2025 NAED Western – Stable with Positive Outlook

Last week’s NAED Western, held in Palm Desert, was described by one attendee as “stable.”

While many felt it was “well-attended”, attendance approximated prior Western regional conferences.

NAED Western Overview

There were:

697 registered attendees, consisting of

• 31 service providers
• 54 manufacturer representatives
• 6 from AD / IESD
• 369 manufacturer attendees, and
• 237 distributor personnel (34%)

When I last checked, 40% of distributor attendees were from national chains (excluding CED, Border States and Crescent in that count.) 38 distributor companies had booths at the one-on-one, albeit not all were staffed the entire time.

This then got me thinking about NAED getting its message out to the membership, which is significantly less than the number of independent distributors in the market, but the largest percentage of distribution sales. How to reach distributors with its message of change, especially given that its two major initiatives are Industry Transformation and Digital Transformation, each with sub-components.

To Wes Smith’s point … getting people involved.

This is a greater challenge given consolidation. Either the largest companies, at the top, must be supportive, and committed, to the NAED vision and change initiatives, or NAED needs support for these initiatives to bubble up from within these companies.

This infers that it’s either a sales outreach to targeted individuals / entities or (and it can be “and”) a mass communication approach and possibly this is where a robust, transparent, video initiative could benefit the industry.

Just food for thought.

And what got me thinking about this was the NAED element of the conference agenda.

NAED held some sessions on Monday, but unfortunately I didn’t hear much regarding the content. Doesn’t mean it was bad or good, it just didn’t generate much chatter, which is an inference of attendance.

The general session speaker was excellent. In the words of a few people, “one of the best”, and “top 3 that I’ve attended.” Pippa Malmgren was informative and insightful as she put shared insights that identified potential future. This was a session that, if it could have been recorded, or her text transcribed, would be a worthwhile messaging to the membership. And, although she apologized for being ill (catching a cold, it is what happens with flying! it seemed to add to her presentation by having the audience more focused on listening to her.)

Some key points, from notes, were:

• Central to the economy, moving forward, is the Southeast and Southwest
• Mexico is the new China, but with better quality and better supply chain
• Seek / listen to the signals in the marketplace
• The US economy is the best and most desired economy in the world and that others are coming here / seeking to invest in the US. Only area with growth, and resources.
• It is a race for a technological frontier
• The lack of gas / il from Russia leads the EU countries to the US

And one takeaway that had people talking was the concept of neuromorphic chips / wetware. Combine this with the coming satellite-connected world (as Pippa shared that China has recently had two ships, in the Arctic, that has cut global undersea communications lines, and figuratively, “your brain will hurt.” Check out the link (its generic and then you can do a Google deep dive on the topic.)

While Pippa was presented as an economist, her presentation was more of a futurist.

Market Insights

Overall, personally a good meeting with many meetings with manufacturers, reps, and hallway conversations with distributors (their first focus is meeting with manufacturers, so I couldn’t get any meeting room time.)

• Overall, there was optimism for the year, portrayed as “economic optimism” for a better year. No one really had a reason why except “the election is done” and a more growth-oriented mindset.
• 2024, overall, was flat and people were happy to “turn the page.”
• Distributors are looking at 2-5% growth this year. Those solely with construction are closer to 2-4%, with some industrial more 3-7%. Some who have slightly higher numbers have “wins” that they have, or expect, from a large project … data centers.
• The data center market is expected to continue to be a major opportunity, however, this is a market that not all distributors, manufacturers, or reps benefit from. For distributors, much of this comes down to being the right size (can you finance the project), the relationships (contractors), lines, and benefits to the customer. For manufacturers, are you at engineering. And some territories do not have many data centers in their market due to utility rates, power availability, and topography.
• Lots of questions about tariffs, but no answers. It’s on everyone’s mind but manufacturers are keeping mum about their actions and if they are doing any inventory stockpiling or planning on alternative sourcing.
  • Some in the lighting sector shared that many of their factories have moved out of China to other Asian countries … and some to Mexico, albeit it could be Chinese owned companies with Mexican operations.
• Ewing Foley entered into a relationship with Hodges Southwest. Not all of the lines, nor all of the people, are moving to Ewing Foley. This was a succession planning move by Hodges Southwest and a line and resource acquisition by Ewing Foley.
• It was rumored that Signify was undergoing senior leadership change, which was then reported on by Edison Report with Christy Tilton now having responsibility for North American sales and Keith Eagle leaving the company.
• I spoke to many manufacturer reps about their business challenges looking forwards. Some recurring themes are effectiveness of regional managers and manufacturer needs to identify what they want those roles to accomplish and hence resource / manage them appropriately, line conflict when it is manufacturer generated due to product expansion and acquisitions, change in the model due to consolidation, and the continuous need to invest to support manufacturer expectations and technology implementation.
• Lighting manufacturers, as well as manufacturer representatives, inquired about NEMRA’s Lighting division with all seeking to learn more about its planned services. They feel that the concept is beneficial given the number of reps / agents that have lighting on their linecard. More of the “spec-oriented” lines question a sales / channel association as they are members of end-user oriented associations and want to learn the benefits (a WIIFM thought process.)
• There was continued acquisition discussions, and questions. Feedback is that distributor acquisitions are still being discussed. Some to strategic buyers with also with some reference to PE expressing interest. PE is involved with some manufacturing opportunities and could be an acquirer for Emerson Tools (Greenlee / Rigid). Another name company is expected to go to a PE firm in the near future.
• I noticed that the attendee base is skewing more tactical with appropriate discussions – more regional managers, more purchasing / supplier relations discussion, more “numbers review.” Not as strategic. It’s a “business focus.” More tactical. Some of the service providers commented that they could not engage with enough distributor senior management to share their offerings, which can be strategic in segments of the business but that is because Marketing, Sales Operations, Finance, and sometimes Leadership are not at the meeting and/or they do not have the connections to obtain meetings prior to the conference.

About Palm Desert. It is where I attended my first NAED prior to joining IMARK. Plenty of space. The environment looks good (although I don’t get outside) but, there is generational change going on in the industry. I had a number of “younger” people, who are not in executive leadership roles, comment that “nice hotel, but why do we go here.” They were referencing a resort environment and the “level” of hotel. It is something that NAED may wish to consider as it makes its longer-term plans. If the reason hotel planning cannot be changed due to “planning 5 years in advance”, perhaps the time to change the future is now.

Overall, as shared, it was a “stable” meeting. Perhaps a “standard” get together.

If you attended, what were your observations? Takeaways?