EDA Sector Survey 2019: insights into the old manufacturer+wholesaler+contractor three-step

The Electrical Distributors’ Association (EDA) likes to keep a finger on the pulse of the electrical supply sector by commissioning regular surveys of the mood of the three-step-supply chain that it serves: the manufacturer – the wholesaler – the contractor.

The 2019 survey was carried out by Voltimum in May and June of that year, and they received 298 responses from 414 electrical contractors, 79 manufacturers and 75 wholesalers. It makes for interesting reading whichever part of the lighting sector silo you’re looking out from.

My silo is, of course, that of the specifier. It means that I have control over the selection of manufacturer – and that can have some influence over any possible baleful influence of any wholesaler (it happens!) but I have no control over the choice of contractor. I do like to meet the contractor before any 1st fix work gets under way, just to check the cut of their job . . . and to see if they really understand how to wire a SwitchDim driver. A word to the wise: once you’ve spoken to the contractor before the work starts, do it again with the guy actually on site . . . just in case the message didn’t get through.

Here are a few of my personal highlights from the EDA Sector Survey 2019:

Who responded to the survey:

  • The manufacturer: half were in ‘leadership’ roles; 34% in ‘marketing; only 13% in ‘technical’.
  • The wholesaler: a whopping 92% were in ‘leadership’ roles.
  • The contractor: Just under half in ‘leadership roles’ and 31% in ‘technical’. Only 12% in ‘marketing’.

Most intriguing: that 12% of contractors have a marketing department.

Company size:

  • The manufacturer: 41% employed more than 200 people; with 30% employing 50-200 people; 29% employed less than 50 people.
  • The wholesaler: 43% employed less than 10 people; 26% employed 11-49 people; 31% employed more than 50 people.
  • The contractor: 73% employed less than 10 people

Most intriguing: that almost a third of manufacturers supplying the wholesale network employ less than 50 people.

Company age profile:

  • The manufacturer: 60% are aged between 36-55, with 38% being over the age of 56.
  • The wholesaler: 66% are aged between 36-55, with only 23% being over 56. 11% are aged 19-35.
  • The contractor: Over a half (54%) are aged over 56, with 40% age between 36-55. Only 6% are aged between 19-35.

Most intriguing: the age of contractors – in an age of enormous technical innovation and development. Might mean something; might mean nothing.

BIggest business concern:

  • The manufacturer: by some margin (35%), the manufacturer is most concerned with product availability, quality and price.
  • The wholesaler: digitalisation and online sellers (30%) just pips cash flow and margins (28%)
  • The contractor: Up there at 64% and showing even more concern than the manufacturers is product availability, quality and price. Cash flow and margins comes in a distant second at only 20%.

Most intriguing: that only 5% of wholesalers see product availability, quality and price as a major concern.

So what about product quality:

  • The manufacturer: 58% are reporting an increase in new and unfamiliar brands, with 70% being concerned about the quality of many products currently on the market.
  • The wholesaler: the percentages for the manufacturer are reversed, with 70% reporting an increase in new and unfamiliar brands, with 54% being concerned about the quality of many products currently on the market.
  • The contractor: Almost in lockstep with the manufacturer; and 52% are reporting an increase in new and unfamiliar brands, and 76% being concerned about the quality of many products currently on the market

Most intriguing: that all respondents are seeing a decline in the number of trusted and familiar brands available (M: 28%; W: 27%; C:29%)

Quality, price and validation:

Oh dear, someone not reading the script, here.

88% of wholesalers believe that their customers (the contractors) ask for the lowest price product, even if the brand is unfamiliar. Contractors also get a bad rep from 63% of the manufacturers, who also believe that to be true,

But

80% of contractors are not happy to be buying brands they don’t recognise, even though the prices may be lower

Most intriguing: is the suggestion that wholesalers are offering low price unknown product to contractors . . . who are not happy about it.

Let’s drill down into this. What about proof of product reliability:

  • Manufacturers: 26% rely on product warranties and 21% on third-party testing
  • Wholesalers: 31% are loyal to their suppliers and 16% trust the brands. But 9% reckon that ‘you can not know’.
  • Contractors: 35% trust the brand, but 31% say that you can’t know. 16% of contractors trust the wholesaler.

Most intriguing: as well as the apparent lack of faith in the wholesaler from both manufacturer and contractor, little trust is put in manufacturer warranties (W:5%; C:10%).

Where does product information come from:

Two things seem to be going on here:

there’s the diminishing return from the universally accepted manufacturer website (M:99%; W:81%; C:85%) all the way down to the Wholesaler’s technical helpline (M:18%; W:23%; C:15%) – with all the catalogues, seminars, magazines, training courses in between.

But then there’s the disparities in perception:

86% of wholesalers think that contractors use their trade counter staff for product knowledge, whereas only 45% of contractors actually believe that.

73% of contractors make use of trade magazines, whereas only 35% of wholesalers think that.

And (given that Voltimum were managing the survey) only 9% of wholesalers believe that contractors make use of online platforms (such as Voltimum) whereas 55% of contractors claim to do so.

Manufacturers think that trade-show seminars are more useful (59%) than the contractors attending the events do (35%)

Most intriguing: there’s evidence of silo thinking here, with both manufacturers and wholesalers believing in their own strategies. This survey result may be useful to them.

So where do contractors go for information:

Contractors were only able to click one button on this one, so we’re getting an overview of the most popular route to information. Here’s the entire list:

  • Manufacturers’ websites: 20%
  • Manufacturers’ technical helpline:  18%
  • Wholesaler trade counter staff: 13%
  • Industry/trade magazines: 11%
  • Online platforms (such as Voltimum): 9%
  • Recommendations from other contractors: 9%
  • Manufacturer catalogues/brochures: 6%
  • Wholesaler website: 4%
  • Seminars at trade events: 4%
  • Manufacturer in-house courses: 2%
  • Other: 4%

There is more detailed information about the survey results published in the EDA Yearbook2019/2020.

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