Survey by Channel Marketing/DISC Corp. Reflects Decent Comeback in Electrical Sales
As the industry enters the fourth quarter of what has been a long year, many have sought insight into the industry’s Q3 performance, the outlook for Q4 and some thoughts for 2021.
This year, more than any in recent memory, has been difficult to read the “tea leaves” of the industry. COVID has roiled markets and the traditional industry trajectory, especially given the nature for regional and state specific hot spots. In addition, this summer’s wildfires impacted business on the West Coast, the Gulf Coast suffered numerous hurricanes and social unrest in major cities impacted business in those markets.
However, anecdotal feedback from channel friends regarding Q3 indicates that business, for many, was much better than expected. The industry rebounded, as expected, from Q2 with many companies coming close to recouping the losses they incurred in late Q1 and early Q2. Our definition of “recouping” is achieving if not exceeding levels comparable to Q3 2019. This may still put companies behind 2019 on a year-to-date basis. However, the year is currently not projecting to be the disaster many projected back in April and May.
To support the industry, Channel Marketing Group and DISC Corp. once again teamed up to solicit industry input to crowdsource Q3 performance, Q4 projections and identify key insights for 2021.
We got this input through our proprietary lists and received support from Electrical Wholesaling magazine, through ElectricalTrends and our LinkedIn networks, IMARK Group and NEMRA.
Overall, almost 300 individuals shared their input. Thirty-four percent of respondents were distributors, 27.6% were manufacturers and 36% were manufacturer reps/lighting agents.
In considering performance and outlook, channel participants reported a significant improvement versus Q2 with Q3 being down only a few percentage points versus 2019. Further improvement is expected for Q4, resulting in Q4 2020 being projected as essentially flat versus 2019. Nominal growth is being forecasted for 2021.
As a group, electrical manufacturer respondents saw a -1.31% decline in Q3 2020 and are anticipating increases of +0.19% in Q4 2020 and +2.56% in 2021. Distributor respondents had a -3.06% decline in Q3 2020, and are anticipating a -1.17% decline in Q4 2020 and a +2.96% increase in 2021. Independent reps combined responses were slightly less encouraging. They had a -4.23% decline in Q3 2020, are anticipating a -3.99% decline in Q4 2020 and see a +0.41% increase in 2021.
The caveat, expressed by many respondents anecdotally, is the continuing unexpected impact of COVID which is having influence on the Q4 projected project market (as evidenced in Channel Marketing Group’s Q3 Pulse of Lighting Report) and the possibility of job-site and supply chain interruptions due to personnel contracting COVID.
To get a copy of the complete report, contact David Gordon at [email protected], or Chris Sokoll at [email protected].
About the Author
David Gordon
President
David Gordon is a 30-plus year business-to-business marketing veteran. He spent the first 11 years of his career in the performance marketing industry helping clients achieve goals such as increasing sales and market share, acquiring new customers, improving customer retention, enhancing employee loyalty and building and enhancing brand awareness.
As V.P. of marketing and e-commerce strategies for the IMARK buying/marketing group, he developed strategies to increase manufacturer sales and market share through the group’s members and in helping members enhance their marketing efforts. In 2001, Gordon founded Channel Marketing Group, a marketing consulting firm for electrical distributors and electrical manufacturers. He has worked with distributors in the development and implementation of their strategic plans and marketing strategies, and with manufacturers on market research, market segmentation strategies, customer specific approaches, branding initiatives and distributor portfolio strategies. Gordon is a frequent contributor to Electrical Wholesaling and has written forIndustrial Supply Magazine, Progressive Distributor, Modern Distribution Management and Supply House Times. He has presented at NAED’s Marketing Conference, Wit's Marketing Conference, speaks at distributor and manufacturer meetings and advisory councils and has co-authored a chapter in NAW's Outlook 2009 on Private Labeling.
Contact David Gordon at 919-488-8635 / [email protected].
Christian Sokoll
Chris began his career in the electrical industry 30 years ago in Spokane, WA, in the way so many in the electrical wholesaling space have – working the counter and the phones. He relocated to Phoenix, Arizona, and continued his career progression in an inside sales role with King Wire covering the Southwest. His next stop was Atlanta, where he continued to learn the business and worked the Southeast region. Little did Chris know that a move back to Washington state would start a career with Houston Wire & Cable that would span nearly three decades.
Chris was named “New Salesperson of the Year” in 1991 for his outstanding results and won additional awards for sales growth by supporting oil and gas exploration in the North Slope and managing a joint contract with Boeing. He progressed in his career taking an outside sales position in Lexington, KY, working with electrical distribution business development on major corporate accounts such as Mead Paper, DOW / Dupont, and the Savannah River Project. Chris was promoted to Regional Manager over the Southeast and again proved himself by significantly growing both sales and profitability.
Chris was asked to take on a turnaround project for Houston Wire & Cable’s Midwest Region, headquartered in the Chicago metro area, where he nearly tripled the region’s sales – from $24 million to $74 million. During his tenure in Chicago, Chris won numerous management and vendor awards for new product rollouts, sales growth, and national account management. His team won more “President’s Circle” sales awards than any of the other 11 Houston Wire & Cable locations. This high level of performance resulted in Chris earning a position as Regional Vice President.
Chris’s next stop was as Division President for Southern Wire, a heavy lift equipment wholesale subsidiary of Houston Wire & Cable based near Memphis, TN. He took this position post-acquisition and integrated the division, managed a transition of computer systems, and developed a segmented market plan while retaining all employees. Chris was able to buy out a competitor’s inventory, resulting in their exit from the market, and then hired their VP of Sales to step in as President of Southern Wire. This facilitated Chris’s next role as Corporate VP of National Business Development based in Houston, where his first responsibilities included continued oversight of Southern Wire, managing the Cable Management Services Project Group, and directing the National Service Center, a training and development group for new sales professionals entering the industry.
During this time overseeing so many critical divisions, Chris became more immersed in business intelligence and market data analysis – leading to innovative internal changes at Houston Wire & Cable. Chris learned to use and blend data from multiple sources such as DISCCORP, Industrial Information Resources (“IIR”), and ERP and CRM data to aid the company in embracing data and visualization tools in a completely new and unprecedented fashion. Chris deployed industry-leading corporate analytics and business intelligence tools such as Tableau, Power BI, Alteryx, Access, and Excel to inform and improve decisions and track KPIs. Likewise, he provided reporting for the board of directors and senior management team both in spreadsheets and in various advanced visual presentation formats. Chris also designed, tracked and approved compensation programs for sales reps and agents, and was also instrumental in the design and tracking of customer rebate programs.
In 2019, after working closely with DISC Corp. as a customer for five years and thus seeing the ongoing need for quality market intelligence data for the industry, Chris left Houston Wire & Cable to purchase DISC Corp. from its founder, Herm Isenstein. Along with being the leading economist in the electrical market for more than 30 years through his work at DISC, Herm was also a prolific author for Electrical Wholesaling magazine.
Herm passed away in Sept. 2019, but Chris continues to grow DISC’s vision while maintaining its leadership position as a trusted data source. By diligently working alongside DISC Corp.'s economists, programmers, and marketers, Chris embraces his passion to ensure that DISC continues delivering high-quality business intelligence and forecasting to further the future of the electrical wholesaling industry.
Chris holds a bachelor’s degree in organizational leadership from Roosevelt University in Chicago and a graduate certificate in finance from the University of Chicago. Chris has completed various Microsoft training programs in Excel and Access in addition to data science theory, and he has written college-level course material on Microsoft Power BI and Excel.