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?

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Changing Dist Landscape 9.22.11

  1. 1. The Changing Landscape of Distribution<br />
  2. 2. The Electrical Industry Evolves<br />Change takes time, and Sometimes there are Hazards<br />
  3. 3. Difference in Perception Drives Change<br />We See What We Want to See<br />… but Change is Occurring<br />Mirror mirroron the wall, who is the fairest of them all?<br />
  4. 4. Electrical Top 200<br />Electrical Industry Evolves…Still ≈3000 Distributors<br />But<br />38-40% Belong in Marketing Groups , 25-30% Industry $<br />In 2005 Groups Represented 11% of Distributors & 16% of $<br />Preferred Relationships With 125-150 Manufacturers<br />National Chains Increased % of Revenue<br />2005 – Top 5 Represented 26% of Industry Sales<br />2010 – Top 5 Represented 28% of Industry Sales<br />2002 – Top 250 Distributors Represented 50% of Sales<br />#250 was $15M<br />2005 – Top 200 Represented 60.5% of Market<br /># 200 was $30M<br />2010 – Top 200 Represented 56% of Market<br />#200 was $15M<br />
  5. 5. What is Driving Change?<br />Recession After Affects<br />Construction Outlook<br />Industry Over Capacity<br />Customer Needs<br />“E” for Information & Entree<br />Lack of Succession<br />Investment Needs<br />Non-Traditional Competitors<br />Tax Codes & Incentives<br />
  6. 6. From Graybar<br />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<br />
  7. 7. A Bakers Dozen Converging<br />Generational Issues <br />Size Captures Market Share<br />Diversification of Business / Market Segments<br />Managing Sales Differently<br />Internet<br />Vertical Marketing / Selling<br />Role of Sales<br />Orchestra leaders & Account Managers vs Sales & “Milk Runs”<br />Specialists – Market Segment / Application<br />Services / Solutions Focus<br />Communicating Your Message, Identifying Markets, Understanding the Customer … Marketing<br />Supplier Relations vs. Purchasing / Buying<br />Operations<br />Technology Applications & Improved Inventory Management<br />Access to Capital<br />Tax Issues<br />
  8. 8. Acquisition Issues<br />Recession Realities Coming to Light<br />Business Outlook<br />Lack of Diversification<br />Technology Investments <br />Generational Issues<br />Quick Opportunities for Growth<br />IES to Sonepar<br />Yale (PA) CED<br />City (IA) to 3E<br />HD Supply Electrical Canada to SESCO (Sonepar)<br />Heintz to Springfield<br />Teknikor to Horizon Solutions<br />Key to Elliott<br />Treadway to Elliott<br />Broken Arrow Branches to Crescent<br />Central Wholesale to Alameda<br />Midstate (VT) to NESCO<br />AVAD to Graybar<br />D&D Tool to OneSource<br />RECO to WESCO<br />TVC to WESCO<br />EMSCO to Shealy<br />HD Supply HVAC to Hajoca<br />EDI to Shealy<br />
  9. 9. Customer Issues<br />Less Time, More to Do<br />Product Costs Comparable<br />More Companies Selling The Same Thing<br />Distributors & Manufacturers … Less Differentiation<br />At Times Transactional, At Times Solution<br />Focus On Business Issues<br />Responsible for More<br />Information Eaters<br />Do Business Differently<br />
  10. 10. Sales<br />Type of Salespeople<br />Order Takers, Account Managers, Solution Providers<br />Management<br />Role of Relationships<br />Products vs. Solutions = Value<br />Sales, Marketing & Training Engagement<br />Price Management ≠Selling<br />Role of CRM<br />Data Analytics<br />
  11. 11. Marketing<br />Customer Insight<br />Integral to Strategy Development<br />Brand Management<br />Beyond Promotions & Communications<br />Involved with Supplier Relations & Purchasing<br />Roles of Marketing<br />Now<br />Was<br /><ul><li>Category Management
  12. 12. Vertical Marketing
  13. 13. Marketing Communications
  14. 14. Catalogs
  15. 15. Promotions
  16. 16. Events
  17. 17. Call centers
  18. 18. Databases
  19. 19. Data Analytics
  20. 20. Brand Management
  21. 21. Social Marketing
  22. 22. Supplier Planning
  23. 23. Strategy
  24. 24. and more
  25. 25. Promotions
  26. 26. Events
  27. 27. Collateral
  28. 28. Catalogs</li></li></ul><li>Internally<br />Call Centers<br />eStore / eCatalog<br />CRM<br />Category Management Tools<br />Mobility & Telephony<br />VoIP, iChat, Remote Monitoring, Knowledge Database<br />Social Communications<br />Intranet<br />RDC / CDC’s<br />ERP System<br />People Management Systems<br />EDI / VMI<br />Wireless Warehouse / Dispatching<br />eInvoicing / ePayment<br />Inventory ManagementSystems<br />Price Management<br />An Explosion of Technology<br /><ul><li>Need Low Cost to Serve / Invoice
  29. 29. Automate Repetitive Steps
  30. 30. Technology Serves Productivity
  31. 31. Staff that Can Manage Technology & Multi-Task
  32. 32. Invest for Success…Let Technology Drive Processes</li></li></ul><li>Supplier Relations<br />Purchasing ≠ Supplier Relations<br />Automate Transactional Purchasing<br />Focus on Business Drivers<br />Measure Performance & Profitability<br />Ask Yourself, And Them … What is Their Distribution Strategy – Today & Tomorrow<br />Level of Relationship<br />The Whole Package<br />Product, Support, Field Resources, Commitment<br />
  33. 33. Serving Different Distributors Differently<br />Focus<br />Niche<br />Accelerators<br /><ul><li>Limited Geographic
  34. 34. One / Few Market Segment
  35. 35. Product Specialist or Service Specialist
  36. 36. Target Marketing/Service Focus
  37. 37. Technologically Adept
  38. 38. Willingness to Invest
  39. 39. Succession Question
  40. 40. Multiple Geographic Areas
  41. 41. Diversified Market Segments
  42. 42. Broad Product Offering
  43. 43. Effective Marketer
  44. 44. Range of Value-Added Services
  45. 45. Strong Operational Platform
  46. 46. Planned Succession</li></ul>Most Distributors<br />Lifestyle<br />Transactional<br /><ul><li>Multiple Geographic Areas
  47. 47. Few Market Segments
  48. 48. Broad Product Offering
  49. 49. Disjointed Marketing
  50. 50. Limited Value-Added Services
  51. 51. Decentralized Operational Platform
  52. 52. Succession May Be Question
  53. 53. Limited Geographic
  54. 54. One / Few Market Segment
  55. 55. “One Arm Paper Hanger”
  56. 56. Marketing?
  57. 57. Technologically Challenged
  58. 58. Limited Financial Resources
  59. 59. Succession Question</li></ul>Sales<br />
  60. 60. As a Manufacturer<br />As a Distributor<br />Where Do I Want My Company to Be Tomorrow?<br />How Should I Deploy My Resources to Support My Customers<br />
  61. 61. For More Information on How Channel Marketing Group Can Help You, Contact:<br />David Gordon<br />919-488-8635<br />dgordon@channelmkt.com<br />Visit Our Industry Blog<br />Visit Our Website<br />www.electricaltrends.com<br />www.channelmkt.com<br />

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