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ElectricalTrends is a communications vehicle offered to the electrical distribution industry by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates' and Channel Marketing Group's insights on industry trends, observations on industry activities and issues and offer ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.

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Sunday, July 17, 2011

Changes Coming in Servicing the Industrial Market ... New Report

The industrial market continues to power growth for many distributors.  Recently we spoke with a number of manufacturers and distributors to get the current pulse of the industry.  The result ... industrial continues to grow fueled by the OEM market, industrial MRO and capital expenditures.  Additionally, many industrially-oriented electrical distributors are excelling in the energy market (perhaps because they are more used to selling to end-users) and a number are getting into renewables.  Contractor-oriented electrical distributors still, for the most part, are challenged with limited larger projects around the country and it seems fewer small, light construction projects.  There are some exceptions as we spoke with one contractor-oriented distributor who is up 29% ... as they repositioned to focus on the energy market and are in a state that only has 7.6% unemployment.

While industrial is expected to continue to power the electrical industry until more credit is available, companies start hiring and business confidence improves to enable new private commercial construction, there are a number of changes taking place in the industrial market.

Channel Marketing Group recently gathered insights from almost 2000 industrial end-users and industrially-oriented electrical contractors.  They shared their challenges; what they desire from distribution; their move, and acceptance, of "e" initiatives and more.

Some of our key observations:
  • The market is getting more nuanced.  Mass marketing won't work in the future.  Customer intimacy will be key to account development, account penetration and account retention.
  • "E" is accepted, and growing, for everything from product research, training, account management and procurement.
  • Distributors are viewed as transactional or service-oriented.  The key is deciding what you want to be and managing to profitability accordingly.
The report is available for purchase in the Research section of ElectricalTrends.

What are you seeing in the industrial market?

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