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Life on the Front Lines
of the Pandemic

Representatives of several IMARK Electrical member companies discuss the current situation on the ground at their firms and their predictions and hopes for business in 2022.

Michael Cunningham vice president, sales & marketing, Nedco Supply
Rocky Kuchenmeister general manager, K/E Electric Supply
Robert M. McCurdy president, ALLIED Wholesale Electrical Supply, Inc.
Amanda Wolfe residential lighting division manager, NorthWest Electrical Supply

From material backlogs, price increases, labor shortages and project delays to the ongoing necessity of COVID safety protocols, electrical distributors have borne the brunt of the many challenges of the past 18-20 months. But how have these essential businesses dealt with these obstacles…and is there an end in sight?

Following, executives from several IMARK Electrical member firms nationwide discuss the current state of their operations, lessons learned from the pandemic and their hopes for business in 2022 and beyond.

IMARK Electrical Now: Thinking back to January 2020 (before the COVID pandemic started taking hold), what do you feel is the most long-lasting (or permanent) change to the way that distributors service and engage with their customers as a result of the pandemic and why?

Robert M. McCurdy, ALLIED Wholesale Electrical Supply (Indianapolis, Indiana): We were different than our competition in that we didn’t change; other than the obvious masks and “spit guard” at the counter, we remained open with full service throughout the pandemic. We heard too many complaints from customers about how other distributors in town were “curbside only” and “call ahead only” and we decided to remain open and conduct business as usual. The only remaining items from the pandemic are the spit guard and the courtesy hand sanitizer.

Amanda Wolfe, NorthWest Electrical Supply (Mt. Prospect, Illinois): Virtual communication tools have been key and the more ways we have to engage the customer (outside of personal one-on-one meetings), the greater success we’ve seen. The biggest change we focused on was developing a more robust and detailed website. Clients at home have used this tool often to research items that might work for their project and it’s helped them to have something in front of them to call about and discuss with us.

Rocky Kuchenmeister, K/E Electric Supply (Mt. Clemens, Michigan): The pandemic forced the industry to evolve into the 21st century. Many of us were selling like it was the 1980s or 1990s with weekly doughnut runs and weekly price sheets that are faxed or emailed over. Now we’re selling value-added services, selling online and conducting video conference meetings with our manufacturer and customer partners. Flexible work schedules, work-from-home policies and à la carte benefit packages are offered to staff, mimicking leading-edge industries and offering our customers a better experience through a more engaged staff.

Michael Cunningham, Nedco Supply (Las Vegas, Nevada): When we think about our contractor partners and how we service or engage them, now more than ever we have to be willing to meet them where they are in the midst of any situation or given point in time. Prioritizing the needs of our partners and our willingness to adapt our structure and resources in an effort to provide them with the sales support required to succeed continues to come first. One minor change we’ve made is to place a higher priority on understanding how our customers are dealing with unprecedented disruption to their business while managing through the same disruption on our end.

IMARK Electrical Now: In terms of personal interaction with customers, how would you assess the current balance between face-to-face selling and other types of info sharing (i.e., Zoom, your company’s website, etc.)? In general, are customers making it clear to your company how they want to engage? How do they want to engage?

Wolfe: Customers are definitely spending more time online and researching prior to entering our doors. Post-pandemic customers are much savvier and expect quick, reliable products to be shipped directly to them (or at a minimum, not cause them any inconvenience to receive). Many of our retail clients still want that personal one-on-one time, but many of our contractors have adapted to the use of curbside pickup by calling/texting in their orders prior to arrival; it shortens the time they spend getting materials by combining these two things. If you’re not showing your products and data online, then you’re probably not in the game. We’ve also seen an uptick in text communication and during the shutdown, we added a new phone number to our queue so that contractors could text in their orders. We find that Gen Y and Gen Z clients are liking the use of this tool more and more and we don’t see it going away.

Kuchenmeister: Customers are telling us how they want us to interact with them. Some prefer the legacy way of communication—regular visits mixed with phone calls and emails. Other customers are communicating with us via text message, video conferencing and online ordering. We try to customize our approach to each customer to maximize our interaction with them.

McCurdy: We haven’t seen much of a change. We expected that the old ways of our salespeople would go by the wayside, but as things eased up, customers welcomed them back with open arms and wanted the personal interaction. We never really embraced Zoom/virtual interaction with our customers, but we did start having inter-company monthly meetings via Teams, which we hadn’t done in the past, so something good came out of it.

Cunningham: Currently, a large majority of our interactions are face-to-face with our contractor and manufacturer partners. Where we see the majority of web-based interactions is with our larger, more corporate manufacturers. In general, our communication with our customers has been very good and they’re more than willing to let us know what their expectations are and how they want to be engaged in the current environment. Most if not all of them are willing to meet face-to-face, being mindful of the safety of their employees through the use of masks and adherence to state and local mandates.

IMARK Electrical Now: A recent survey of IMARK Electrical members showed that customer events (e.g., golf outings, cookouts, mini trade shows, etc.) are very important relationship builders for IMARK Electrical members. How have you navigated these face-to-face interactions over the past 18-20 months and do you believe that these activities will continue to be utilized by distributors in the long-term? Why or why not and/or how?

Kuchenmeister: One thing that hasn’t changed because of the pandemic is relationship selling. Events where we build rapport with our partners are still important; in fact, these events will become even more important ways to engage our partners outside of the normal work environment. Communications via email, text and online selling are less personal; events like golfing and cookouts bring a personal relationship to the sale. Navigating these events can be tricky, though, so bringing a thoughtfulness to the event will help ease the concerns of your customer; for example, taking into account reasonable accommodations makes the customer feel like you care about them. We held a golf outing in 2020 and our marketing department thought through how a customer would feel at a large event in the middle of the pandemic. Those at registration wore masks and handed out pre-packaged swag bags that included hand sanitizer and a mask. The buffet was eliminated and food was individually served. People were also kept outside and distanced before and after the event.

Cunningham: We host our “Nedco Annual Product Expo” trade show every fall to showcase new products from our manufacturer partners, spend time with our customers and thank them for their continued support of Nedco Supply. Unfortunately, in 2020 we cancelled the event due to the reluctance of manufacturers and contractors to attend in combination with the mandates of state and local government. I’m happy to report that we just hosted our event again this year and had an amazing turnout with more than 80 vendor tables and 820 attendees. Many customers and vendors thanked us for hosting the event and for giving everyone a reason to get together and promote an industry we all care deeply about.

Wolfe: Honestly, we’ve seen a decline in these types of events during this time. The large-gathering counter days and outings we used to host have taken a back seat as we err on the side of caution with all of the COVID complications. We do believe in the importance of these personal interactions, however, and we look forward to the days when they can be part of our relationship-building strategy again.

McCurdy: I’ve heard quite a lot lately that larger companies aren’t allowing the time or the funds for customer golf. If you’re a golfer, you understand how much you get from spending 4-6 hours with a customer in a non-work setting. We still feel that activities like golf, fishing or shooting rifles are invaluable when it comes to relationship-building and long-term business development. Even during the pandemic, our salespeople continued to entertain when it was allowed by the customer.

IMARK Electrical Now: What is the greatest lesson you’ve learned from the unprecedented challenges brought on by the pandemic?

Cunningham: We learned that even in the worst of times, there are opportunities to improve, fine-tune your organization and provide better service to your customer. At the end of the day, we have to be the best at servicing our customers. We made the strategic decision not to close off our business to customers like some of the larger national chains did, and, while abiding by the local and state requirements of social distancing, mask mandates and CDC recommendations, we kept our counter and building open and our employees here. We’re an “essential” business and we took that to heart. With regard to inventory, we continued to invest in and maintain or increase levels at a time when our competition was cutting back. As a result, we were in a position to provide a much higher level of service than our local competition.

McCurdy: I’ve read article after article about how different things were going to be once the pandemic eased—e.g., salespeople would be eliminated, counters would close, everyone would work from home if they could, etc.—but I don’t see any of that happening. If our company learned anything during all of this, it’s that we’re still a people/relationship business and customers need our expertise as distributors. I think we also learned that we’ve gotten soft over the years and when employees were out for COVID-related reasons and we were running lean and mean, it felt good to work a little harder to cover for your peers.

Wolfe: Lessons we learned are to check stock levels on everything and under-promise and over-deliver when you can. We used to be able to quote a standard-practice lead time on most items. Nowadays, we use stock portals provided by manufacturers and Lights America to verify what our lead time quotes should be. These portals are a new necessary evil and all vendors should make sure they have one. Nothing should ever be promised and we’re very careful in our wording when quoting timelines to our customers more than ever today.

Kuchenmeister: We learned that when faced with an enormous challenge, we can rise above it if we work together.

IMARK Electrical Now: While overall demand is strong, rampant price increases and product shipping delays are creating continued challenges for construction professionals and the distributors that service them. What’s your company’s general sense of/projections for business conditions in 2022 and why? Do you think that material costs and labor shortages will crimp the demand for new construction in 2022?

Wolfe: The optimism is out there for a successful 2022; however, it’s expected that many products will still be delayed in the first half of the year. Many of our vendors have developed strategies to bulk up and deliver what they can to keep things moving forward. We believe that delays might slow projects down, but overall we’re optimistic about growth in 2022.

McCurdy: Before today, I was always able to buy my way through an inventory shortage and price increases, but not this time. I keep saying to myself that there’s no way PVC prices are going to go any higher, but then they do. I don’t ever remember a situation where I couldn’t just throw money at inventory and compensate for a manufacturer’s inability to ship, but this time I can’t. I can order as much as I want, but it will get cut down for allocation and I won’t get any of it or they just won’t have it. It’s so frustrating. Material costs have to stifle business at some point, but they haven’t. Lack of inventory has to stifle business at some point, but it hasn’t either. Every builder we’ve met with is expecting exponential growth next year, but they can’t get garage doors or single gang boxes or breakers, so I don’t see any way that this business environment is sustainable. I recently met with a builder who said that one of the big electricians they do business with is working on a mold for single gang boxes and expects to start manufacturing them himself. I think that’s awesome and I hope he’s successful with it. What better way to overcome manufacturing issues than to start manufacturing yourself? That’s just being resourceful.

Kuchenmeister: Demand will continue, but so will material and labor shortages. We may see some relief in certain areas in 2022, but the general conditions will continue. Inventory will continue to be king and value-added services will continue to be important to our customers to help offset their own labor shortages. Lastly, inside sales and customer service will be vital to growth in 2022.

Cunningham: Over the last quarter, our team has spent a lot of time discussing what 2022 will look like. The challenge facing all of us is that there are more unknowns now than ever before in our business. Going into 2022, the single and multi-family residential sector looks strong, our state continues to make efforts to diversify its economy and attract other businesses outside of gaming and there are multiple projects ramping up. However, headwinds caused by inflation, material shortages and the current labor shortage do pose a threat. We’re surprised that these headwinds haven’t slowed business more to this point. Looking at 2022, you’d think that there has to be a point where the impact of inflation and labor and material shortages on projects becomes unsustainable and affects demand in the short term.

IMARK Electrical Now: Finally, what’s your biggest hope for 2022 and beyond?

McCurdy: With all that’s gone on in the world, it’s been a great year and I assume a great year for all distributors, not just us, thanks to commodities finally going in our favor and PPE money, reduced labor costs due to working at home and government assistance when employees had to take off. It would be exciting to think that this was sustainable, but it really isn’t. My biggest hope is that manufacturers can get caught up and that we can fulfill the demands of our customers at whatever price material is at the time. Obviously, our margins will come back down to reality, but nothing is more satisfying to a distributor than being able to sell, sell, sell when the demand is there—and the demand is there right now!

Wolfe: Our biggest hope is to never hear the words “it’s on the water” again! In all seriousness, I hope we remember the partnerships that formed during this crisis. The sense of community we felt within the industry in the form of peers trying to help out with shortages whenever possible, vendors dedicating resources to provide us a hands-on data stream while also fighting hard to get our products into the country and more. It hasn’t been easy for anyone and the more we can empathize with the situation and our industry colleagues as a whole, the better off we’ll all be moving forward and continuing to build great partnerships.

Cunningham: For 2022, we hope to see a return to a pre-pandemic way of life. Businesses, like people, are stronger when together and weaker when divided. There’s a desire to get back to business as usual in a world not muffled by masks or separated by social distancing.

Kuchenmeister: Our hope is that electrical distribution will continue to thrive and that the business will be passed on to the next generation and they’ll continue to evolve our industry into the 21st century. Most of all, I hope that we continue to care about each other.