Distributor News: 1.3.2012

Shepherd Electric Supply to open new location

Shepherd Electric Supply will open a Frederick, Md. location on Jan. 9. The newest location will included a fully stocked warehouse and counter—the fourth Shepherd Electric Supply with these features.

According to a company news release, “Shepherd Electric Supply saw an opportunity to increase its presence in Maryland and improve support for existing customers by opening the Frederick branch.”

Who’s Moving On Energy: Four Tales

Advice for facility managers: A “web exclusive” on the website of the magazine Today’s Facility Manager talks to facility managers about their lighting options. Karl Williams, vice president of energy solutions for Rexel, Inc. wrote the piece. Williams wrote, “Depending on the services offered, a distributor can also be an excellent resource for facility managers. Since distributors are not tied to a specific manufacturer, they can offer an unbiased solution for upgrades.

“Some distributors have teams of energy solution specialists who can assist with an energy audit, design a solution, find the right contractor for the job, and provide post-installation consultation.

“One of the biggest services a distributor can provide is identifying government rebates and tax benefits of an upgrade, both of which improve ROI.”

Distributor’s advice on 100W incandescents:  According to an article on WTVA.com called “The brighter side of light bulb changes,” a distributor gave customers advice last year about the phase-out of 100W incandescent light bulbs.

Kathryn Gatlin, co-owner of Nesco Electrical Distributors in Tupelo, Miss. said, “You purchase as many 100-watt light bulbs you think you’re going to need for a year or so. You can buy them by the case and just store them in a closet and use them as needed.”       

Gatlin also said that price was a huge issue to Nesco’s customers. “It’s a consideration for us too because you know we can’t tell somebody oh you need to change every recess light in your house because they [LEDs] run around around 75 to 80 dollars per bulb.”

Generators going fast in Connecticut: A report on Greenwichtime.com noted that generators of all sizes were selling quickly in the area, a result of two events in 2011—a hurricane and an unexpected October snowstorm. The article also mentions:

  • Greenwich Hardware & Home sold 1,000 generators last year, according to Trey Kelsey owner. Cannondale Generators (Wilton) has sold 900, of which 400 were portable models.
  • “You can’t get generators right now,” said electrical contractor Tom Anderson. He estimates the wait at six to eight weeks.
  • One installation described as a 500kW generator for a 35,000 square-foot home cost $250,000.

Retrofits for manufacturers: An entry on the staff blog for the National Resources Defense Council recently tackled energy-efficient lighting. Bill Jarvis, sales manager for J&M Electrical Supply of Cambridge, Ohio (pictured below) said, “Cutting light consumption in half is the low hanging fruit. It’s a no-brainer when we sit down with the plant manager. With the new energy efficient lights, we can increase the light output and quality while reducing their overall energy costs. When we show a plant manager they can pay for the retrofit in two years, it’s a slam dunk.”

What Your Retail Competitors Are Doing

Best Buy pushes home energy efficiency & EV charging services: A report on GreentechMedia.com details the “home energy-efficiency push” at retailer Best Buy. The article says Best Buy has:

  • “three pilot stores ready to test home energy concepts”
  • an “online self-assessment platform”
  • whole-home energy audits in three cities
  • Geek Squad “garage site surveys for potential EV owners”

Additionally, there are plans to sell more energy efficiency products, including LEDs and weather stripping. According to the report, “Eventually, there will likely be a full-fledged Geek Squad just for home energy.”

During the Best Buy Energy Efficiency Summit in August, Brian Dunn, CEO, said, “We believe we’re the only folks actively wiring people into the answer, and we think that’s really important.“

First For Pros” at The Home Depot: A feature story on Home Channel News described The Home Depot’s effort to lure more construction professionals (including electrical contractors) through its doorways. The author writes, “Pros account for 4% of total Home Depot customers and 30% of total Home Depot sales.

The article continues, “Pro customers receive Pro Account Reps (PARs) to serve as a single point of contact. They receive volume pricing, job-site delivery and advance order pulling. And varieties of commercial credit — either revolving or a simple commercial account due in full each month — are available to them through the pro desk.”

Vulnerability to online retailers: A presentation on the virtues of an investment in Lowe’s, the second-largest U.S. home improvement retailer, is now available for download. Bill Ackman of Pershing Square Capital, a well-known investor, put together the presentation.

On page 10, Pershing Square looked at specific product categories carried by Lowe’s and the relative risk of competition from online retailers. The electrical category included:

  • Light bulbs, 1% of Lowes’ total revenues, high threat of Internet competition. Reason: “New LED bulbs ship well, high ticket.”
  • Technical lighting (1%), defined as “switches, dimmers,” with a limited threat from online retailers. Reason: “Low ticket.”
  • Ceiling fans (2%) were seen as facing a “moderate” risk of competition.

Putting the risk assessments to one side, the information presented seems to suggest that those three categories of product represent 4% of Lowes’ sales. Yahoo! Finance puts Lowe’s trailing 12-month sales at $49.06 billion.

Assuming Ackman’s numbers are correct, then, Lowe’s sales of light bulbs, switches, dimmers, and ceiling fans– just those items, combined – are running at roughly $2 billion per year.

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