Canadian Electrical Wholesaler

May 14, 2020

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. Surveys have shown, depending on the industry, that 60+% are looking forward, which is positive.

Coinciding with this is the phased reopening of the economy. The electrical industry, in most markets, has been fortunate that a vast majority of states allowed some construction to continue, and much industrial also continued, thereby enabling some commerce to occur… and even if there is a spike in hospitalizations, it is expected this would continue to some degree. The benefit… financially secure distributors, well positioned in key customers and markets, have had a revenue stream to support their efforts, albeit at a reduced rate. And we know some whose April 2020 was better than April 2019!

The key is managing and planning, simultaneously

Part of this is also considering the surrounding market, so we thought we’d share some marketplace research from different sectors to provide market sector overviews:
• Hotel construction — Did you know that there were 214,740 hotel rooms under construction in 2020? That’s the highest end of month total ever?

However, Hoteldesign.net reports that the industry expects these projects to take longer than projected as there isn’t demand for the hotel inventory (know people traveling?) Further, 9 projects that were in final planning moved to deferred status as did 21 others that were in the planning status. Another 8 projects were stopped. 28% of the rooms are for New York, Las Vegas, Orlando and Los Angeles / Long Beach. Consider this a construction indicator. If the project isn’t funded, it could be delayed or abandoned. This is the concern that many in the construction trades have for Q3, Q4 and 2021 Q1.

• Dodge construction — Dodge’s April Momentum Index is out: www.construction.com/news/dodge-momentum-index-trips-on-COVID-19-April-2020. It looks backwards from a planning viewpoint but could be indicative of future spend. All of the indices declined. Overall, it declined 6%, the commercial building segment declined 7.6%, and the institutional market declined only 3.2%. So, education and government declined less, most likely due to these projects being funded. The Momentum Index is viewed as a 12-month predicator of future non-residential building spend. While it highlights that planning activity declined, some could also be businesses closed or WFH involved less activity, especially since this was the beginning of the pandemic as well as a major planning market (NYC) was in lockdown.

• Dodge released an update on Public Bidding opportunities: www.construction.com/toolkit/coronavirus-map-active-bidding It was up 9% (as of April 21) from the prior 7 days, which could be an indicator or people “back to work” from their initial reaction of lockdown. There are almost 16,000 projects in the database, however, Dodge mentions that “projects are being moved out”. Impact on distributors and manufacturers: get ready for “perpetual quoting/bidding.” Multiple rounds, lots of excess work with contractors/GCs hoping pricing declines. Lots of chasing after a smaller and smaller set of funded opportunities.

• Business confidence index can be a precursor of spend. Businesses, in general, need to feel optimistic about their future for them to be confident in spending money. While they may have needs (i.e., MRO expenditures, preventative maintenance, emergency work), are they investing into their future as a business confidence index infers that CapEx monies would be allocated? Look to local information for a business confidence index for your area… and perhaps back test information vs. sales performance. Look for trends. Taking this the next step, there is the possibility of creating a customer confidence index for yourself. And for those serving contractors, an index can ask for their anonymous insights in a couple of key areas that could be correlated to longer-term activity. ITR Economics talks about their 3/12 and 12/12 trend lines. Factoring in a customer confidence index could be another indicator.

• Consider the implications of the price of oil. While many immediately think of the impact in selected markets, the economic implications ripple into other segments. Low oil prices reduce spending in these areas, and hence investment into commercial construction as well as result in layoff, which drive down consumption, and that consumption impacts companies outside of the oil producing areas. Further, companies that make equipment for oil producing areas are not always in those areas. So, if you sell to industrial or OEM companies, know what your customers make to understand their business dynamics. This is the importance of understanding SIC/NAICS codes for your customers (and if your salespeople have time, they should be learning this, if they haven’t already).

We’ll continue to share other macro business drivers that we see. These will translate into, and for leading companies, are translating, into considerations in their planning processes. There are opportunities, there are challenges, coming as the market shifts. Things to consider include (in no order):

1. Business process automation to enable cost-effective scalability
2. A changing salesforce and how to manage them (let alone where are they)
3. Reconfiguring offices
4. Price pressures
5. Role of eCommerce
6. Availability of talent
7. Performance-based marketing
8. Tiering of customer benefits as well as customer (and read “distributor” segmentation)
9. RSM and rep dynamics (in the age of virtual, what are the skills needed of an RSM?)
10. Communicating value proposition to strengthen position (build a moat) and enable customer acquisition / conversion
11. Engaging unassigned accounts / mid-small accounts (either perceived or actual)
12. How to make employees feel safe
13. Ideas to consider in a reopening

And more.

Providing help

Recognizing that companies need to minimize discretionary spending but can benefit from a third party perspective as well as additional insights, we’re accepting short-term engagements to share ideas to discuss many of these areas (and others that may be specific to you.) Or, another alternative is our Lumiere service, which is a heavily discounted telephone advisory service; http://channelmkt.com/wp-content/uploads/2017/01/original-lumiere_2017.pdf

Sometimes you just need either a unbiased view, confirmation or fresh ideas.

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.

Economy EmploymentAs a result of widespread measures taken to contain the spread of COVID-19, the Canadian economy contracted 11.6% in April, following a 7.5% drop in March. By the end of May, many businesses had begun to adapt to the new reality by shifting to teleworking, reducing hours, laying off staff, applying for government funding or seeking rent relief.

As pandemic-related restrictions were gradually lifted throughout the summer, the business climate began to improve slightly. For example, real gross domestic product grew 1.2% in August, the fourth consecutive monthly increase, which continued to offset the steepest drops in Canadian economic activity on record that were observed in March and April. 

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Swati Vora-PatelBy Swati Vora-Patel

“As a distributor, we need to build capabilities around experiences, data and the technologies that are driving change… It’s important that we listen, experiment and help lead our customers forward.” Chief Marketing Officer, Distributor — from the book Innovate to Dominate: The 12th Edition in the Facing the Forces of Change Series

Mapping your company’s digital transformation begins with an outside-in approach. 

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COVID AirBy Angela Jamieson and Marc Laplante

The importance of clean air has been thrust into the spotlight with the emergence of COVID-19 and the rapidly spreading infections related to it. Examples have emerged around the world showing how aerosols may be playing a role in transmission; the choir practise in Washington State where over 80% of their members were infected (primary or secondary)1 after their final practice before shutting down for COVID restrictions, or the restaurant in Guangzhou, China where COVID-19 was theorized to have spread according to the air movement from an air conditioning system2. 

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Carol McGloganBy Carol McGlogan


When it comes to marketing and customers, some things never change, while some things are always evolving! The parts that never change for marketers are that we need to be where our customers are, when they need us, and with the right information. The parts that are in constant flux are our customers’ buying behaviours and the technologies available to intervene and influence the customer experience.

COVID-19 has forced us all into new habits both personally and in business. For instance, social isolation has caused us to rely more heavily on technology to fill in the gaps. 

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Changing Scene

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Zigbee AllianceThe Zigbee Alliance, an organization of hundreds of companies creating, maintaining, and delivering open, global standards for the Internet of Things (IoT), announced an important movement within the Project Connected Home over IP initiative, forming a team dedicated to the development and promotion of the standard for commercial markets.

This move is in alignment with the overall vision for the initiative, which is to develop and promote the adoption of a new, royalty-free connectivity standard, simplifying development for manufacturers and increasing compatibility for customers and consumers.

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EatonPower management company Eaton Corporation plc announced that earnings per share were $1.11 for the third quarter of 2020. Excluding charges of $0.05 per share related to acquisitions and divestitures and $0.02 per share related to a multi-year restructuring program, adjusted earnings per share were $1.18.

Sales in the third quarter of 2020 were $4.5 billion. Organic sales were down 9 percent, and the divestitures of the Lighting and Automotive Fluid Conveyance businesses reduced sales by 8 percent, partially offset by 2 percent growth from acquisitions.

 

 

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CEW Stelpro flextherm 400The Stelpro Group, owner of Stelpro, is pleased to announce that it has acquired Flextherm, the electric floor heating industry. Flextherm was founded in 1991 by Philippe Charron, who brought a new vision to the market. Sustained work with the standard-setting bodies made it possible to revolutionize the industry by certifying heating cable installations directly on plywood, making the technology accessible to a greater number of people.

Many other innovations, including a complete range of heating cable products and controls and focus on quality and service helped build a strong brand over the years and raised the company to the enviable status it has today. 

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Susan Uthayakumar, has been appointed as the global leader for Schneider Electric's Sustainability Business Division, reporting to Chief Strategy & Sustainability Officer, Olivier Blum. 

 

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EFC 2020 Industry Awards

EFC 2020 Industry AwardsWe may not be able to celebrate in person this year, but EFC would like to invite you to their premier Industry Awards in a new and exciting virtual format. 

This year’s Electro-Federation Canada's 2020 Industry Awards will recognize member recipients through a virtual presentation honouring their strong leadership and commitment to contributing to the health of the industry. EFC's National Advisory Council chairman, Steve Branscombe, Independent Electric Supply, will emcee the Awards on Thursday, December 10th, 2020 at 4:30 pm EST.

 

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Peers & Profiles

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Christian Grenier and Mathieu Legris have been leading Electrimat for 10 years. Two friends in life who complement each other at work, and whose company regularly finds itself in the business sections of daily newspapers highlighting their exceptional performance. 

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MercuryBy Blake Marchand

Headquartered in Concord, Ontario, Mercury Lighting services national retail, multi-residential/commercial property management, energy service companies (ESCO), and auto dealerships.

“From design to specifications, we offer turn-key services that go beyond the typical distributor model,” explained Mercury Lighting Vice President, Eric Tordjman. Their value-added approach leverages well-established supplier relations to help clients find a lighting solution that suits their needs.

 

 

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Jason PrevostBy Line Goyette

“Never forget to look at the big picture.” These words of advice are from the father of Jason Prevost, his first mentor, who worked as a marketing specialist. Jason has repeated them often over the past two years during what might have been the hardest personal crisis of his life.

At a time when he was forced to reassess his professional future, his wife and the mother of his two teenage children was diagnosed with a virulent cancer.

 

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