Buoyant construction industry driving demand in wholesaler sector

Katie Plumstead, Group Marketing Manager at Scolmore Group, shares the findings of a recent market report which examined the UK electrical wholesalers’ sector.

Wholesalers must remain agile, flexible and responsive

According to the latest Mintel report – the UK Electrical Wholesalers Sector Market Report 2022 – a buoyant construction market will continue to be a key driver for demand in the electrical wholesalers’ sector, although trends across the individual construction sectors will vary. In the short term, skills shortages, product supply issues and cost inflation are likely to constrain growth across the construction sector.

Despite a 13% decline in 2020, electrical wholesalers saw its value increase by 9% in 2021.

While supply chain constraints have started to ease in recent months, the Russia-Ukraine conflict and related sanctions are expected to cause renewed disruptions to supply chains. Wholesalers must remain agile, flexible and responsive in order to meet the needs of a fluctuating market.

Future market trends

Electrical wholesalers have seen a rapid increase in online competition from the likes of Amazon and multichannel retailers such as Screwfix and Toolstation. Online trading and click-and-collect services became more important than ever during the COVID-19 pandemic and the crisis has further highlighted the need for robust and future-proof e-commerce strategies. Developing digital abilities and responding to evolving customer expectations will remain one of the most pressing business challenges for the electrical wholesaler industry for the foreseeable future.

Wholesalers are expected to offset some market challenges through increased product diversification – most notably in green energy, active energy efficiency solutions and decarbonisation technologies. The increased deployment of alternative energy sources also increases the need for new functionalities (uninterruptible power supply (UPS), sensors, demand response solutions, etc.), providing product diversification opportunities. Building automation and smart buildings offer further growth opportunities, particularly smart home technology solutions, connected devices and human machine interface (HMI) products.

Whilst rising costs remain a key business concern and the need to embrace digitalisation is understood, the report also highlights the need to focus on value-added services – expertise and customer experience can help wholesalers gain a competitive advantage over online-only competitors.

Collaboration

This is where the relationship between wholesalers and manufacturers is of crucial importance. With the right collaboration, manufacturers can help wholesalers to add value to the electrician and contractor customers they deal with on a daily basis.

The Scolmore Group of companies works closely with electrical wholesalers of all sizes, from small independent outfits, through to the large national players and the various buying groups. Helping wholesalers to add value to the service they provide can take many forms and cover many aspects of the whole business operation. Having the right products and stock levels is key to ensuring the smooth supply of materials that the contractor needs to complete a project. By working closely with contractors to understand the products and solutions that will help them meet their requirements, manufacturers can ensure that wholesalers are stocking products that are cutting edge and designed to help contractors deliver projects quickly, reliably and safely.

It is important that the products being supplied meet all the relevant quality standards and regulations. Wholesalers don’t want customers returning faulty or inferior goods and will seek to partner with suppliers they can rely on to uphold the highest standards of quality and service. All Click Scolmore BS1363 socket outlets, for example, bear the BSI Kitemark and the company has held this certification for over 25 years – a clear demonstration of the company’s commitment to adhering to the highest standards of quality and safety of the products it supplies to the professional electrical market.

What Scolmore is now seeing from the wholesaler is much more emphasis on the marketing effort, with more resources than ever being invested in this area of their business, particularly in digital and online strategies. By building strong relationships with the wholesalers’ marketing teams, manufacturers’ marketing teams can work closely with them to create powerful content and help maximise the impact and reach of the various promotions and campaigns that are targeted at the sector.

Expertise and customer experience can give wholesalers the edge over online-only competitors

By working closely with contractors, manufacturers can ensure wholesalers are stocking cutting-edge products

Scolmore, scolmore.com