NAED 2017 Eastern Region Observations

Last week’s NAED 2017 Eastern Region Conference started the association meeting season with a whimper, albeit much of the “lack of energy” may not be attributable to NAED, especially given the need to book meeting space years in advance.

The meeting was had 580 registered attendees.  They came from 62 registered distribution companies, inclusive of divisions / operating companies of national chains, about 120 manufacturing companies and 17 rep organizations.  Only 51 distributors had one-on-one booths with some being empty on Wednesday.

Attendance was constrained due to the AD and IMARK meetings recently being held and many distributors and manufacturers essentially saying “we just met” and Rockwell’s Automation Fair starting on Wednesday, November 9 (and with many Rockwell distributors in the Eastern region having customers attending and in being in AD, they decided to either not attend or sparsely attend.)

The energy for the meeting was also constrained as the

• Hotel is cavernous and the group felt small and dispersed within the hotel
• There was another large group in the hotel (Construction Risk Conference) that had more attendees and outnumbered NAED attendees in the public areas / lobby, restaurants, and the bar area.

The result is that many manufacturers lamented the number of meetings they attend and questioned the need for this meeting.

Educational Sessions

Regarding the workshops:

A number of distributors and manufacturers commented that they are “tired” of HR-related sessions and are “tired” about the Millennial issue.  The topic has been presented for three years and they are hiring as needed and adapting.  Additionally, they commented that their HR personnel do not attend the meeting.  The integration of Millennials isn’t as “unique” as other times aside from technology utilization and the desire to contribute. A number of distributors are finding that as their workforce “ages out”, opportunities for Millennials appear.

There were comments about a desire for more industry-relevant sessions … such as LED, lighting controls, IoT or operational areas … as well as a desire for panels.

Some distributors commented that they won’t come in on a Sunday for a Monday NAED educational session as historically the sessions haven’t been as informative / thought provoking.  These individuals commented it would take extensive word of mouth references for them to justify sacrificing family or supplier time.

There appeared to be limited supplier participation in the sessions which means there could be less for the Western and SouthCentral given that the sessions are repeated.

During the NAED portion of the General Session:

• Tom Naber spoke about:
  • “NAED being about participation.”
  • He highlighted NAED’s 4 priorities:
    • Train for success as it is the fuels the workforce.
      • NAED will be putting more effort into senior management / executive management training (perhaps it will emulate NEMRA’s Wharton initiative?)
    • Bring together “the best minds” to solve common problems
      • This could relate to technology, products, tools to support distributors
    • Build appreciation for “member” (distributor) value
      • Improve distributor / manufacturer relationships
    • Be more accessible to members to build NAED’s value
  • He spoke about the need for distributors to train their staffs to help reduce errors and that the NAED Educational Foundation has identified that distributors should invest 40 hours / employee, annually, in “instructor-led” training to improve skills.
• Larry Stern, NAED’s chair from Standard Electric, then shared a number of services / tools that NAED has with his 2016/2017 message / desire being to get NAED members to utilize “one more service” (make the most of ‘your’ membership._
  • Feedback from a number of manufacturers regarding his presentation, which gets to “supporting NAED” was “is NAED about solely distribution or should it be about the channel?” given that he mentioned only two benefits / services for manufacturers

The general session speaker solicited the range of feedback.  Some liked the message of the presentation of disruption that technology contributes. Disruption was defined as “ability to create / develop new opportunities.” Others felt that the presentation was more product-oriented, esoteric and spoke above many individuals.  In looking around the room, many were checking email.  The speaker, unfortunately, appeared to read his script, had too much content, had too many examples and did not bring his presentation back to the electrical / construction industry or to distribution.  Additionally, many were put off when, at the end of his presentation, he essentially made a pitch for Autodesk’s services, which detracted from his message.

A couple of weeks earlier I heard a similar presentation from an Autodesk presenter at the Dodge Construction Outlook Conference that essentially had the same message but was much more interesting and related to the construction industry.

Market Insights

However, we met with enough manufacturers and distributors to also gain some market insights:

• 2017 projections are for 3-6% growth, depending upon locale.  The construction market, especially in metropolitan areas, is expected to continue to outperform the industrial segment.  Industrial is expected flat.  This presumes copper remains flat, which is expected (although recently copper has been increasing so, “who knows”).
• Lighting is expected to continue to be a growth segment even though pricing is “challenged”.  The opportunity for conversions to LEDs, especially supported by utility rebates, is significant.
  • And LED companies will again launch many, many new products.
  • These companies also lamented that distributors are not stocking much product.
• Some distributors are experiencing growth in their lighting control business and are focusing resources in this area.
• We spoke to a number of distributors who are seeking acquisitions.  Acquirers are about 15-20% of attendees (and if you’re thinking of selling and would like to know who expressed interest, give  us a call.)
• Price management / optimization is an issue / opportunity for distributors, especially for those embarking on an eCommerce initiative.  Two companies (Strategic Pricing Associates and Jigsaw Systems) were in attendance speaking with distributor.
• Heard from some distributors that reported that some manufacturers were talking about their “platforms” and the manufacturer discussing “longer-term” planning and commitments.  Perhaps some “pairing up” and selectivity within a marketplace?
• Some discussion about sales culture with manufacturers and distributors with sales organizations essentially becoming “complacent” and “accepting” of the business that they have / are being provided by their customers.  The “energy”, or proactiveness, to solicit business appears to be missing. Perhaps a sales management issue; perhaps a recognition or training issue; perhaps comfort with compensation level; perhaps recognition that the business is more “challenging” and salespeople are focused on being more account managers to retain their business (and in some cases maybe companies haven’t resourced support personnel.)
• Heard of a few small to mid-sized distributors who are updating their ERP systems. Companies that they are looking at / converting to appeared to be Ximple, Xtuple, Sourceware and Savance (who attended the meeting.)
• XO Logic was the only eCommerce / website company that attended the meeting. They are focused on providing lighting (resi / architectural) data to distributors as well as turn-key website / eCommerce solution, primarily targeted at small to medium-sized distributors.
• All Current announced that they are opening a new warehouse in the Orlando area which will also have a UL 508A panel shop.

Some meeting management observations …

• NAED, NEMA, NEMRA, the marketing groups and key manufacturers who run events (Rockwell, ABB, perhaps others and maybe NAED could coordinate with Graybar and some of the chains who run fall meetings) should somehow talk before booking meetings “far out” into the future so that there is either some spacing or at least not “back to back” meetings.  It hurts all.  The industry needs a little “calendar awareness.”
• The days of NAED needing large hotels for large attendance, let along resort properties with golf courses is past. Many other destinations / properties could be considered in the future.  The dynamics of the meetings have changed.
• There continues to be an opportunity to improve the educational component and perhaps solicit distributor and manufacturer input closer to the meeting to improve relevancy.  With neither of the groups providing industry insight sessions, perhaps this is an opportunity for NAED.
• And more networking / hallway meeting opportunities could benefit the membership. Many appeared to never leave their suite.

And not leaving the suite leaves the meeting with “a lack of energy.”

What were your thoughts?