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.

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

Read More 

 

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. 

Read More 

 

 

 

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. 

Read More

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. 

Read More

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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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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