An international advisor study published by LEDVANCE has recommended that electrical wholesalers raise their corporate profile to remain competitive in a price-focused market.
LEDification, Smart Home, digitalization – these megatrends are about to drastically change the international lighting market. The associated challenges influence the demands of professional end-users and therefore also affect electrical wholesalers.
In an international survey, the lighting company LEDVANCE has analysed the situation using the example of the lighting sector. The key finding: in order to be successful in the continuing price war in the long term, wholesalers need a clear company profile that offers tangible value propositions to their customers, especially the electrical contractors.
The changes in the lighting market entail both difficult challenges as well as significant opportunities for electrical wholesalers. "Concerning branding, wholesalers have depended too long merely on the prominent manufacturers’ brands in their assortment. However, that's no longer sufficient due to the mass of new providers, increasing price pressure and the growing density of information in the digital era. The study shows that wholesalers should strengthen their visibility as a company to differentiate themselves from their competitors," explained Oliver Vogler, Vice President Strategy & Marketing at LEDVANCEand one of the authors of the study. For this reason, according to Vogler, they should selectively carve out the preferences of their specific customer groups, yield a clear added benefit particularly in the LED and Smart Home sectors and thereby escape the price war with LED products.
Further results from the international advisor study from LEDVANCEindicate that this way forward is highly promising. Asked about their top priorities when selecting an electrical wholesaler, 55% of electrical contractors said that trust in the company is the most important factor.
Electrical contractors vs. wholesalers
Simultaneously, the price itself is not the greatest concern for electrical wholesalers fighting to attract electrical contractors, their most important customers. On the contrary, 70% of those responsible specified their largest challenge until 2020 is offering the correct and most innovative product portfolio. Suitable pricing follows (61%) and then the increasing competition from online traders (53%).
This expectation only partly meets the preferences of the electrical contractors. It is clear that when selecting a wholesaler, the price alone is decisive for only a minority (25%) of the queried electrical contractors. 68%on the other hand place a focus on good, trustworthy relations or a broad portfolio of innovative and consistently available products.
Differing expectations with digital channels
The study also unveils varying expectations concerning the possibilities of digital platforms. Wholesalers assume that when electrical contractors purchase online the simplicity of the order process (59%) and the wide portfolio (47%) rank first, but in reality, they prefer the possibility of comparing products (55%).
In general, the authors advise wholesalers to gain a detailed impression of their variety of own customers and to directly communicate with these via active company positioning and a succinct value proposition and delivery.
Find the detailed survey from LEDVANCEwith all results here.
For further information about the LEDVANCE company, see www.ledvance.com.
