Earlier this year, Rexel announced a major strategy change to shape the company for the rest of 2018 and beyond. At the NAED National Meeting in Chicago, in a room packed with National Meeting attendees, the company held a breakfast for its supply chain partners to explain the changes.
Then during the audience question and answer session, discussed its future acquisition plans, along with its thoughts on Amazon and Amazon Business.
Jeff Baker, Rexel USA CEO, talks Rexel strategy to a large crowd at the NAED National Meeting.
Since Rexel is a world-wide business, it is changing its strategy to be more regional. It wants regional customers to ask local Rexel leaders questions, and get answers right away. As Jeff Baker, CEO of Rexel USA explained, “We have 8 regions with 8 organizations (in the United States) that make their own decisions. They are make decisions locally. A lot of decisions do not end up on my desk. We tell our regional leaders ‘you own the decision, do what you think is right.’ This is about speed, simplicity, accountability, and moving quickly. As a result, we will be protecting our key customers.”
Baker added there are 6 key areas Rexel will focus on for the rest of 2018:
- Stay the course
- Business simplification with our customers and our suppliers
- Continue the momentum in proximity business (regional structure)
- Capture more large project and national account business
- Accelerate strategic supplier focus/offer a plan
- Digital/multichannel- make every customer a multi-channel account
“Margin is a function of value. And we are increasing value,” Baker said.
As far as what it has accomplished already in 2018, Baker pointed to Rexel’s achievements.
- 15 branch resets
- 2 branch relocations – (moved them to desirable locations for customers)
- 2 new branch openings
But, Baker also pointed out there is work to be done in 2018, including:
- 56 branch resets
- 12 branch re-locations
- 14 new branches open
Patrick Berard, Rexel CEO, explains the company’s regional strategy at the NAED National Meeting.
Those branches, according the Rexel Chief Executive Officer Patrick Berard, will be completely different from what you see now. “The branch of tomorrow is about customer care, meeting rooms, education rooms, it’s not just storage,” Berard explained. “In Switzerland, customers come and spend 3 or 4 hours at a branch to take advantage of what rexel offers as a branch experience.” Gerard pointed out that 60% of Rexel’s business in Switzerland is done digitally, so the branches are used by customers to learn about products or meet with Rexel staff. Baker pointed out that Rexel’s goal is to make sure all of its customers know as many staff members as possible, not just the individual assigned to that account.
During the question and answer session with attendees of the breakfast, a recent story in a German publication came up. The story speculated that Rexel would join Amazon in some way, including potentially partnering on projects. Rexel CEO Berard called the story false, and said there is no plan to join Amazon in any way.
“When do you sell to amazon?” Berard told the crowd. “Amazon is one competitor I have no intention to join amazon, I have no intention to sell to amazon. But I respect amazon. They shake the tress and come from another angle. They set the bar. We have an information system, and it needs to be much more fine tuned, because of Amazon.”
Baker agreed, saying while there is no partnership planned with Amazon, Rexel certainly knows the impact Amazon is having on customers. “When you came to NAED, the competition was all here. Now the competition isn’t all here because of Amazon,” Baker said. ” We have learned from Amazon, because they are a strong business. And now we are better. Amazon has set the standard and we need to keep up and we need to leap frog. We will stare the beast square in the eye and we will take charge of the things that are in our control.”
Both Baker and Berard agreed that the last mile is still key. Distributors like Rexel are able to get products to customers the way they want them, and that advantage over Amazon remains.
When it comes to potential acquisitions, something that has been a hot topic over the first half of 2018, Rexel would not rule out the potential to acquire another company. But it has to be a perfect situation. “We want to fix what is broken first,” Berard said. “We will choose our battles in certain territories. And we don’t want to buy a cheap, broken business, because it will cost too much to fix. We would like to be a part of consolidation in the U.S., but what do we do? It can’t be a mistake.”
“We want to buy businesses that have good leadership and are profitable,” Baker added. “If we have the right opportunity, we now have the bandwidth to take on the right acquisition and do a nice job of integrating that company into our plan.”
Tagged with Biggest News, Rexel