By Jim Williams
tED Magazine is continuing its series of reports on AmazonSupply and the impact on our supply chain. Previously we have written about innovation and data. Today, writer Jim Williams talks to an electrical contractor about how he really “shops” for products, and how he buys his products. We have documented in previous articles that 70% of distributors are being forced to drop their prices to compete with contractors ‘shopping’ online for products they normally obtain through normal distributor-contractor relationships.
Spenser Villwock is the perfect person to talk to about the pulse of the industry. As CEO of Independent Electrical Contractors – Rocky Mountain (IECRM) he works with contractors AND distributors.
We talked with Villwock about the changing technological landscape.
tED: How are contractors buying/shopping?
Villwock: Some of it really depends on the size of the contractor. Some are a little more sophisticated than others of course. The smaller contractors may pull up a Google web page trying to research what is out there. I do know that some use the Amazon sites to be able to navigate through because it is a pretty extensive list of what is available out there.
Mid- to large-size companies that have purchasing agents will have a bit more sophisticated point of view to research out there. They will learn a bit more about the product. They’re not afraid to price shop a little bit by using search tools on the web and even make phone calls to different distributors as well. People are inclined to want to do a little bit of their own research so they know what they are talking about when they are looking for a specific product and some of that can be accomplished through a couple of quick internet searches to understand how the market might play.
But I think there have also been some stories of people getting burned in that scenario. Something that is 20% under market is sometimes too good to be true. And that comes back to get you through hidden costs…shipping and handling, etc. It has become buyer beware of what’s out there. But, inevitably, contractors are still using Google searches to educate themselves as to what their options are.
tED: How can distributors compete?
Villwock: I think that distributors should be savvy enough to do some searches of their own. They need to put the shoe on the other foot and look it from the contractor perspective. Do their own searching to see what comes up and then look into a few different options. See if there are hidden costs or where they are compared to the market price. What are the different options out there? And help to explain the value of what they provide back to the contractor, whether it be the customer service piece that is critical in what makes their distribution operation unique.
Compare that one-on-one relationship to the risk of getting onto a site and ordering something without knowing what is on the other end and not having that accountability and that relationship at all. I would encourage distributors to understand these are things that are happening in today’s business market place. Again, they need to try and put the shoe on the other foot and do their own research and see what comes up in different internet searches. They need to know who their competitors are and what they are offering. Then take that information and share it with their current clients and anyone else who might walk in their door – what they perceive differentiates their distributorship from what someone pulls up on a random internet search.
tED: Is it true some contractors – distributors too – don’t want to, or can’t invest in technology?
Villwock: People aren’t feeling empowered to open up a web browser and do a little research. The best way a distributor can arm themselves, or be able to participate in that conversation, is to know what their customer is looking at and be able to have ways around that conversation and be able to explain what they are looking at and the value they provide. I’ve been on record recently saying there is some sort of a generational gap within our current workforce and we need to pay attention to technology. We can’t stick our heads in the sand and think it is going to go away. We need to make sure we are keeping up with the Joneses.
I think the way the market place is going, the way the construction market is working – time is everything. Efficiency is critical and there is a lot of merit within technology tools in the construction world that you didn’t see last year or five years ago – in that we are demanding from owners and general contractors, especially in the electrical industry faster deliver time and productivity. I understand why some companies shy away from internet tools and try to rely on a bit more of the old school nature of how they’ve done business in the past, but inevitably, the game is changing and we need to stay competitive within the environment or, unfortunately, we risk going the way of the dinosaur.
So investment into technology; whether in the form of web sites, tablets, computers, applications that will enable guys in the field to order supplies they need with a touch of their finger or thumb and then have it pushed out and delivered – those are the things that are going to separate the distributorships in the construction industry in the next couple of years – who is going to take those risks and investments to be able to then help the end user save time, save money and meet their deadlines in the most effective way?
A lot of that’s no longer talking person to person. We’re looking at pushing buttons and swiping screens and things like that to be able to get our job done. I think, like anything in business, there’s going to be a lot of trial and error, but it’s inevitable that we all agree that technology, especially the smart phone, is what helps dictate our lives, whether it be a text message or an app, email or phone call or whatever. We need to be available 24/7 and respond as quickly as possible. That’s what is going to separate the good and mediocre from the truly great.
For over 30 years, the Independent Electrical Contractors Rocky Mountain (IECRM) has been the leading electrical and renewable energy contractor association in Colorado and across the nation. Operating in 53 different areas across the United States and representing 215 member companies responsible for $2B annually, and educating over 725 electrical apprentices and licensed electricians annually, IECRM is dedicated to educating, promoting, and advancing the electrical industry.
Spenser Villwock, CEO of IECRM, is keenly focused on keeping contractors at the cutting edge of the energy industry through innovative skills training and workforce development. He works with both contractors and distributors. Villwock holds a Master’s Degree in non-profit management (MNM), LEED-AP (Existing Buildings) accreditation, and an undergraduate degree in English Literature.
With professional experience in leveraging market demand, political advocacy, environmental issues, philanthropy, leadership development, capacity building, and running two start-up companies, Spenser is an authority on developing community programming and policy to maximize impact.
Find out more about Spenser Villwock and IECRM at https://www.iecrm.org/.Tagged with tED