14 thoughts for 2014

Okay, so you’ve seen lots of “predictions” or “trends” by every publication for 2014.  So, not to be left out, we thought our first post of the year should share some thoughts / ideas that are industry specific for 2014. Some are pretty specific as it relates to a company, some are more macro in nature (sorry, just they way we were brainstorming) and we tried to stay away from the obvious (like LEDs will continue to grow).  Take a read, let us know what you think and feel free to add any trends / predictions you have (and if you have a question about “why” for any of them, ask and we’ll answer).

1. WESCO will be an active acquirer (many or a large one, we don’t know), however, the deals will be outside the electrical space.
2. Leff Electric will be an active Great Lakes acquirer
3. While it may be faddish to say LEDs will grow (too obvious), there will be a greater divide between those who are advocates (demand creators) vs. laggards (who want to stick with what they know). Having lighting / LED specialists will reinforce the differentiation.
4. eCommerce grows distributor business and moves share from those in denial (or whose systems can’t do)
5. With continued focus on eCommerce, distributors remain confused on where to get content … IDEA, Trade Service, direct from the manufacturer, all of them?
6. Margins continue to erode, except for those who make price optimization a priority and implement systems for change (and stop being hostage to their sales organization)
7. Rexel US focuses more on basics … logistics, supplier consolidation, sales blocking & tackling, identifying niche opportunities.  Their running the business, not out solely for an acquisition land grab.
8. Regional distributors take share … some organically, some through small distributor acquisition
9. Given that some product categories are getting more technical or in the area of electronics (LEDs, lighting controls, automation products and their ecosystem, etc), look for electronic distributors (Digikey, Mouser, Anixter, etc) to be more active in this space.
10. Online ordering, beyond electrical distributors, Amazon and Grainger … someone like www.bgbsupply.com … and other niche sites to silently take business away from the “channel of choice” (and take a look at their website, suppliers and their “Smart eCat” at the bottom of the page.)
11. Distributors in major metro markets or major university cities will outpace other distributors … multi-family and commercial renovation drive the market.)
12. Grainger will be the logistics innovator, providing additional value-added to customers at cost points that electrical distributors can’t match.
13. With so many distributors already in marketing groups, look for the groups to seek multi-line distributors, hence increasing the interest of distributors to consider diversification to increase share of customer spend (and we saw that AD just picked up such a distributor, www.southernpipe.com.)
14. Due to the growth of e-interaction and changes in the definition of customer relationship, companies will spend more time developing “customer” (distributor and end-user) email lists and track RFM (recency, frequency, monetary) value.  While maybe not CRM, consider it CRM lite. This also plays into the channel going mobile (tablets).