NAED Eastern Observations … The Election Aftermath
Posted On November 27, 2012
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0 The week before Thanksgiving NAED held its Eastern Region conference in Hollywood (Ft Lauderdale), Florida. Due to travel and the holiday it was not possible to share our observations and some of the conversations we had, so …
According to Tom Naber, registration was down only 2%, which is good considering consolidation and Superstorm Sandy. Tom said 2 distributors cancelled. No reason to disagree, but seemed like there were fewer people but that could be because many manufacturers took suites / meeting rooms and hence the lobby wasn’t too busy during the day. The lobby was quieter than normal due to distributors being in manufacturer meeting rooms … some manufacturers and distributors were never seen except at the cocktail reception.
Overall there were 73 distribution entities (including various Rexel, CED, USESI, Sonepar companies) and 113 manufacturing companies / divisions. Both numbers continue to decline. Many manufacturers commented that they had recently seen their IMARK and AD customers.
Overall there were 73 distribution entities (including various Rexel, CED, USESI, Sonepar companies) and 113 manufacturing companies / divisions. Both numbers continue to decline. Many manufacturers commented that they had recently seen their IMARK and AD customers.
We also heard that while some of the sessions had good content, attendance was week with most sessions having less than 25 attendees (and some much less) and the much advertised session regarding AmazonSupply having less than 50 attendees.
Wednesday afternoon booth sessions were a bust. Over 50% were empty. While some may have been on the course, most had left the meeting early to return home, which begs the question, “what is the value of afternoon booth sessions on the final day?” (perhaps educational sessions should go here … if they have value and are promoted early, people would stay (or, another way of saying this is “if they have value, people will pay, if not, are they needed?”)
Terms used to describe the overall atmosphere of the meeting were “mellow”, “resignation”, “sense of despair”, “gloom” … much of this was attributed to the election results (with some saying “it is what it is) and the malaise of the current business environment coupled with Congressional paralysis for the “fiscal cliff”.
From a business outlook perspective, many were talking a 3-6% increase with companies benefiting from the industrial and energy-efficiency markets on the higher end. When asked, most admitted that this was their forecast pre-election. Post election people were discounting growth by 1-2%, resulting in a flat market (some said 0-2%). Other than residential, most markets are believed to be flat / uneventful. The first half of the year was felt to be okay, most felt Q3 or Q4 would be the beginning of a decline.
Additional Input / Insights
- Much talk about Rexel’s acquisition of Munro … and disbelief of the price paid. Many wondered what additional acquisitions we may see prior to Dec 31 and what next year’s acquisition market may bring.
- Craig Riley left TED Magazine a couple of weeks ago due to “personality conflict” with NAED management. A new person without industry experience has been brought in and plans to utilize video more extensively (or so we were told).
- There was talk about the “dearth of talent in the industry, especially young talent”. NAED is spending much time talking about training and recruitment. Bottom line, however, is that larger companies / companies looking to aggressively invest in their business are the only ones that can afford to bring on untrained staff (for sales roles) and carry the sub-optimal performance in the beginning, given the current economy. In talking with distributors a number lamented that with margins eroding and costs increasing (including healthcare), they are challenged to carry employees that are not 100% productive.
- Reportedly about 70% of the EW Top 200 distributors download data from the IDW (albeit many do not use it as their primary data load)
- Heard of an upcoming acquisition to be announced around Thanksgiving
For CMG it could be a good meeting. We had about 25 meetings with a mixture of manufacturers and distributors. There was much interest in our new Customer Satisfaction Assessment initiative which culminates in a Customer Satisfaction Index for distributors (and a comparable strategy we’re building for manufacturers), our Focus national accounts field research strategy, a couple of brand identification initiatives as well as companies seeking input for strategies to take market share in 2013.
Overall, the consensus was for slow / no growth. Strategies for 2013 revolve around taking share, identifying / growing talent (and hence training), continued pursuit of operational and price management improvement and focusing on market segment strategies to drive growth.
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