Industry News

The National Association of Electrical Distributors (NAED) recently made available the white paper, Green Goes Mainstream: How to Profit from Green Market Opportunities. The study details current trends in the energy efficiency market, and the closely related green building and renewable energy markets. When customers ask their electrical distributor “what can you do to make my building green?” this study will provide cogent and convincing answers.

Green Goes Mainstream emphasizes that distributors must figure out how to become “order makers” instead of “order takers” to seize green market opportunities. Customers want solutions delivered by experts. As political, financial, and economic forces line up to rapidly grow the green market, distributors and the electrical distribution industry as a whole must be able to fill this role.

“The emerging ‘green’ market offers electrical distributors unprecedented opportunities for profit and growth,” said Tom Naber, president and CEO of NAED. “Energy is an issue of increasing importance and will dictate significant changes in market behavior, which is why NAED is committed to helping its members understand the nature and scale of the changes in the energy market place.”

Yudelson Associates conducted the research for the study, surveying 165 distributor and 63 manufacturer members. “Our research shows that energy efficiency, green building and renewable energy will provide a major growth market for sales of electrical products and systems over the next half-decade, as the energy issue comes front and center in the consciousness of building owners and managers,” said Jerry Yudelson, principal. “Distributors who make the effort to learn about this emerging market are likely to see growth in sales and profits as a result,” he continued. Yudelson Associates also reviewed current market literature and interviewed more than 30 leaders throughout key market sectors.

Additionally, members of the study’s task force held several teleconferences throughout the summer of 2008 to determine and refine the study’s scope and overall direction. They include:

· Steve Anixter, Advance Electrical Supply Co., Inc.
· Michael Barker, Springfield Electric Supply Company
· Warren Janes, Maurice Electrical Supply Co., Inc.
· John Kimmel, Lithonia Lighting, An Acuity Brands, Inc. Company
· John Selldorff, Legrand North America
· Bill Snyder, Schneider Electric
· Mitch Webb, State Electric Supply Co.

The study’s recommendations are presented in a convenient A, B, C outline representing distributors’ various levels of commitment to green markets:

· Feet Wet: Distributors who want to understand the market but who are not yet ready to fully commit to it should become more knowledgeable about local utility and state incentive programs and focus on lighting upgrades and motor efficiency upgrades with variable-speed drives.

· Up to the Waist: These distributors can begin training their existing sales force about green markets and technologies, and can seek to either develop or hire qualified sales staff dedicated to the lighting retrofit market.

· Fully Immersed: Distributors with the resources and desire to fully commit to serving these markets can hire specialized sales staff and provide financing (directly or indirectly via a partnership) to “lock in” sales with key corporate and institutional customers.

For distributors who want to become more knowledgeable about energy markets, the appendix of the study offers a list of extensive resources and a glossary of some common terms used in the energy efficiency, green building, and renewable energy markets.

NAED members are encouraged to use this study as a resource manual to help them take advantage of new opportunities arising from the convergence energy supply shortfalls, dramatically increasing oil and energy prices, and an insistence on a measured response to climate change concerns. These forces represent not only a challenge to American business, but a tremendous opportunity to electrical distributors.

Funding for this project was provided by the NAED Education & Research Foundation through the Channel Advantage Partnership endowment. More than 46 electrical distributors and manufacturers have pledged more than $7.9 million since the endowment’s creation in 2003. The NAED Foundation supports projects and programs that strengthen the electrical distribution channel.

NAED member companies can access an electronic version of the study for free from the NAED Learning Center. Printed versions of the study are also available for purchase by NAED members ($20) or non-members ($999). Contact NAED Customer Service at 888-791-2512 or [email protected] for more information.

NAED is the trade association for the $70+ billion electrical distribution industry. Through networking, education, research, and benchmarking, NAED helps electrical distributors increase profitability and improve the channel. NAED’s membership operates in approximately 4,400 locations internationally.