Distributor Services Sharpen Electrical Contractors' Edge

As customers increasingly demand more complex and technologically advanced voice/data/video (VDV) systems for their facilities, electrical contractors must rely more than ever on their distributor partners to supply the value-added services that will strengthen their competitive edge.

“One key factor the distributor needs to focus on is technical knowledge about all the available low-voltage and VDV products,” said Pete Lockhart, vice president of technology for Anixter, Inc., Skokie, Ill. That knowledge allows the distributor to make the proper product recommendations that will provide the best solution for the application. “It is also critical that the distributor offers technical support to the contractor and is fully aware of how the different systems in the facility are integrated,” Lockhart added.

Anixter has specialized in distributing wire and cable products since its inception in 1957. The company expanded into the communication and video cable business in the 1980s, when the communications market exploded with the divestiture of AT&T. Last year, VDV sales accounted for about 51 percent of total sales. “VDV sales have held at about half of our total business since about 1983,” Lockhart said.

Anixter offers its customers various value-added services, including an on-line e-commerce business-to-business option, an automatic replenishment program, integrated supply, and business and technical training. Anixter’s specialized technical support program covers courses in areas such as voice and data networks, closed-circuit television (CCTV) and security systems, broadband video, access controls, and wireless local area networks (LANs). “Any service the company can provide that adds value to the product and that reduces the customer’s cost and increases its productivity and efficiency makes the distributor a more vital partner,” Lockhart added.

Since being founded in 1984, Accu-Tech Corp., Roswell, Ga., has specialized in wire and cable distribution. By 1987, the company had recognized the emerging structured cabling market. More recently, the company has started offering security and access control systems, CCTV, and commercial paging systems. “These market segments are a natural outgrowth of our basic core business, as many of these systems are now operated on computer networks,” said Andrew Jones, director of electrical contracting sales.

Jones believes that to differentiate itself from the competition, a VDV distributor must focus on the VDV business, rather than treat this market as a sideline. “This allows the VDV distributor to be more knowledgeable and competitive, and to provide a higher level of service to its contractor customers,” he said. The company provides its contractor customer base with a great deal of product and technical knowledge. “This information is vital to the electrical contractor’s success, and cannot be gotten from a strictly traditional electrical contractor,” Jones added.

Communications Supply Corp., Carol Stream, Ill., has been a telecommunication products distributor since 1972. The industry consolidation and market convergence trends of the 1990s led the company to begin offering traditional electrical products to its customer base in 1997. “The goal is to create a nationwide distribution network with strategically located branches that can provide customers with a single source for cabling solutions for the commercial, residential, and government markets, serviced within 24 hours,” according to Howard Fox, director of marketing. Today, about 90 percent of the privately held company’s sales is from VDV products; 10 years ago that figure was about 95 percent. This percentage decrease is attributed to an increase in traditional electrical product sales, and not to any decrease in VDV market share.

The company offers contractors market-specific training about how to break into the VDV market and grow their business in this segment, what VDV products are involved, and how to obtain manufacturer-based installation certifications. “Value-added services offered by a distributor enable the contractor to perform on projects more efficiently and productively,” Fox said.

Traditional distributors and VDV

Graybar Electric Co., Inc., St. Louis, Mo., has been in the electrical distribution business since the days of Edison. Recognizing the opportunities in the VDV market as it emerged in the early 1990s, the company created a specialized sales organization to focus on that product category. “Our goal was to become a full-line datacom distributor in addition to being a traditional electrical distributor, and to become a single source for both our electrical contractor and datacom installer customer bases,” said Dennis DeSousa, senior vice president of sales and marketing.

Since the VDV market is entirely different than the traditional electrical one, both distributors and contractors that enter it must market themselves differently. “The electrical business is a much more mature and stable market, while the VDV and datacom segments are extremely dynamic with constant changes in technology and customer requirements,” said DeSousa. A “significant portion” of Graybar’s sales in 2000 were directly attributed to VDV products. “Since 1996, both our traditional electrical and datacom sales have grown at a rate faster than the industry’s,” DeSousa added.

To help its contractor customer base succeed in the competitive VDV market segment, Graybar offers value-added services, including its Verified Independently for Performance (VIP) program, which assures customers that the complete cabling system that is being installed will perform as specified. It also offers various training and seminar opportunities that focus on product knowledge and applications. “Training provides electrical contractors with the necessary expertise in datacom technologies that enable them to demonstrate to their customers that they have the ability to perform the work required,” DeSousa explained.

To broaden its product offerings, Rexel, Inc., Dallas, has acquired various VDV distribution companies since the mid-1990s. The company, a subsidiary of France’s Rexel S.A., is an electrical parts and supplies distributor that entered the U.S. market in 1986 with the acquisition of Southern Electric Supply.

Rexel’s goal is to become a single source for both VDV and electrical product groups. “The company recognized the opportunities offered by the VDV market and the increased participation of electrical contractors in it almost a decade ago,” observed Bill Albert, vice president of datacom.

VDV products represent about 10 percent of Rexel’s total sales. The company differentiates itself by attacking the business on two fronts. The first is meeting the small- and medium-sized electrical contractors’ needs; the second is fulfilling the high-end VDV customers’ needs. Its new program, Conectis, focuses on supporting these small and medium contractors with the necessary data communication products, solutions, and training through its existing electrical branch locations and through strategically placed locations staffed with expert sales personnel. “Training is particularly important for those electrical contractors trying to break into the business,” Albert said.

As the Conectis program becomes a nationwide one, Rexel will be better able to offer its customer base enhanced inventory and customer service levels, as well as to help decide where new strategic locations with trained sales personnel and inventory should be placed.

WESCO Distribution, Inc., Pittsburgh, is another traditional electrical distributor that recognized the opportunities offered by the VDV revolution of the 1990s. It is continually positioning itself to become a single-source solution for all of the electrical contractor’s product needs. Half of the company’s sales are through electrical contractors, with the rest attributed to large industrial customers. Ten years ago, sales of VDV products accounted for just a few million dollars. Recently, sales for this product category have exceeded $200 million.

“Historically, the VDV market was viewed as highly technical and specialized. Through training, electrical contractors now better understand the products and the market and have the confidence to make this type of work part of their core service offering,” said Howard Grobstein, Data Comm product manager.

WESCO’s value-added services focus on helping the electrical contractor make the successful transition into the VDV and datacommunications market. The company’s two trainers are responsible for providing both contractor customers with installation training and WESCO branch employees with the technical knowledge needed to better service customer needs. Other services include project management and technical support, design services, job staging at the local branch level, and on-site product delivery and inventory management services. “The goal is to provide the electrical contractor with all the products and services it needs to complete the project on schedule,” said Mike Ludwig, WESCO’s director and general manager.

As enterprise data networks continue to absorb voice, video, and security subsystems into an integrated and converged network, knowledgeable distributors can provide the products and services that will help them make that implementation both cost-effective and technically complete for electrical contractors. EC

BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at (410) 394-6966 or by e-mail at dbremer@erols.com.

About the Author

Darlene Bremer

Freelance Writer
Darlene Bremer, a freelance writer based in Solomons, Md., contributed frequently to ELECTRICAL CONTRACTOR until the end of 2015.

Stay Informed Join our Newsletter

Having trouble finding time to sit down with the latest issue of
ELECTRICAL CONTRACTOR? Don't worry, we'll come to you.