2014 NAED South-Central … Escaping Winter!
Last week I was at the NAED South-Central which was held in Tampa. While the reported attendance was about 675-700 individuals, consisting of 75 distributor entities (including multiples of CED, Sonepar, etc), 122 manufacturer entities, and the remainder being reps and service providers. Unfortunately it seemed to be the quietest 675 people I think I’ve never heard. The lobby, which was nice and centralized, was not too busy. Perhaps people had to cancel due to weather? Perhaps they were all in suites / meeting rooms and were not available (this was the case for a number of manufacturers)? And this is becoming an issue as small to mid-sized manufacturers and comparable distributors were heard commenting about the challenge of getting meetings and connecting with the larger manufacturers / distributors. It was also an issue touched on at the Manufacturer Advisory Council albeit there is not perceived to be viable solutions and NAED is locked into dates and hence is reluctant to some change.
There was much talked about at the meeting, so, here we go:
- Traditionally at these meetings everyone tries to benchmark their performance by asking each other “how’s business?” This time the answer was “snow and cold”. Few numbers were shared. Most manufacturers, other than lighting, are behind plan albeit not too significantly. All attribute it to the weather in the Central / Eastern part of the country. Distributors north of the Mason / Dixon line have been closed for 3-7 days and have lost additional productivity due to people coming in late, leaving early, staying home to take care of kids, trucks not starting, etc. In some areas the ground is so frozen it would take a jack hammer to dig a hole. But no one appears to be panicking and cutting expenses yet.
- The general session was a mix depending upon your perspective:
- Tom Naber highlighted again (similar to the Eastern and Western) the NAED Learning Center’s growth … 9500 users in 2013.
- There are new distributor IDEA board members
- Mentioned that Datagility’s DataFirst program, developed with NAED, is a data quality program. It’s not part of IDEA but designed to complement.
- Sandy Rosencrans’, NAED Chair, theme for the year, which unfortunately ends in about 60 days, is Build the Bottom Line. Strong message with a people foundation. Mentioned how the PAR average is 3.3% and the high profit distributors are at 6.3%
- Shaker Brock, Region VP, highlighted the Talent issue and NAED’s tool, www.naed.org/employeelifecycle.
- The keynote speaker received mixed reviews. Most felt that the speaker, presentation-wise, was “weak / vanilla”. His message was primarily about the culture he built for his company, www.blinds.com, which had 200+ people in a single location. Some felt his story of a small business to a $100M business was very good. Others felt the story lagged. Shows you can’t please all of the people!
- A key for him was identifying his core values and making them company core values and then hiring to those and integrating them into the culture of the company (as skills can be taught).
- His process for evolving a culture included 5 steps:
- Understand yourself
- Design your environment (yes, it was a .com company)
- Hire only aligned people
- Eliminate non-aligned people
- Communicate and reinforce.
- The LED market continues to be strong with lighting companies reporting that 35+% of sales being LED. All lamented that not more distributors are actively selling / promoting LEDs and many are willing to remain in the order taking mode. Manufacturers are looking for distributors with LED specialists and a defined LED marketing plan.
- A number of distributors spoke to us about their interest in eCommerce solutions and asked about companies that offer this option (as none were pleased with the offerings from their ERP companies.)
- While one of the workshops was on industry threats and emphasized AmazonSupply, and the session was well presented according to attendees, we also heard that not too many people attended the session, about 25.
- Also, AmazonSupply is planning to hire 500 salespeople and already had 175 hired.
- Perhaps AmazonSupply’s biggest contribution to the industry may be that it has accelerated, and in some cases stimulated, the conversation about eCommerce and catalog content.
- Regarding the workshops, heard positive about a number of them, however, attendance continues to be weak. Companies staying in suites is a contributing factor. Perhaps NAED should consider offering less options so it doesn’t have to spend as much money on speakers?
- Suppliers are emphasizing new products and new product launches more than in memory … and lamenting that they are challenged in gaining adoption, traction and the effectiveness of their communication to their distributor networks (and capturing attention from their reps).
- Regarding eCommerce, distributors also asked us about IDW vs Trade Service for catalog content and desire for more manufacturers to provide content … and not just NAED manufacturers as many niche, automation, datacom and other suppliers are not in either service (and the distributors don’t want to have to pay additional or maintain the content). Distributors are challenged with the difference between the two services.
- It seems like IBIS’ Advanced Distribution Software and Xtuple seem to be gaining a little traction with both saying they have 8-10 distributors in process.
- Heard about some companies that are reportedly in acquisition discussions.
- Heard from a number of people that HD Supply had a layoff the prior week, affecting over 200 people (not necessarily all electrical). This was reported to me by a number of manufacturers with one saying “cut into some bone.” While I couldn’t find a direct web reference, there are indications that HD Supply is hiring for its Facilities Maintenance division, so it could be a reallocation of resources. Some feel their focus is utility / infrastructure and the Facility Maintenance group
- Reportedly, at the NAED regional council meeting, and the Manufacturer Advisory Council, there was discussion regarding the meetings due to attendance, the paucity of the number of distributors and the meeting schedule. Some discussed combining the Eastern with another region, some talked about moving meetings closer, some talked about the need for a centralized meeting calendar to assist in coordinating dates (and this could be posted online with a vetting process), some talked about the need to add a day to increase the available of meeting times, and there was some conversation about scheduling software to support smaller companies. Another idea is possibly NAED and NEMRA “switching” times for the NAED Eastern and NEMRA (which could result in sales meetings occurring in November.) Unless some decisions are made quickly, nothing will be done for 3-5 years due to associations scheduling meetings far in advance and not being willing to pay cancellation fees.
- Heard from a number of distributors regarding Cree. While they credit Cree with product and marketing innovation, they wonder about a company that has channel marketing “challenges” and Cree’s commitment to the channel. While the company may want to be an agent of change and/or a disruptor, some wonder if the “new guy in town” is a little arrogant / cocky? With others being more channel friendly, this could push Cree to be channel agnostic or to think that it wants to align solely with nationals who may be less relationship-oriented.
- Lots of software companies at the meeting … ERP companies, catalog companies, CRM companies, ElectricSmarts, VMI, online SPA management, and more. A sign of the times?
- The potential sale of Anixter was a topic for many, especially with Rexel mentioned as a potential acquirer. Other possible acquirers mentioned were Sonepar, Clay ton Dubilier & Rice, KKR (both private equity) or the possibility that nothing will occur. My money is on private equity as they would probably offer more money.