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Changing Dist Landscape 9.22.11

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The electrical industry is undergoing significant change that will impact future strategies for distributors and manufacturers. How will you respond to the changes?

The electrical industry is undergoing significant change that will impact future strategies for distributors and manufacturers. How will you respond to the changes?


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  • 1. The Changing Landscape of Distribution
  • 2. The Electrical Industry Evolves
    Change takes time, and Sometimes there are Hazards
  • 3. Difference in Perception Drives Change
    We See What We Want to See
    … but Change is Occurring
    Mirror mirroron the wall, who is the fairest of them all?
  • 4. Electrical Top 200
    Electrical Industry Evolves…Still ≈3000 Distributors
    But
    38-40% Belong in Marketing Groups , 25-30% Industry $
    In 2005 Groups Represented 11% of Distributors & 16% of $
    Preferred Relationships With 125-150 Manufacturers
    National Chains Increased % of Revenue
    2005 – Top 5 Represented 26% of Industry Sales
    2010 – Top 5 Represented 28% of Industry Sales
    2002 – Top 250 Distributors Represented 50% of Sales
    #250 was $15M
    2005 – Top 200 Represented 60.5% of Market
    # 200 was $30M
    2010 – Top 200 Represented 56% of Market
    #200 was $15M
  • 5. What is Driving Change?
    Recession After Affects
    Construction Outlook
    Industry Over Capacity
    Customer Needs
    “E” for Information & Entree
    Lack of Succession
    Investment Needs
    Non-Traditional Competitors
    Tax Codes & Incentives
  • 6. From Graybar
    What would you consider to be the biggest changes you’ve seen the industry face throughout your career thus far?The biggest change I’ve seen is going on right now. It’s no longer just about products - it’s about listening to customers and focusing on solutions that increase their profitability and help them achieve their long-term goals. We look at current conditions as a tremendous opportunity to demonstrate our value in the supply chain and how we work to our customers’ advantage.Bill MansfieldVP Industrial & CommercialInterview with Industrial Distribution magazine
  • 7. A Bakers Dozen Converging
    Generational Issues
    Size Captures Market Share
    Diversification of Business / Market Segments
    Managing Sales Differently
    Internet
    Vertical Marketing / Selling
    Role of Sales
    Orchestra leaders & Account Managers vs Sales & “Milk Runs”
    Specialists – Market Segment / Application
    Services / Solutions Focus
    Communicating Your Message, Identifying Markets, Understanding the Customer … Marketing
    Supplier Relations vs. Purchasing / Buying
    Operations
    Technology Applications & Improved Inventory Management
    Access to Capital
    Tax Issues
  • 8. Acquisition Issues
    Recession Realities Coming to Light
    Business Outlook
    Lack of Diversification
    Technology Investments
    Generational Issues
    Quick Opportunities for Growth
    IES to Sonepar
    Yale (PA) CED
    City (IA) to 3E
    HD Supply Electrical Canada to SESCO (Sonepar)
    Heintz to Springfield
    Teknikor to Horizon Solutions
    Key to Elliott
    Treadway to Elliott
    Broken Arrow Branches to Crescent
    Central Wholesale to Alameda
    Midstate (VT) to NESCO
    AVAD to Graybar
    D&D Tool to OneSource
    RECO to WESCO
    TVC to WESCO
    EMSCO to Shealy
    HD Supply HVAC to Hajoca
    EDI to Shealy
  • 9. Customer Issues
    Less Time, More to Do
    Product Costs Comparable
    More Companies Selling The Same Thing
    Distributors & Manufacturers … Less Differentiation
    At Times Transactional, At Times Solution
    Focus On Business Issues
    Responsible for More
    Information Eaters
    Do Business Differently
  • 10. Sales
    Type of Salespeople
    Order Takers, Account Managers, Solution Providers
    Management
    Role of Relationships
    Products vs. Solutions = Value
    Sales, Marketing & Training Engagement
    Price Management ≠Selling
    Role of CRM
    Data Analytics
  • 11. Marketing
    Customer Insight
    Integral to Strategy Development
    Brand Management
    Beyond Promotions & Communications
    Involved with Supplier Relations & Purchasing
    Roles of Marketing
    Now
    Was
  • Internally
    Call Centers
    eStore / eCatalog
    CRM
    Category Management Tools
    Mobility & Telephony
    VoIP, iChat, Remote Monitoring, Knowledge Database
    Social Communications
    Intranet
    RDC / CDC’s
    ERP System
    People Management Systems
    EDI / VMI
    Wireless Warehouse / Dispatching
    eInvoicing / ePayment
    Inventory ManagementSystems
    Price Management
    An Explosion of Technology
    • Need Low Cost to Serve / Invoice
    • 29. Automate Repetitive Steps
    • 30. Technology Serves Productivity
    • 31. Staff that Can Manage Technology & Multi-Task
    • 32. Invest for Success…Let Technology Drive Processes
  • Supplier Relations
    Purchasing ≠ Supplier Relations
    Automate Transactional Purchasing
    Focus on Business Drivers
    Measure Performance & Profitability
    Ask Yourself, And Them … What is Their Distribution Strategy – Today & Tomorrow
    Level of Relationship
    The Whole Package
    Product, Support, Field Resources, Commitment
  • 33. Serving Different Distributors Differently
    Focus
    Niche
    Accelerators
    • Limited Geographic
    • 34. One / Few Market Segment
    • 35. Product Specialist or Service Specialist
    • 36. Target Marketing/Service Focus
    • 37. Technologically Adept
    • 38. Willingness to Invest
    • 39. Succession Question
    • 40. Multiple Geographic Areas
    • 41. Diversified Market Segments
    • 42. Broad Product Offering
    • 43. Effective Marketer
    • 44. Range of Value-Added Services
    • 45. Strong Operational Platform
    • 46. Planned Succession
    Most Distributors
    Lifestyle
    Transactional
    • Multiple Geographic Areas
    • 47. Few Market Segments
    • 48. Broad Product Offering
    • 49. Disjointed Marketing
    • 50. Limited Value-Added Services
    • 51. Decentralized Operational Platform
    • 52. Succession May Be Question
    • 53. Limited Geographic
    • 54. One / Few Market Segment
    • 55. “One Arm Paper Hanger”
    • 56. Marketing?
    • 57. Technologically Challenged
    • 58. Limited Financial Resources
    • 59. Succession Question
    Sales
  • 60. As a Manufacturer
    As a Distributor
    Where Do I Want My Company to Be Tomorrow?
    How Should I Deploy My Resources to Support My Customers
  • 61. For More Information on How Channel Marketing Group Can Help You, Contact:
    David Gordon
    919-488-8635
    dgordon@channelmkt.com
    Visit Our Industry Blog
    Visit Our Website
    www.electricaltrends.com
    www.channelmkt.com