NAED 2010 SouthCentral Observations

Last week’s NAED SouthCentral attracted a decent crowd, defined as people who registered (as a number of people were no-shows due to weather in Chicago and the Mid-Atlantic / NY area).  68 distributors (excluding IESC and Bell Electric – sorry Burt – not your region), 101 manufacturers, 3 reps and 13 non-associates (invitees and non-members).  According to some, the overall numbers where about the same as last year. Unfortunately, with a room rate of $275 + tax, getting more to attend is a challenge.  Mike Marks pinch hit as keynote speaker, but didn’t hear any comments about his presentation.

The mood seemed to be of cautious optimism. While a number expressed that January wasn’t good, it appeared that this was more regional and perhaps driven by weather in the middle of the country. Fact is, only 1 month of the year has gone by. But remember, typically it is the better distributors that attend NAED meetings … more progressive, more profitable.

A number of nationals have continued to streamlined their operations, however, a number are redeploying payroll from operational staff to sales hires (and 5-10 people who are employed expressed interest in seeking new opportunities!)

Some highlights:

• NAED has changed the format for next year’s, for the Eastern and Western (the SouthCentral stays on a Wednesday – Saturday with the vaunted Friday night function).  The day pattern will now be a Monday-Wednesday, with no final night event (as a way to save money). The negative of this is that to get a full set of meetings on Wednesday (or to attend networking sessions) it will require traveling on a Sunday. While this is probably a cost-cutting move for NAED (and hopefully will be reflected in the registration rate), to get more attendees it is important to reduce the room rates.
• Marketing groups were a topic of conversation.

Many manufacturers inquired, and questioned, about Rexel’s strategy. They don’t see a national strategy or consistency in execution. Appear to be more of a transactional organization and also slow in implementation.

A number of manufacturers had questions regarding IMARK. Comments such as “what is the value to manufacturers”, “they want volume”, “they are a transactional engine”, “why did they acquire EDN”, “what is the ‘play’?”, “I’m confused”, and “explaining this to my sales organization is a challenge” were frequently heard. Additionally, a number of manufacturers aren’t pleased with many “new” small manufacturers becoming part of the group nor IMARK’s desire for many distributors to expand their distribution to include smaller distributors. Neither Philips nor Sylvania were pleased that GE is now a part of IMARK (all 3 lamp companies are now in the group). At the same time, IMARK is telling manufacturers “this is temporary”. IMARK now represents about 40% of distributors in the industry and 20-25% of sales (assuming the industry is a $50B industry). Will be interesting to see if they can continue to outperform industry results with such a wide array of distributors (and reportedly seeking to expand into other industries!) And A-D has been quiet as IMARK has loaded up on manufacturers.  Manufacturers, what are you thinking?

A new group, Premier, was discussed. Supposedly they are focused on supporting small distributors and specifically the former EDN distributors. According to some, there is some “disenchanted” EDN / Equity distributors. Don’t know if any manufacturers have signed up yet.

• Spoke to a few distributors who are focused on strategies to take share through product offering expansion, adding salespeople, geographic expansion and adding fill-in locations.
• Manufacturers are looking forward as the discussed research initiatives. This indicates that they have reduced operational costs to a point that they can be profitable while making some investments in their business.
• Spoke to a national distributor who was asked by a manufacturer to think about their value-added / “why should a customer do business with you?” five years from now but to exclude relationships. Question – could the manufacturer do this?
• The growth of LEDs is taking off. Lighting manufacturers are really investing in this technology. Challenge for distributors will be “which ones do I support and what is the difference amongst them?” For the many “start-ups”, the question is “how do I get mind-share and shelf space?”  If distributors don’t embrace, alternative channels will be found for this technology with electronic companies now getting involved. This also parlays with distributors who are focused on energy, with a number conducting Energy Summits / Symposiums for staff and customers.

Personally, this was one of the better conferences in awhile . If you attended, what did you think?  If you didn’t attend, why, and, perhaps more importantly, what could get you to attend?