Observations from the 2017 NAED Annual

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NAEDEarlier this month NAED held its 2017 Annual Meeting in Boston. The meeting attracted a little over 600 attendees.  According to one manufacturer there were 339 manufacturer attendees plus service providers, technology companies, marketing groups and other miscellaneous entities … referencing that distributors represented only about 1/3 of attendees.  According to the registration list there were about 80-85 distributor entities in attendance.  Unfortunately only 34 manufacturers had one-on-one booths with the remainder preferring to either reserve suites or they did not have enough meetings (or prospective meetings) to justify reserving a one-on-one table for an incremental conference fee.

Historically the meeting has been referred to as a “top to top” meeting with senior manufacturer and distributor meeting getting together with manufacturers “sharing their vision”, “reinforcing their commitment” to the channel / specific distributors and seeking to “strengthen relationships”.  All noble causes.

Some insights / input

  • The energy of the meeting, according to a number of people during the meeting and afterwards, was “okay.”  Not as energetic, upbeat and optimistic as the regionals earlier in the year.
  • A number of small and medium manufacturers and distributors lamented their inability to get meetings as well as lack of networking opportunities. Part of it is that many major manufacturers and distributors seemed to never leave their suites and/or meeting rooms and the structure of the hotel involves utilizing 3 floors for networking areas and meeting rooms thereby negating some “hallway encounters.”
    • Conversely, for large distributors / manufacturers, their goals were achieved.
  • Some for the educational sessions seemed to have decent turnout … 50-100 people.
    • Potentially more could benefit if companies didn’t feel the need to have all attendees attend all of their meetings (and perhaps have someone update non-attendees.)
  • According to a number of distributors, the topic of “controls” / IoT / IIoT was discussed much by manufacturers.  Leviton, Legrand, Lutron and the lighting companies focused on this as an opportunity.  ABB and the automation control companies also focused on this. Distributors heard much but left wondering “how do I capitalize on this?” In post meeting discussions, the question becomes “are customers ready?”, “is my sales force prepared?”, “why are my customers not talking about this?” and “do I have the right business model to capitalize on this?”  All good questions.
    • In the industrial space, topics such as “predictive maintenance”, “predictive analytics”, dashboards and understanding production goals and cost savings are introducing new nomenclature into the decision-making process.
    • Some distributors sense a services opportunity due to controls.
  • Business has tapered off from earlier in the year.  Aside from the lighting market, a number of manufacturers shared mid single digit growth, nationally.
    • Wire / cable market seems to be “slow” from a unit perspective (as pricing can distort).  This is nationally as the market can be very locally-oriented given the local construction market.
    • Heard of two major lighting companies admitting that they have been affected by smaller / foreign manufacturer pricing for small projects who are coming out with “trade / contractor-grade” lines (also a euphemism for lower cost.)  Everyone laments the speed of change and eroding margins in the LED fixture space.
  • Some discussion regarding Omni’s pilot initiate with Eaton and Schneider Electric. Many taking a “wait and see” attitude” with little appetite for providing directives within their organizations to proactively manage the business away from breaker “brokers” as “price trumps” and “haven’t had liability issues / concerns.”
  • The Manufacturer Advisory Council met. About 75 attendees. The council provided an overview of its mission and solicited input from the audience on potential issues for the Council to pursue. A few key requests related to helping smaller / mid-sized manufacturers generate a better ROI for their time / investment at NAED meetings, having more frequent meetings (at regionals) to get more manufacturers involved and exposed, support of the NEMRA POS / POT initiative, reinforcing NAED value proposition and specific programs (manufacturer internships, NAED training programs) …essentially complement NAED initiatives.  The Council will be sharing its notes. If interested, reach out to Frank Dantona.
  • The panel on the future of independent distributors was good although heard some comments afterwards that some distributors would like “harder, more direct, questions” but, politics and politeness must prevail in a general session environment.  If you are interested in this topic, click here for a four part video series.  Overall the session is good with a number of good thoughts / idea generators from the participating distributors.
  • The Boston Police Commissioner presentation on leadership was well received.  For leadership in a crisis it’s all about the relationships that have been built.  It should be noted that the last time NAED was in Boston was during the Boston Marathon bombing.
  • The session on IoT, “Rise of the Machines”, was interesting and started out very relevant from an industrial perspective with specific business applications (which infers that to sell the benefits distributor / manufacturer salespeople need to be at a high enough business level to influence / create the opportunity otherwise “you” will be the “box provider.”
    • Distributors serious about this space may want to consider an industrial consulting firm model (may depend upon market density) to focus on business and process identification.
  • Feedback on the acquisition market was “quiet”.
  • eCommerce was a topic with some although none are seeing eCommerce, defined as “point and click” being 10% of sales (usually closer to 5%).  The benefits of a commerce enabled site complete with robust product content is being measured in other ways, albeit some are questioning the dollar investment but are recognizing that if they don’t do it, starting “tomorrow” could be too late as it takes time to get the site “up and running.”
    • Focusing on “the customer journey”, or defined as “following an order”, may have greater “immediate” traction.
  • NAED mentioned a Cross Reference tool that has been developed and is available for licensing by Datagility to distributors.
  • Heard that the NAED Chairman’s Dinner was nice although reportedly only about 200 people attended as others sought to leave a rainy Boston on Friday afternoon.  Click here to see pictures (and some pictures of the conference.)

Overall a good event to reconnect and re-calibrate, however, as mentioned, the “energy” seemed to be missing.  End of year projections are on-track for about 5% growth as no one seemed to see major policy changes coming from Washington to affect the economy.  But, given the past few years, everyone will take the growth.

How was the meeting for you?

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