The Beginning of the Crumbling of a Monopoly?
Recently I was flipping through the October issue of ElectroIndustry, NEMA’s publication, and saw this ad for IDEA recognizing their Platinum manufacturers.
While this is a recognition program, it recognizes these 28 manufacturers for the quality of their data in the Industry Data Warehouse (IDW).
And when you consider the percentage of industry sales that these companies represent, it starts becoming significant, and presumably the distribution equipment / controls manufacturers are also working to achieve Platinum level, which would further accelerate the percentage of industry sales involved in this program.
So why is this important and a threat to Trade Service?
If the quality of the data in the IDW continues to improve and manufacturers continue their commitment to it (which by spending money and allocating personnel shows their commitment), eventually IDEA can realize its goal of being the source for industry content. This endeavor, coupled with IDEA’s data attribution / enrichment initiative with AD, can help further reduce industry operating costs while providing quality data that can be used for ebusiness initiatives.
Presumably Trade Service currently benefits from these manufacturers becoming Platinum with IDEA (improving their data quality) as many manufacturers send data feeds to IDEA and Trade Service. But what if Platinum manufacturers didn’t? What if they told their distributors to get their data from the IDW or direct from the manufacturer, via a download, or the distributor could still subscribe to Trade Service however the data from Trade Service would have to be obtained by Trade Service by a means other than direct from the manufacturer (which reportedly they have done for some manufacturers).
And what if distributors, especially the national chains and larger distributors in the groups (as well as the groups themselves), started making this more of a priority – recognizing manufacturers and distributors that provide / utilize data from the IDW, making it part of their discussions / scorecards, considering it a business tool to reduce operational costs (business transaction errors).
Consider, if Sonepar, Graybar, Rexel / Gexpro, Crescent, CED and USESI, WESCO, Border States, Mayer, Elliott, North Coast, Kirby Risk and McNaughton McKay, to mention a few, made this a business requirement with their top 50-100 manufacturers and, once those companies were Platinum, “unplugged” from Trade Service, would other manufacturers follow pretty quickly?
While small distributors may always be challenged in obtaining “clean data” for a variety of reasons, if the Top 200 distributors (as defined by Electrical Wholesaling), began converting to the IDW, error rates will decline.
And for the small manufacturers? They currently provide data to Trade Service, is there a reason why they can’t to the IDW (and maybe the IDW should consider a more cost-effective initiative for these companies?)
Since data is the key (and everyone likes talking about Grainger being a significant challenge … their core differentiation is their ability to manage data, which they then use to populate their 50+ catalogs, websites and branches while reducing costs – hence increased sales growth and profitability), could the Platinum program be the first step to essentially ending the Trade Service monopoly?
Questions
- Has anyone recently compared the quality of data from the IDW vs. Trade Service’s data?
- Does anyone know what percentage of the units that a distributor carries could be serviced by IDW providers (although one service may have more SKUs than the other, do you / how often have you ordered from those companies or ordered those SKUs)?
Thoughts?