The Changing Customer Persona: Impacts on the Electrical & Automation Market

Swati Vora-Patel

Oct 18, 2021

By: Swati Vora-Patel, Electro-Federation Canada

“Putting customers first”. This adage requires no explanation but has become more critical today than ever before. The pandemic has placed tremendous pressure on product supply and demand, lead times and service requirements, resulting in a new customer persona that businesses must contend with to save market share.

The electrical and automation industry is at an important crossroad – and only one path will lead our channel towards growth. This path sets out new customer preferences and expectations that have emerged from this pandemic. EFC’s latest industry research explores changes in customer purchasing preferences by examining the following questions:

• How do customers prefer to source product information?

• Where do customers prefer to buy products from?

• What impacts do the changes have on our channel, post-pandemic?

EFC partnered with Kerrwil Publications to survey with over 1,000 electrical and automation customers in Canada to understand how current experiences in the market are shaping new requirements moving forward. The trends uncovered through the survey results depict how customers’ needs have evolved and how the changes might impact your business strategy.

How do customers prefer to source product information?

Electrical contractors prefer to source product information online rather than from sales reps, indicating that our channel’s vast and varied digital content is well-accepted and preferred over traditional methods:

• Top three choices: distributors’ websites (43%), manufacturers’ websites (41%) and via search engines such as Google (41%)

• Reliance on sales reps for product information is diminishing; less than 30% of respondents chose sales reps as their go-to-source

• Over half of all respondents said they prefer to receive email communications from distributors to learn about new products and services.

This data showcases the shifts that are in motion among contractors. Our research shows that system integrators and industrial OEMs still rely on sales reps for product information: over 60% of system integrators and over half of industrial OEMs surveyed said they source information directly from sales reps, likely due to technical expertise requirements these customer cohorts may have.

Where do customers prefer to buy products from?

This pandemic has accelerated digital transformation in most sectors, and our electrical market is no exception. Electrical distributors have added and/or updated e-Commerce platforms to serve customers more efficiently – and this transformation has been a welcome change for contractors and online

purchasing is continuing to rise. According to Pathfinder, the electrical industry’s benchmarking report, online sales in 2021 is said to be approaching $800M in Canada . Our survey results showed that 40% of contractors purchase from distributors’ sites and over two-thirds expect to buy at least 20% of their products online from distributors in the next 12-18 months.

Industrial OEMs have traditionally preferred online purchasing. Our survey showed that 80% currently purchase from distributors’ sites and over 20% will continue to make most of their purchases online in the coming months. The acceleration of e-Commerce platforms among contractors and OEMs is full-speed ahead!

According to our research, 80% of system integrator survey respondents said they prefer to purchase products at branches and 18% don’t expect to make any online purchases. Again, this might be due to the technical expertise this cohort requires from distributors.

What impacts do these changes have on our channel, post-pandemic?

As we begin to emerge from the aftermath of the pandemic, what customer changes can our channel expect to see? It is no surprise that supply chain issues have caused the biggest market share shift in our industry. All product categories have experienced shortages, and as a result, many customers have broken spec and sourced alternative products from new and or existing suppliers to meet end-user demand.

In fact, 54% of the contractors surveyed said they have sourced alternative products from new suppliers – while many of the new suppliers are within our channel, a growing proportion is external to our channel: offshore suppliers (34%), retail/DIY stores (30%) and third-party eCommerce providers (36%).

What’s even more alarming is that over 70% of contractor respondents said they will likely continue sourcing products from new suppliers once supply issues have been resolved. Your business may be on the side that is benefitting or on the side that is losing, but regardless, a market shift is taking place among contractor customers, signalling a cautionary time for our industry.

With the right supply chain and customer strategy in place, there is still time to save this share.

Mapping Your Customers’ Journey

‘Putting your customers first’ will require a more progressive stance as you review and review strategies for a new year. Examine how the impacts and opportunities shared in this article and through our research work impact your customers’ journey – and what measures your organization will need to address to engage with the changing customer persona who is inclined to source information and purchase products in new ways.

For more information on this research study, download the executive summary.

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