. 

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David GordonBy David Gordon

In talking with distributors and manufacturers it is clear that many are actively in the planning and pivoting mode, moving from survivability to thriveability. They’ve stabilized their business financially, emotionally (from a staff viewpoint) and operationally. Now they are looking at “doing business,” and more financially secure ones are identifying ways to take share.

This doesn’t mean that others are not planning and pivoting. Some didn’t miss a beat; others typically don’t do much planning and live in the moment. 

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Building Permits - MarchThe total value of building permits issued by Canadian municipalities decreased 13.2% to $7.4 billion in March, with declines reported in seven provinces and two territories. The $1.1 billion national decrease was the largest since August 2014. This reflected notable drops in Ontario (-12.9%), Quebec (-18.1%) and British Columbia (-19.4%), which coincided with efforts to slow the spread of COVID-19.

 Value of residential permits down

The total value of residential permits decreased 13.1% to $4.6 billion in March.

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Changing Scene

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EIN evolve 400As we continue to respond to the changing status with the COVID-19 outbreak, EFC is taking preventative measures to protect conference delegates from any further risks associated with this virus. After much consideration and consultation, the EFC Board has decided to cancel EFC’s Industry Conference in Banff which was rescheduled from late May to September 1 - 3, 2020. This decision was difficult but necessary for the safety of our members, employees, and the community.

One of EFC's key mandates, is to deliver a premier national thought-leadership conference for industry members, partners, and affiliates. 

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Sonepar's Gaurav SharmaA new video featuring Sonepar’s Vice President of eCommerce and Digitalization, Gaurav Sharma, answers COVID-19 related questions regarding Sonepar Canada’s digital solutions, his team, and the future of eCommerce in the electrical wholesale industry.

Among new solutions introduced by Sonepar: customers can now create an online account through a simple text message. Traffic on Sonepar’s website has tripled since the pandemic began, and the number of new accounts has doubled. Many Sonepar locations also feature curbside pick-up.

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Schneider ElectricThe Continental Automated Buildings Association (CABA) is pleased to announce the appointment of Hugo Lafontaine, Vice-President Digital Energy at Schneider Electric Canada. CABA is an international nonprofit industry association that provides information, education and networking to help promote advanced technologies for the automation of homes and buildings.

“We are delighted to welcome Hugo Lafontaine to CABA's Board,” said Ron Zimmer, CABA President & CEO “He brings a stellar background in building systems integration and the building automation market, and a wealth of insight into the digital platforms and solutions that will define smart-building innovations now and into the future.”

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Harold HayesHarold Hayes, a stalwart of the electrical industry, passed away peacefully in Scarborough, Ontario at the age of 90 on May 9, 2020.

Harold joined the industry as an apprentice at age 18, working first for his father’s business, Power Cable Installations, and then for Comstock. Among his later accomplishments, he formed Federal Pioneer Electric’s electric heating division, served as president of the Ontario Electric League in 1985, and while in his 80s consulted for Intellimeter Canada Inc.

 

 

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Peers & Profiles

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Jenny Ng is a Business Development Manager for the Power Solutions Division of Schneider Electric. ...
With over 60-years of experience in the lighting industry, CBC Lighting has established itself as a ...

 

Sarah SilversteinBlake Marchand

Sarah Silverstein is a principal with Liteline along side her two brothers Mark and Daniel. Together, they lead the company founded by their father, Steve Silverstein, who retired in 2018.

Although she initially pursued a career in outdoor education, Sarah was instrumental in the company’s expansion into architectural lighting and the U.S. market. She joined Liteline as a project manager in between stints working in outdoor education. Now she leads Liteline’s U.S. distribution arm and marketing department.

 

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