2022 NAED Eastern Observations

As I get ready to close out 2022 there is something I’ve been meaning to get to this month but continuously postponed due to client travel, family travel, keeping up with acquisition news, and client projects that needed to be completed by the end of the year. That’s my recap from the NAED Eastern conference which was held in mid-November.

Mea culpa.

And I feel guiltier as I’ve had a number of people reach out and ask if they missed the posting (thank you for your readership.)

So, going from my notes …

The meeting

• Logistically the conference was a “challenge” with people, and meetings, being held in two hotels, even if they were across the street from each other. I heard a number of comments and, unfortunately, the JW Marriott has 4 levels that people could meet on, so finding someone was inevitably a challenge. But we learn to quickly adapt and accept being a few minutes late for every meeting.
• Overall attendance was about 475 people but there were 75-100 reps and service providers who were in attendance. The number of distributor companies in attendance was “limited” and this was evident during the booth sessions.
• It was widely discussed that the NAED Eastern is “going away” in 2024, to be combined with the South Central. What was once the strongest NAED region is now the weakest. The result of consolidation and a declining NAED distributor membership. Questions will arise about the timing and the format.
• Had a number of manufacturers comment about their challenges in getting distributor meetings. Surprisingly this was from a number of name manufacturers. While they were not “top tier” from a revenue viewpoint, the are recognizable names.
  • Some commented that with NAED going to a combined meeting, if they can’t get meetings, they could not justify bringing additional regional personnel and, if the cost structure to attend increased they would have to consider the ROI of multiple attendees. It all comes down to “can I get in front of enough people.”
• NAED held a “Futures” session. While there were only 40-50 people who attended, the room was “packed” and the conversation was very good. The only downside was too much was attempted to be accomplished but, once people started conversing, there was good feedback. If you are attending the Western or the SouthCentral, attending, or having someone from your team attend, could be worthwhile.
• The general session speaker was … shall we say “general.” Some liked him, some didn’t. Most said “why”, especially right after the election (the speaker was a conservative political commentator). The feedback was “I can read the paper myself” and some felt it was a lost opportunity to share insights to benefit the industry (i.e., EV marketplace opportunities, optimizing opportunities from the IRA and Infrastructure bill, etc.).

Heard during the conference

• Lots of conversation about the acquisition marketplace, from the number occurring to who could be next to why it is happening and what could be next.
• Many commented that growth rates declined the second half of the year.
• Backlogs persist, especially for distribution equipment and transformers. These are expected to be long-term issues. They are impacting other product categories (i.e. lighting) as projects get delayed.
• The outlook is mixed and is based upon market segment as well as geographic. Many expressed levels of moderated confidence and feel they will be up mid single digits. A portion of this is their backlog, some possibly based upon their market focus and, since this inevitably is better performing distributors attending, it is their growth efforts (sales / marketing / diversification) that will enable them to take share. Some described the outlook as “cloudy”.
• When asked about price increases, manufacturers felt they would be reverting to the historical model of one to two times a year and low single digits, indicating that they think commodity prices will be manageable.
  • And then there are categories, like transformers, which will continue to experience significant price increases.
• Many commented about labor issues … for themselves as well as their contractors. Aside from trying to find qualified personnel who are interested in the industry (let alone any with experience), a number commented on the number of people who are retiring from the industry after lengthy, often distinguished, careers in the industry. Few feel that there will be many 20-40 year career builders in the industry in the future.
• Had many conversations regarding rebates. To some degree the visibility of the topic may be driven by Enable promoting its rebate software. The questions related more to the effectiveness of rebates and how to get them to be growth drivers and / or effective retention tools, especially since most companies will offer “a program.” (As an aside, Channel Marketing Group wrote a white paper for Enable on the State of Volume Rebates and help a webinar. You can find them on the Enable website or email me for the white paper.)
• Had some discussions regarding pre-fab initiatives and targeting applicable contractors for this type of opportunity.

Sorry for the lateness in the feedback. Hope the input helps.