GLOBAL CIRCUIT #1

GLOBALCIRCUIT A PUBLICATION OF THE WORLDWIDE IMELCO NETWORK DEDICATED TO THE MEN AND WOMEN THAT ARE SERVING THE NEEDS OF THE ELECTRICAL CONSTRUCTION PROFESSIONAL ALL OVER THE WORLD

2015 ISSUE 1

MARKETING New era of enhanced marketing offered by our group

OPPORTUNITIES E-commerce projects and initiatives of IMELCO members

NETWORKING Flying the flag for the common cause in Australia

INTERNATIONAL PERSPECTIVES ON THE

CONSTRUCTION MARKETS 1

IMELCO.COM

contents GLOBALCIRCUIT EDITOR’S LETTER

3

New opportunities for your business from IMELCO Chairman’s perspective

marketing

4

Outline of the new IMELCO marketing activities: Executive message by Elena Reignier

business

5 7 8 10

Global viewpoint:

Renovation and residential construction markets

Reno Mania hits Australia:

Boom times in Australian renovation sector

ABB update:

Tailor-made solutions for renovation and new construction projects

e-masters:

MITEGRO teams up with installers in Germany and Austria to increase modern installations

Opportunities

11 12 12

Spesa Elettrica is growing in Italy:

The dynamic development of the e-commerce site www.spesaelettrica.it

Opening new markets online in the Netherlands:

An interview with Allard Schipper, co-founder of the electrical supply e-commerce website www.omnical.nl

IMARK develops “road map” for members' websites storefront

networking

13 14 14 15 15

Flying the flag

for the common cause in Australia

Expanding boundaries: Elex Italia Convention 2015

2016 Save the date:

Celebration of the 25th anniversary of IMELCO in Paris

Bem-vindo a Portugal / Welcome to Portugal:

Networking with the owners of Portuguese wholesale business Armasul

Networking with partner suppliers:

Schedule of events taking place in June in Lisbon

If you wish to contribute to the editorial content of the Global Circuit’s next issue, please contact: Mrs. Elena Reignier | Tel: +49 511 615 99 14 | e-mail: elena.reignier@imelco.com

Editorial Board: Elena Reignier (IMELCO), Steve Ruane (IMARK), Simon Sanfilippo (ELEX ITALIA) Design & production: jerome.vadon.fr / jerome@vadon.fr Printing company: Multis / www.multis.fr All materials published in Global Circuit is copyright. Reproduction in whole or in part is not permitted without the written approval of the publisher. Copyright IMELCO 2015 - IMELCO s.p.r.l. - 1151 Chaussée de Waterloo - 1180 Bruxelles - Belgique Photo credits: Cover: © iLexx | Photodune.net / Envato - "Abstract network", p.7: © Thorsten | Dreamstime.com "House, Sydney Photo" Other material / datas : provided by third parties and published under their sole responsibility.

GLOBALCIRCUIT 2

“

CHAIRMAN’S PERSPECTIVE

Dear reader, the members of IMELCO represent the best of independent electrical distributors in 23 countries all over the world. Tens of thousands of people work to effectively meet the needs of electrical constructors.

These people are very close to their customers and have a lot of influence on which brands are selected for installation.

3

IMELCO.COM

New opportunities for your business In order to be most efficient possible, the electrical wholesale business has to have two main components: on one hand, international manufacturers having strong and consistent relationships with electrical wholesalers and solid worldwide wellknown brands to enable us to work and provide service in a concentrated and cost-effective way. On the other hand, efficient local sales partners who really know the necessities of the customers in local markets. Whatever they say, daily business remains local and we, the globally coordinated local wholesalers, are the best solution for both markets: final customers and international suppliers.

While there are many differences in the sales and marketing practices of IMELCO members around the world, there are many similarities as well.

We are pleased to provide you with the first edition of our newsletter. It is our objective to feature some of the unique and effective tactics that IMELCO members have developed to spur the sales of IMELCO supplier products all over the world.

Thank you for your attention and enjoy reading!”

Joan Garcia I Duch Chairman of the IMELCO Supervisory Board

ELENA REIGNIER

MARKETING

EXECUTIVE MESSAGE BY

Managing Director

D

ear partners, As a result of our first concrete marketing activities carried out with IMELCO partner suppliers and the work done locally and centrally in this context in the past years, our cooperation now has the means and necessary insight into the local markets to globally support supplier’s business.

The second edition of the Annual Report 2014 / 2015 is one of the examples to be named in this connection.

By the introduction of our new

international marketing activities, we wish to reach a broader audience amongst our wholesale network and put forward the exceptional position of our international partner suppliers and their product offer.

Our new activities are therefore targeted at the consolidation of the global IMELCO network addressing in equal measure associated national wholesalers as well as our selected partners.

In the coming editions of the “Global Circuit” we will be keeping you informed on the further evolution

of the marketing activities IMELCO will be carrying out, but the main purpose of our newsletter will remain to create a place to share information on best practices, recent trends and existing business growth opportunities.

We will be happy to include also your contributions to this exclusive exchange!

SCHEDULE OF THE

UPCOMING ACTIVITIES WITH AND FOR OUR PARTNER SUPPLIERS (2015)

17th & 18th of March: MDs-Suppliers Meetings in Amsterdam will be dedicated to discussion on achievements with partner suppliers in 2014, general expectations and the outlook for potential fields of growth in 2015

April: IMELCO Supplier Award Program / launch of the worldwide web-based query for evaluation of our partner suppliers and their brands (will be carried out with national wholesalers belonging to the member organizations)

4th of June: Networking Event with partner suppliers in Lisbon / Announcement of winners and awards ceremony

July: 2nd issue of the “Global circuit” August: partner suppliers supporting the new marketing activities of IMELCO will receive an individual analysis of how IMELCO wholesalers assess their positioning in the relevant markets 29th & 30th of September: second edition of MDs-Suppliers Meetings (date and venue: to be advised) 9th – 11th of November: A delegation of IMELCO representatives will hold dedicated meetings with GEMCELL and Australian representatives of our partner suppliers in Sydney December: Annual Report of IMELCO 2015 / 2016 including the analysis of situation in member countries & the economic outlook for 2016

November Event in Sydney/Australia – schedule: - 9th of November 2015, in the afternoon

Meeting with the GEMCELL Board and joint dinner (internal)

- 10th of November 2015, whole-day event

Meetings with representatives of partner suppliers doing business with

GEMCELL (local representatives and KAMs from suppliers’ headquarters). In the evening: joint dinner with suppliers

- 11th of November 2015, from 08.00 a.m. to ~04.00 p.m.

Extraordinary General Assembly of IMELCO

GLOBALCIRCUIT 4

BUSINESS The construction market represents the largest business area to the

HOW DO YOU ASSESS THE

SITUATION

associated electrical wholesalers of IMELCO. In the following, our members provide some insights into

OF THE RENOVATION AND RESIDENTIAL CONSTRUCTION MARKETS?

the market situation of their countries.

Oscar Cantaré

Simon Sanfilippo

Jan van der Lof

ELECTROCLUB, ES

ELEX ITALIA, IT

IMAGRO, NL

“In the last seven years, the construction market has decreased by 94% in Spain. In 2006 nearly 800,000 housing units were built (more than in UK, Germany and Italy together), and only 35,000 in 2014. In this context, we expect the renovation market to become a growth driver in the next few years. Banks and real estate companies are focused on trying to upgrade the quality of the second-hand market and this is the key point to explain our expectations.

For the first time since 2007, one out of three most important indicators of the real estate market (price, offer, order situation) has turned positive. Figures show that 376,870 construction jobs were done in 2014, representing a plus of 19.6%. The market actors in Spain are of the same opinion that there is a clear upward trend again.”

“As an effect of the crisis, the construction market is the sector that, in Italy, has had one of the highest decreases in turnover and employment. Fortunately the government has, over the past 3 years, put an incentive plan into action, offering interesting tax reductions to those carrying out renovations, including photovoltaic systems and, in general, electrical systems. Due to the high offer of new unsold constructions, the construction market has however witnessed a decrease (-25% since 2009, yet another -1.5% for 2015) and the market has been kept afloat mainly by renovations.”

Expectation for 2015 in the Netherlands is a flat market again, investments in buildings are on a low level at the moment. In general, there is no much confidence in the market and consequently not in investments, in new buildings and renovation. One reason for the low investment: Dutch banks do not easily grant loans to people who would like to invest (both private and industrial customers). Therefore, this sector does not represent a focus market for IMAGRO members, turnover in industrial market (+2% compared to 2014) is much higher than in the buildings (same level as last year expected, flat market). At the moment there are no special indications that the flat development will change in the next years.”

Renovation and construction market in Italy

“The market is growing but is not yet there where it was before the crisis. Builders are very reluctant to commit to building because they are not sure how the market will perform, not sure about interest rates, have sold land (e. g. to retailers) which they have owned before because house building was in decline.

Therefore less land is available. Another problem is the lack of skilled workforce (plumbers, electricians) because of a low investment in apprentices.

In reality, value of electrical products that goes into new built is pretty small (a few hundred pound per unit, flat, house etc.). If there are 125,000 new built, it is actually not a lot of money spread over all the electrical wholesaling trade, the growth is good but ANEW members are not enthusiastic about it.”

Private housing new built in UK 200K

Governmental target 200K/year

105K

2007

pre-crisis

5

Zsolt Mentes

-25%

ANEW, UK

125K

-47.5% 115K

2013

almost half from pre-crisis

IMELCO.COM

2014

2015

expectation

2015

MENTAVILL, HU+RO+SK 27.90%

-20%

2014

25.40%

Neal Wilcox

2013

24.20%

-15%

2012

19.90%

2011

14.30%

-10%

2010

12.90%

-5%

2009

12.20%

(past and forecast) in %

0%

-30%

Robert P. Smith IMARK, US+CA “Renovation continues to be a large market opportunity for distribution and suppliers. The issue is educating the end user (consumer) and in general wholesale distribution does an inadequate job, unless they have a robust lighting sales department. These wholesalers must keep up to date with the latest in energy efficient products, new lighting and controls technology and related products that can outfit an older home to meet new safety codes and standards. Wholesalers that can attract and can educate both the consumer and the contractors who thrive on upgrades will increase volume, margins and profit. In new construction, the market is on the rise again across the U.S. with mortgage interest rates most favorable and housing starts increasing each year. Housing construction will reach 1.4 million in 2015, an uptick from past years and closer to the average number needed to balance the market (source NAR May 2014). Existing home sales are expected to reach a two year high in 2015, which should increase renovation opportunities.

(Source: Fannie May, National Housing survey Monthly Indicators, August 2014).”

“After 2009, the renovation market decreased every year. But in 2014 the growth achieved between 15 and 20%. The reason was that the government launched a new “homemaker assistance” program. Construction and renovation market shows good business now, because the companies can obtain very cheap loans from the bank. Prices for properties / land are still relatively cheap, compared to the rest of Europe. A lot of middle-sized and big companies will continue investments on building, production lines, new warehouses and factories. For 2015, we forecast a further growth of 10 – 15%.”

Paulina Pilarczyk-Wcislek INTER-ELEKTRO, PL “Poland has adopted the ambitious obligations concerning a relatively high share of Renewable energy sources (RES). Ambitious goals of EU concerning support for technologies based on renewable energy sources introduce this subject into the domestic energy policy. The difficulty of reaching these targets is based on the starting condition. The support system for RES on the electricity market urgently requires stabilization and a clear vision for the future. But still, there is a great amount of new possibilities for making business for all electrical market in Poland. Polish roads over the past few years and road infrastructure are still being improved. Financial help from the new EU budget for 2014-2020 is expected.”

BUSINESS Which products and or technologies you can point out as being the most suitable to serve the requirements of consumers in the context of the current market situation?

Oscar Cantaré ELECTROCLUB, ES “We shall consider the upward trend on the market as an opportunity to give the installation an added value in Spain. Domotics, home automation systems, remote access systems to the energy management, security, LED indoor lighting, connectivity, electrical protection, and many other products shall gain importance. We have to play an active role in this field. Installers are not used to be salesmen. They need our help to be trained and informed about new technologies, new products and new applications. Installers are the key point, but also the value of a wholesaler in the distribution chain has to be re-invented: as wholesalers we have to change our minds. We need to be prepared to sell services instead of just products. We have to change the approach to the market, build new communication channels with our customers (internet could be a good example) and keep our teams updated on the latest innovations in a close cooperation with our suppliers in order to be seen as real partners able to transfer and give value to the market.”

Neal Wilcox ANEW, UK “The biggest impacts on suppliers’ products have changing regulations in the UK. The most recent regulation on distribution boards has already been introduced and everybody has to comply

by January 2016. Plastic enclosures are no longer allowed but only metal enclosures because they are then non-combustible and don’t catch fire. This change offers an opportunity to the market because the price of the metal one is twice the price of the plastic one, could lead to an

increase in turnover and profit. It is not necessarily a change in the market, rather in a product.”

Simon Sanfilippo ELEX ITALIA, IT “The obvious would be to promote the installation of products of higher value such as domotic electrical systems. This would help improve the wholesaler’s turnover, providing the final customer with a more energy efficient home and greater comfort.

For many years suppliers have been asking wholesalers to push sales of domotic products but very few suppliers have carried out marketing plans and invested in promoting such products/systems. On one hand we need to find a joint way, with suppliers to allow the installers to understand the advantages and relative simplicity of domotic installations and, on the other hand, to communicate to the final customer, letting him understand the benefits linked to an integrated domotic system.”

Robert P. Smith IMARK, US+CA “Energy efficient products, controls and lighting products and products that enhance safety – even at the panel board or areas where consumers typically do not think of are important for consumers to be aware of. Our objective for IMARK / IMELCO Suppliers is to raise awareness within our membership of the added support and resources available for our members. As such, IMARK Marketing programs are geared to help educate, market and gain market share for all.”

LED products (compared to traditional lighting solutions), not only for new buildings but they are also exchanging their old technology against LED. As to the industrial market, IMAGRO delivers goods to final the customer but as far as the private residential market is concerned, IMAGRO only delivers to the installers and leaves promotion to installers and suppliers.”

Zsolt Mentes MENTAVILL, HU+RO+SK “In general it can be said that consumers are looking for simple solutions. “Smart homes” is still a small business in Hungary, because of the high prices and low salaries. Only very few people with more money use devices to control functions like heating, shades, lighting in their homes at the moment. It will need more time to reach the majority of people in Hungary.

Furthermore, people do not spend a lot of money on lighting concepts for their house. One lamp in a room can be sufficient. This results from poor living standards and low wages.

However, the switch and socket markets are likely to pick up this year, because they are still needed for new construction.

Paulina Pilarczyk-Wcislek INTER-ELEKTRO, PL “The LED technology is being used as the original method to describe the energy efficiency of interior building and road lighting in Poland. This is the field of the Polish market that should be discovered by the electrical business.”

Jan van der Lof IMAGRO, NL “All products and brands for consumers who wish to build or renovate homes are already made available by current suppliers. The entire portfolio of products which these customers require can be ordered from IMAGRO’s usual suppliers.

Positive: the LED market is still increasing.

People are not afraid to pay more for

Interview carried out by Karen Erasmus (IMELCO HQ) GLOBALCIRCUIT 6

BUSINESS If there is one thing that unites Australians from all different backgrounds, it´s a burning desire to do up their home.

Home ownership has always been more accessible to Aussies than it has to those in many other countries and, as a result, we have developed into probably the most property-obsessed people in the entire world. In fact, we´re so into property we invented a giant tax dodge (i.e. negative gearing) that pretty much obliges anyone with a bit of spare cash to splash out on an investment property.

Be they male or female, gay or straight, Buddhist or Catholic, hipster or bogan, of British, Greek, Indian or Vietnamese origin, the one thing that unites the citizens of Down Under is obsessing about how much their house or apartment is worth and, more importantly, how much more it

RENO MANIA

HITS AUSTRALIA

would be worth if they just fixed it up a bit.

In 2012 – the last year ABS figures are available for – Australians were spending around $500 million a month on home renovations. With the property market having heated up since then, we´re likely spending much more now. As is the case everywhere, the rich and powerful are more likely to have big property portfolios than others – Treasurer Joe Hockey owns four properties and one of his colleagues, Nationals senator Barry O´Sullivan, has 50. But the beautiful thing about Australia is that buying property isn´t restricted to those at the top of the food chain. Pretty much anyone who´s employed – if they don´t mind

Aussie house prices are the highest in the world, in terms of their price to income ratio. Prior to the 1980s, you could buy an average house for three times the average household income, now you’ll need nine times that.

NOW : $ 400,000

BOOM TIMES IMELCO.COM

Source: Electrical Gems, Oct-Nov 2014

FOREIGN FEEDING FRENZY

THEN : $ 150,000

7

a bit of a commute – can get into the property market and, eventually, maybe even achieve some financial security for themselves by purchasing an investment property (or three).

While there are some downsides to Aussies pouring so much time, effort and money into their properties we´re fortunate to live in a country where so many of us can enjoy the pride and security of owning our own home – and the opportunity to make some sweet coin by doing it up and selling it. Aussie tradies are extra lucky to live in a country where renos are a national obsession.

It’s estimated 40 per cent of all newly constructed homes in Sydney and Melbourne are now being bought by nonAustralians. Citizens of China, Hong Kong and Singapore, when not buying inner-city apartments, have a preference for the leafy surrounds of Sydney’s North Shore and Melbourne’s Eastern Suburbs. Malaysian, Taiwanese and South Korean buyers are snapping up townhouses in all east coast cities, South Africans are buying up big in Perth and south-east Queensland is seeing an influx of buyers from the Middle East. By definition, the foreign investors flooding into Australia’s real estate market are cashed up and able to pay tradies big bucks to alter their new residences to better suit their tastes. But the frustrating thing about foreigners is they tend to do things differently. So if that’s a market you want to target you’ll need to adapt accordingly. This might mean biting your tongue despite the customer constantly trying to haggle down the previously agreed price of a job, or grinning and bearing it if they insist on watching you like a hawk for the entire time you’re on their property.

Source: Electrical Gems, Oct-Nov 2014

BUSINESS TAILOR-MADE SOLUTIONS BOTH FOR

RENOVATION

AND NEW CONSTRUCTION PROJECTS its growth plans globally, however, the US offers a significantly higher opportunity for growth. The Thomas & Betts portfolio is strong here and ABB is making investments to continue on 2014’s success in this market, where we grew significantly across ABB and Thomas & Betts.

US Dollar Growth 2014-15 (percent)

US Dollar CAGR* 2013-2018 (percent)

US Dollar CAGR* 2013-23 (percent)

Which country within the IMELCO geography do you assess as having the strongest potential to grow business in 2015 and beyond?

ABB is keen to support IMELCO with

The Smart Home solutions involve two areas: modernization and new construction. Which aspects do you believe to be decisive for sustainable success in home automation?

ABB’s portfolio comprises tailor-made solutions both for renovation and new construction projects. In the area of US Dollar Growth 2013-14 (percent)

Do you see the renovation and new construction markets as the areas of business promising the most growth? Do you perceive this as a global trend?

The renovation and construction markets represent one of the most significant growth for ABB’s business with its distributors and wholesaler customers. There are significant local variations, but we see this as a global trend.

As for the renovation market, which products would you highlight as being available in all IMELCO markets and able to serve the needs of our customers and consumers?

The majority of ABB’s portfolio is available to IMELCO and its customers.

We pride ourselves in having a local business, which is globally managed.

We have a complete offering for residential and commercial buildings and have invested in software and new products for this market. Overall, we try to offer class-leading products that are easy to install. ABB’s reliability and ease of fitment can support IMELCO’s customers. The Smart Home solutions

Market Size 201-43 (Billions of 2010 US$)

We are exploring the views our partner suppliers have about the current and future construction market.

Vincent Hurel, ABB Group Vice President for the global distribution channel for the Low Voltage Products division, underlines the challenges and opportunities for electrical wholesalers.

are good examples.

How do you help addressing our final customers to raise awareness of your recent innovations?

We are investing more and more in demand creation, whether that is through increasing the number of sales people and specifiers; investing in the quality of our digital communications content; or in brand promotion at industry events, through trade advertising and media relations. We recognize that we need to continue to invest in building awareness about ABB’s technology and brand strengths to support partners such as IMELCO.

Total Residential Infrastructure Transportation Public Health Energy

8,492 3,177 2,735 1,283 193 1,260

3.6 3.0 4.4 4.5 1.6 4.7

3.6 4.5 3.6 7.1 5.7 -0.3

4.1 3.7 4.5 5.1 3.7 3.9

3.9 3.6 4.6 4.8 3.6 4.5

Nonresidential Structures

2,579

3.5

4.3

4.1

3.7

Office Commercial Institutional Industrial Chemicals Food Processing Utilities Electrical and Electronic Products Petroleum Refining Communications Transportation Equipment Other

402 575 483 1,119 154 123 105 99 74 62 100 403

4.8 3.9 0.6 4.0 8.4 4.0 2.5 1.9 3.3 1.1 4.0 3.9

6.0 5.0 4.8 3.1 6.8 5.3 -6.1 3.9 -7.4 2.3 5.1 4.9

5.0 4.2 3.6 4.1 5.2 4.8 2.8 2.9 2.2 1.9 4.0 4.7

4.1 3.6 3.7 3.6 4.1 4.5 2.9 2.7 3.0 1.7 2.9 4.0

Global construction Segment detail (data provided by ABB)

* Compound average annual growth rata (source: IHS)

GLOBALCIRCUIT 8

BUSINESS home automation, we focus on three main benefits for people in their own homes: comfort, safety and efficiency.

We have developed integrated, scalable solutions that can work together simply – whether that is the control of lighting, shutters & blinds, temperature control or security, such as access control and presence detection.

We also focus on delivering energy efficiency benefits to support people to reduce their personal energy costs.

9

IMELCO.COM

Total Construction Residential Nonresidential Infrastructure Transportation Public Health Energy Structures Office Commercial Institutional Industrial

Utilities Communications Petroleum Refining Transportation Equipment Chemicals

2013

2015

bn US$, as of December 2014 (data provided by ABB, source: IHS)

Annual Growth, Five-year CAGR, percent percent

2023

What products do you actually offer for realizing this building concept and how are these solutions going to be developed technically during the next few years?

ABB offers a comprehensive portfolio, from the industry standard of KNX to our own innovation, ABB free@home. We are constantly innovating to ensure that we can make smart homes a reality for as many households as possible. At trade events last year, we took the opportunity

Construction outlook for United States

2014

The future sustainability of the various different technologies repeatedly plays an important role in discussions on the Smart Home. How would you assess this aspect?

The concept of the smart home – integrated into intelligent or smart grids – will only become a commercial reality on a broad scale if we can have open network concepts on agreed standards.

We need to have open protocol solutions that can integrate to infrastructure that exists already and that can be scaled for future growth.

to demonstrate how voice control can be integrated within a smart home. There are several factors that are important with this technology development. The interface with consumers which needs to be integrated within existing devices, such as smart phones or tablets; the software protocols, which we believe should be open to support as many consumers to get access to these innovations; and the actuation of all the devices in the home, which must be done reliably and securely in a way that enhances comfort and lifestyle. This is a fast moving and exciting space and ABB is proud to be at the heart of innovation here.

2018

What significance do you think the efficiency aspect will have in the future?

There are many drivers for energy efficiency. A major change will be in the area of how the grid is managed. Whether that is in how we use loads in private households through home automation, or how we store energy and push it back to the grid, in the case of solar power and micro grid solutions. We will continue

to see an increasing proportion of renewable energy in our power mix and future generations will put ever increasing demand on what ABB describes as “running the world without consuming the earth.”

2013

What will have to be done to ensure that networked home and building technology is also developed faster throughout the private sector?

To ensure that networked home and building technology is available faster, we have developed solutions from the high end to more affordable solutions.

We are also looking at partnerships with other organizations to drive innovation and speed to market for smart home solutions. Additionally, we are looking at wireless solutions to make retrofitting these solutions a viable option. We want to make it possible for everyone to have a smarter, more efficient and more comfortable home.

5.8 5.4 6.2 -3.2 7 20.4 4.5 9.0 -0.9 9.1 -1.3 5.9 4.6 -4.4 5.7 0.1 6.9 -1.9 0.4 3.7 1.8 3.5 1.1 0.8 2.3 -1.2 -0.2 9.8 -3.7 5.5 -2.9 19.4 -14.3 2.7 5.5 -2.2 5.3 8.7 -6.8 6.9 8.7 21.9 15.8 -11.7 11.5 16.4 13.7 13.4 -12.6 7.6 -7.7 -1.6 9.7 -5.3 5.9 -5.5 6.1 1.6 -2.4 6.7 -17.6 2.9 -9.8 1.4 5.2 7.0 -5.6 2.2 -8.3 0.2 -20.3 45.7 15.4 -24.0 18.1 30.4 -17.3 10.5 1.8 1.4 39.6 56.2 12 3.2 9.5

3.1 2.9 3.3 3.2 3.7 4.0 1.5 3.3 -4.5 0.6 5.9 3.2 1.8 -0.4 5.0 -0.7 -1.3

BUSINESS

MITEGRO In January 2014, e-masters, the subsidiary company of the IMELCO member MITEGRO (Germany, Austria and Luxembourg), started the marketing campaign "intelligent modernization and installation“. The target of this activity is to point out to the end customers, which innovations presently exist in the context of safety, home automation and age-appropriate comfort products as well as the possible energy and cost savings related hereto. At the same time, the campaign reminds the installers of the opportunities opening up to do some extra business.

Residential market in Germany (in â‚Ź bn)

100 90 80

n vatio Reno

70 60 50 40

New constru c

tion

1992 1995 1998 2001 2004 2007 2010 2013 2016 Source: baulinks.de DIW-Institut und Heinze-Prognose

The electrical installers, members of e-masters, have now stronger sales arguments at hand when defining their job volumes with end customers for new construction or renovation projects.

This means that the selling efforts of a professional electrician are backed up by the adequate marketing measures like flyers, advertisements, information panels for construction sites, large banners or billboards, just to name a few of many.

A separate website was set up which describes to the end user the opportunities of the innovative electrical installation, the latest directives and regulations connected hereto and shows the list of all partners who support the campaign. Those are leading manufacturers from the electrical industry (presently, 31 suppliers).

The manufacturers do not only subsidize the campaign but also deliver fully functional product displays which are used in the display areas of MITEGRO wholesalers or by their customers. Two

TEAMS UP WITH INSTALLERS TO INCREASE MODERN INSTALLATIONS

presentation trucks equipped with the innovative technique of partner suppliers are used either by the members of e-masters in Germany, Austria, Czech Republic and Luxembourg or by the wholesalers of MITEGRO for their in-house trade fairs. e-masters is the leading marketing cooperation providing services for more than 2,100 members, electrical installers. As the core competence of an electrician shall remain the secure and high-qualitative installation of the electrical equipment, it is the task of e-masters to assist electrical installers who are not firm in marketing and/or do not have the manpower to carry out necessary marketing measures.

For a monthly fee of EUR 49.50 (and a one-time admission fee of EUR 300 which is paid back to an installer if leaving the cooperation) members can benefit from a marketing package comprising 150 different services like: Business Management support in legal issues and financial matters, insurances, management consultancy, software & telecommunication, operational safety, meetings between members for exchange of best practices and know-how Human Resources diverse seminars (administration, technologies, controlling etc.), user trainings for Word, Excel, PowerPoint, seminars and award programs for apprentices

e-masters Managing Directors Jens Gorr (left) and Konrad Ramhorst (right)

Investment and Procurement working clothes, operating resources and facilities, trade journals, special conditions for car and truck fleet (e.g. 40% rebate when buying a new car), car service, car equipment, personnel service providers, special conditions with gas and energy supply companies, better conditions for the online hotel booking Marketing and Advertisement corporate design, outdoor advertising, vehicle signage, products‘ displays, business stationary, end customer advertising, rental of presentation trucks, digital media (e.g. creation of web sites, search engine marketing and advertising, company image film service) Today, e-masters employ 20 people at the HQ in Hanover (Germany), further 35 specialists are full-time field workers dedicated to the work of e-masters with installers but employed by the local wholesalers. The aim of this unique concept is to reinforce the three-tier distribution model and to keep the customers of MITEGRO wholesalers healthy, sustainable and loyal.

Source: e-masters

GLOBALCIRCUIT 10

OPPORTUNITIES

SPESA ELETTRICA THE DYNAMIC DEVELOPMENT OF THE E-COMMERCE SITE

IS GROWING IN ITALY

The electrical wholesale industry attaches great importance at the subject of the e-commerce. In this issue, we dedicate three articles to the recent experiences of our members.

In November 2014, Spesa Elettrica made its online debut. Initially, Spesa Elettrica kept a low profile so as to avoid excessive pressure on a newborn site and so as to use the first 2 months to test the IT platform and to make sure that all the logistics work as planned.

In the meantime the site has also been enriched with contents and the product range has widened to include most of the product a present within the wholesalers stocks.

The number of brands involved has risen sharply. At first there were less than a dozen, while today there are over 25, and growing. Among them we find Bticino, Bocchiotti, Elvox, Fanton, Gewiss, Inset, Legrand, Lombardo, Schneider, Vimar, Osram, Beghelli, Theben, Hager, Fosnova, Prisma, Disano, Vemer, Intercable and Easyteq.

Thanks to its dynamic development, Spesa Elettrica is now mature enough to deal with a web marketing campaign. The main goal is the optimization of the site’s ranking on search engines such as Google.

Starting February 2015, the web marketing campaign is active and it will further increase the popularity of the site. Step by step the e-commerce site is continuing its growth.

So as to give a quick outline of this online project and how it was developed, we have to go back in time to a year 11

IMELCO.COM

and a half ago, when another Elex Italia initiative called “Marketplace obsoleti” was launched. The goal of this project is that of reducing the obsolete products in stock.

When placing an order to a supplier, each Elex member’s IT system first checks to see whether each single article is listed as obsolete within another member’s warehouse. If so, the product is taken out of the order to be sent to the supplier and it is Elex who then takes charge of all necessary actions so as to transfer the material from one member to the other.

The availability of data and the logistics behind the “Marketplace obsolete” is what has allowed Elex to move a step further and go on-line.

In fact, any order placed by an on-line customer is dealt with by transferring the order to a member company and once the material is ready, Elex arranges for an express courier to pick up the parcel and deliver it to the final address.

So as not to create any conflicts with the member’s everyday customers, a separate company named Spesa Elettrica was founded. Another important aspect is that, transferring orders to the wholesalers safeguards the distribution channel also making sure that the on-line prices are not lower than the normal wholesaler to installer prices.

Other important aspects are the direct link to the member’s IT systems to ensure correct availability of products and a

complicated algorithm that assigns the orders to the members giving priority to the availability of products in stock and also makes sure that orders are divided amongst members in proportion to their purchases from Elex partner suppliers.

The on-line customer has no idea of what goes on behind the scenes and his one and only interface is Spesa Elettrica. Even the package the customer receives does not show the member’s name as the delivery note is issued directly by Spesa Elettrica.

At the moment, over 15,000 articles are on display and 100,000 shall be reached within the next 6 months, involving all suppliers.

Spesa Elettrica targets customers who do not purchase from wholesalers and payment, as is the case of most on-line shops, has to be made in advance (paypal, credit card or bank draft). In this early stage, for fiscal and logistics reasons, sales are restricted to the Italian market.

This is the first B2C electrical on-line shop developed by one of the major players on the Italian market. Other individual wholesalers have already gone on line but with B2B sites, solely targeted to professional customers.

Source: Elex Italia, Simon Sanfilippo

www.spesaelettrica.it

OPPORTUNITIES

OPENING MARKETS ONLINE AT OMNICAL An interview with Allard Schipper, co-founder of this Dutch electrical supply e-commerce website.

What does your company Omnical do?

We provide our customers with access to over 1 million different electrical products from nearly 200 well known manufacturers on www.omnical.nl. We have publicly available pricing and availability as well and sell directly online. We rely on Imagro Group members (representing IMELCO in the Netherlands) for fulfillment. Their ongoing efforts in developing a robust product database are making it possible for us to have a uniquely broad and online accessible offering. We differentiate ourselves from other large online retailers because of our knowledge of electrical supplies and our roots in the electrical wholesale.

Who is buying from Omnical?

In late 2013, we launched our website in the Dutch language and with Dutchonly payment methods. Although we have traction in the Dutch market, most of our business has been coming from outside of the Netherlands. Our customer backgrounds vary widely, ranging from a one-person business in Croatia buying lighting fixtures to a large oil plant in Malaysia buying sensors. What our customers have in common is that they come to us because we carry the exact product they are looking for. Because of the international demand, we are launching an English website shortly with payment methods that are more suited for an international audience.

Do you find yourself competing with IMELCO wholesalers?

The market is large and the chances of

IMARK

us actually competing for a customer are slim. What we do is incremental to the group’s revenue. We nearly exclusively buy from the Imagro Group.

What issues have you ran into while growing your business?

Almost immediately, we had to adjust to make sure we could serve our international customers well. We find that many of our customers prefer the e-mail cycle of Quote, PO and Invoice to an e-commerce transaction. We are experimenting with ways to make that process more efficient for our customers and us with self-serve quoting options.

We are also working on better pricing for certain regions. IMELCO members will likely play an important role in that.

www.omnical.nl

DEVELOPS ‘ROAD MAP’ FOR MEMBERS' WEBSITE STOREFRONT

In the United States, many IMARK members are in the process of responding to new demands from customers and prospects that want to do business in different ways.

Some have already developed “best in market” webstores which allow their customers to place orders, check inventory, view order statuses and many other functions which, for many years, have been handled by either phone or email.

On the other hand, some IMARK members are just getting started and are just thinking about webstores. Others may not move forward simply because they don’t know where to begin.

The purpose of the IMARK ROAD MAP is to help interested members be aware of the issues that they will encounter during the preparation, development and implementation of a B2B webstore that is right for customers, prospects and employees.

Some examples of sections included in the ‘Road Map’ are the following ■ How can your webstore make your customers more productive (and loyal)?

■ Things to consider before getting started ■ Building a webstore for your customers ■ Key elements of a webstore ■ Launching your webstore

If you are interested in obtaining a copy of the IMARK ‘road map’ to a ‘best in market’ website storefront, please contact Steve Ruane of IMARK Group (sruane@imarkgroup.com) GLOBALCIRCUIT 12

NETWORKING

FLYING THE For just shy of a quarter of a century, Gemcell has been helping little Aussie battlers compete with massive multinationals.

There are a lot of advantages to being an independent Aussieowned business: you run your business the way you believe best suits local conditions; you create jobs – directly and indirectly – in your local community; you can do things like provide a line of credit to your valued customers without having to worry about violating a company policy you had not role in creating; and you can even sponsor your local footy team.

But even the largest independent Aussie businesses are small fry compared to the multinationals that dominate so many Australian industries. And that means a locally owned business acting completely independent doesn´t have the purchasing power to

John O´Neill, Gemcell’s Chairman 1995-2004, Managing Director Mekolec & Co., member of the IMELCO Supervisory Board 13 IMELCO.COM

get the best deals by buying in bulk and passing those savings on to their customers. This means there´s a long and depressing history of proudly independent, Aussie-owned businesses being priced out of the market by huge, foreign-owned corporations in a position to, firstly, buy stuff cheap and secondly, sell at a loss (or minimal profit) until they´ve driven their competitors to the wall.

The point of this little economics lesson is to highlight the genius of what a group of independent electrical wholesalers, initially in NSW and then nationwide, decided to do from 1991 onwards.

While keeping control of all other aspects of their businesses, they agreed to join forces and form a buying group - Gemcell – to ensure they could compete on price with the three powerful multinationals operating in Australia. End result? A whole lot of Aussie-owned business that might have otherwise had a far less rosy fate are thriving, creating employment and sponsoring sports teams, while their customers enjoy the benefits of a competitive market, meaning reasonable prices and good service.

“... To understand the role Gemcell plays you need to understand this is an industry dominated by three huge multinationals, two French and one American. Gemcell keeps them honest and adds some balance. Generally speaking, independent operators try harder. They open longer hours and do the extra mile to service their customers. But independents wouldn´t survive if they couldn´t compete on price and that´s what combining to form Gemcell has allowed them to do.

I first became involved in Gemcell as a member in the early 1990s when the organization grew from being just some independent Sydney wholesaler to going nationwide. The hardest years for Gemcell were the early ones when it was being established; I was fortunate enough to be chairman when there was a lot of organic growth occurring, both in terms of new businesses joining and existing members opening lots of new outlets. It has grown exponentially since then as well. I believe it now has around 30 members that 246 branches and turn over $1.2 billion

annually, which means Gemcell has probably quadrupled in size since I was chairman.

Maybe I´m sentimental but I´m not embarrassed to fly the flag for Australian business. We need to create jobs in this country and we need to encourage people to grow their businesses in order to have a strong economy. I´m not saying local business deserves any special advantages but if they´re delivering great service and competitive prices, as I believe those in the Gemcell network so, why wouldn´t Australian tradesmen choose to buy from them?...”

And at a time when there´s concern about how many of our industries are dominated by foreign-owned corporations, it´s definitely worth celebrating – and supporting – an organization that´s dedicated to making sure Aussies continue to play a big role in the Australian electrical wholesaling industry. “ Source: Electrical Gems, Dec 2014 – Jan 2015

NETWORKING

ELEX ITALIA CONVENTION

THE

TITLED “EXPANDING BOUNDARIES”, HELD ON JANUARY 22, 2015 IN MILAN.

With over 170 people in attendance, the annual meeting reached its record of participants.

Spesa Elettrica. After the presentation of the state of the art, stress was placed on the importance of the cooperation of business partners in providing structured product data. It is for this reason that three

partner suppliers (Bocchiotti, Gewiss and Lombardo) were awarded a plaque for their proven cooperation.

Source: Elex Italia, Martina Bignami

Various relevant topics were touched upon in the first part of the event.

In addition to market trends, the presentation highlighted some of the projects carried out by the consortium in recent years; the management of obsolete products and the growth of the private label “Easyteq” are just a few examples.

The meeting was enriched by the host speech of Giorgio Merli who is a mechanical engineer with a vast experience in the field of constant innovation. During his career he has had the opportunity of working for wellknown companies such as IBM Italy and NASA. The second part of the event was fully dedicated to Elex Italia’s new and ambitious project: the e-commerce site,

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We are looking forward to meeting our associated electrical wholesalers running their own family businesses in 23 countries worldwide.

The 9th IMELCO Convention that will be carried out under the motto “Stay on the move!” will provide once again a platform for an intensive exchange and networking with our partners. In this connection, more than 500 “save the date” notices were sent out at the beginning of this year, and we will be happy to see as many participants as possible to celebrate this special occasion with us.

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On the 1st and 2nd of September 2016, IMELCO will celebrate its 25th anniversary in PARIS.

NETWORKING

BEM-VINDO A PORTUGAL!

WHICH IS TO SAY

“WELCOME TO PORTUGAL!”

We are looking forward to networking with the representatives of ARMASUL at the 60th General Convention of EUEW in Lisbon (PT) As already announced in September 2014, the Spanish purchasing group Electroclub has expanded to the whole Iberian territory by incorporating the Portuguese wholesaler ARMASUL into ELECTROCLUB. As a result of this development, ELECTROCLUB and IMELCO will benefit from direct access to the Portuguese market.

Today ARMASUL is one of the largest distributors of electrical material in Portugal, specializing in lighting, cable and installation equipment for both civil and industrial purposes. It serves the entire national territory from its modern logistics center of 5,200 square meters located in Corroios, Portugal, (south of Lisbon). The material is also exported to various countries including former Portuguese colonies. Business founder Mr. Humberto Costa has always regarded the service provided to customers as the company’s main asset. ARMASUL’s commitment to quality is the central basis of its corporate strategy and business culture. Over 90 employees represent a committed and dedicated driving force. They are constantly involved and form an integral part of the company’s success. ARMASUL stands for speed, efficiency and competitiveness.

Three platforms that make a distinction and require that it can count on the active participation of its partners, companies and brands that trust and rely on this organization to be their preferred partner for electrical products.

ARMASUL's owners: Bruno Costa (left) and Humberto Costa (right)

ARMASUL’s CEO Mr. Bruno Costa summarizes: “We are a company with a solid foundation and financial solvency, very competitive, with excellent human resources, which strives for excellence. The new cooperation with ELECTROCLUB and IMELCO fits in perfectly with this objective and enables us to provide our customers and partners with augmented service quality”.

Source: Electroclub, Oscar Cantaré Nueno

To register for the 60th General Convention of EUEW, please proceed to the site: www.euewconvention.eu

SCHEDULE OF

EVENTS IN LISBON

IN JUNE

- 2nd of June 2015

For the first time in our history, we will carry out a worldwide analysis of positioning of our partner suppliers and their brands in individual IMELCO markets.

- 3rd of June 2015

Associated local wholesalers from majority of IMELCO countries will give us their feed-back on how they assess the national sales organisations of suppliers in such categories as “commercial policy”, “marketing support”, “sales force effectiveness”, “delivery and logistics” and “loyalty to wholesalers”.

Arrival of IMELCO representatives and joint dinner (internal)

Ordinary General Assembly of IMELCO

- 4th of June 2015

Networking Event with partner suppliers Get-together organized by EUEW

- 5th of June 2015

60th General Convention of EUEW

15 IMELCO.COM

The results of this web-based poll will be announced at the Networking Event in June, where the award ceremony will take place. On the same occasion, we will all have the opportunity to network and discuss business with representatives of all IMELCO member organizations.

Global Circuit would love to picture your organisation in the next issue. Please contact us, if you are interested: Mrs. Elena Reignier | Tel: +49 511 615 99 14 | e-mail: elena.reignier@imelco.com

GLOBALCIRCUIT 16