COVID-19 Was Just a Catalyst for the Change We’re Seeing — New Markets, Products and Customers

June 29, 2021

By John Kerr

At this time of year my colleagues and I here at Kerrwil are in the final throes of producing Pathfinder, the annual benchmarking report we publish in collaboration with Electro-Federation Canada (EFC). After reviewing the changes and the recent acquisitions and moves of the past year through the lens of COVID, I share below some notes on milestones of the past year. They provide context for what I see as a new direction the industry may be taking.

• EFC actively pursues as members automation distributors, EV smart charging equipment suppliers, and electrical engineering service providers.

• Deschenes, already having a strong plumbing and HVAC business, adds electrical expertise to the company by acquiring Powrmatic (November 2020) and Daltco (February 2021).
• Rexel invests in acquiring WESCO’s Utility business in Canada (February 2021).

• Guillevin moves aggressively to acquire both WESCO Datacom business (February 2021) and Quebec-based Dubo (March 2021).

• Gerrie Electric invests in an 80,000 sq. ft. warehouse and distribution centre (April 2020).

All these moves made with the final announcement August 6, 2020, that WESCO’s merger in Canada was reality following the initial announcement in December 2019.

I won’t comment on the individual moves by all these companies as they speak for themselves, but when we look at them collectively we might see the future.

Reading into this more it became evident to me that the effects of COVID, the speed with which the industry responded to them, and the changes they have brought have only completed a shift in the thinking of distributors across Canada.

While the effects of COVID on the workforce, supply chain, pricing, social governance, and government policy, became quickly evident, the move to greener energy, and smart home technologies were driving change before March 17, 2020. Said another way, we got here faster because of COVID but the path was already set.

In the past year there was a mass move to digitalization with online transactions growing upwards of 400% here in Canada, while many channel partners digitalized customer pick-ups at lockers opened by cell phones.

Counters became less the place to be, replaced by more flexible pick-up times and delivery strategies, smarter logistics, and a digital customer experience focus.

End users are driving more sustainability with moves to greener alternatives while moving to reconfigure offices as employees remain hunkered down at home.

Perhaps the milestones show us to look to connectivity as a new driver, and to product mix changes at the electrical distributor, such as more sensors and more types of control.

Clearly now it’s the power of the digital interface, the drive for more technical mindsets and approach, a move to training and product knowledge, and a desire for some to broaden their product solutions offerings.

This time of COVID will be marked not only for its disruption but for an accelerated transition among electrical distributors to green technology, energy efficiency and automation (both home and manufacturing) as the new product drivers moving forward. Logistics and supply chain mindsets are now closer to the customer, more efficient and more digital. Let’s look too, to market mix changing in future — electrical vehicles are becoming a reality alongside control technology that drives everything from HVAC to lighting, from security to systems monitoring. Bigger projects like the growing footprint of datacentres and larger logistics facilities will continue affecting the product, customer mix and market mix moving forward. Let’s all watch the utility space, the security market, and connectivity of data. Will these be the new markets for electrical wholesalers?

Underlying all this are the people and the teams that drive these businesses. Moving forward, the selling propositions will be more integrated and complicated, driving a need for people who understand the balance between technical expertise customer connections, relationships, and service.

There is lots going on if we read between the lines.

John Kerr is Publisher of CEW; johnkerr@kerrwil.com

Photo: Chris Liverani on Unsplash https://unsplash.com/