Put two electrical distributors, two manufacturers and an independent manufacturers’ rep on a stage in a panel discussion at a national industry conference. Fire a few questions at them about private labeling, the economy, product launches and the challenge of finding and hiring good employees. It’s a proven formula for some spirited conversation about key challenges facing the electrical wholesaling industry.
That’s exactly what happened at the annual conference of the National Association of Electrical Distributors (NAED), in Washington, D.C., on May 7. Panel participants were Stuart Thorn, Southwire Co., Carrollton, Ga.; Sandra Rosencrans, City Electric Co. Inc., Syracuse, N.Y.; Roy Haley, WESCO Distribution Inc ., Pittsburgh; Kirk Hachigian, Cooper Industries, Houston; and Jack Floyd, One Source Associates, Columbia, Md. John Duda, Butler Supply Inc., Fenton, Mo., moderated the panel.
Private labeling was a big topic of discussion. Southwire’s Stuart Thorn is very familiar with the impact private labeling can have on a market because of his years of experience in consumer marketing. He said despite the popularity of private labeling in the grocery business, they have not and will not ever take over that market.
Thorn also had some interesting insight into the impact Home Depot has on different market segments outside the electrical industry. He said when Home Depot first got into carpet installation, smaller retailers in that market were worried that it would dominate the business. But Home Depot only wins three out of every 10 quotes for carpet purchase and installation, and smaller carpet retailers realized they could still flourish going after those other seven quotes. Some carpet retailers even moved their stores right next to Home Depot to capture the business of the consumers who were going to Home Depot for quotations.
On the subject of new product introductions, Jack Floyd of One Source Associates and Sandra Rosencrans of City Electric Co. urged electrical manufacturers to spend more time thinking through their new product marketing strategies and the impact they have on distributors and reps. They say neither party is looking for new products that don’t offer any discernable advantages over products already on distributors’ shelves, and that electrical manufacturers need to give distributors and reps ample time and resources to ramp up for launches. Floyd participated in the development of product launch guidelines issued by the National Electrical Manufacturers Representatives Association (NEMRA), Tarrytown, N.Y. He also is involved in home audio, a relatively new market niche for mainstream reps and distributors, and says that flat-panel television installations in homes may be a very exciting opportunity for the electrical market because it’s a business that electrical contractors can expand into with relative ease.
Panelists were bullish about the future of the U.S. economy. Roy Haley, WESCO’s CEO and a director of the Cleveland Federal Reserve, said the U.S. economy is stronger than many people think because it has withstood the run-up in materials prices, the housing market slide and the sub-prime mortgage crisis. He believes that in past economic cycles any of these problems by themselves may have triggered a serious downturn in the economy. Hachigian of Cooper Industries agreed and said there’s a fundamental strength in the commercial market, and that as utilities rebuild the U.S. power grid it will create many sales opportunities for the electrical market.