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August 2020 http://attardimarketing.com/

http://energywatchnews.com/

The greatest leader is not necessarily the one who does the greatest things. He is the one that gets

people to do the greatest things. Ronald Reagan, 40th President

The best executive is the one who has sense enough to pick good men to do what he wants done, and

self-restraint to keep from meddling with them while they do it. Theodore Roosevelt, 26th U.S.

President

If your actions inspire others to dream more, learn more, do more and become more, you are a

leader. John Quincy Adams, 6th U.S. President

Something to Think About…

Distributors Must Lead to the New Normal by Mark Dancer, NAW Fellow and founder of the

Network for Business Innovation – It’s easy to accept that the COVID-19 pandemic will result in a shift to customers embracing e-commerce, employees working at home and stronger distributors getting stronger. These predictions feel “right” now because they fit preconceived notions. They are outcomes long-predicted by experts and now enabled by the crisis. Following early predictions about the new normal may or may not be a formula for failure, but following them is certainly a missed opportunity to lead.

So far, surviving the crisis is about taking quick action around preserving cash, managing liquidity and

protecting customer relationships. Leading to the new future requires challenging assumptions, looking

for subtle insights and sharing a compelling vision.

The most impactful outcome from social distancing may be about online ordering. It could equally be

about augmented reality tools for collaborative problem-solving. Working at home gives flexibility to

employees and diminishes the need for office space. However, that can come at the expense of

unplanned human interactions that are essential for creative problem-solving. Strong distributors may

ultimately become stronger. Nevertheless, entrepreneurial leaders may come up with game-changing

solutions that weaken incumbents.

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Over the last few weeks, I have listened to and participated in many discussions about responding to the

crisis and innovating the new normal. I’ve distilled three initial ideas for challenging the emerging

conventional wisdom. I offer them to help kick-start new mindsets, creative leadership and thoughtful

planning:

• From working at home to working among partners. The new normal isn’t that employees can

work at home, but that they can work in places other than the distributor’s office. Working with

others in the same physical space builds opportunistic problem-solving, relationships and culture.

The new normal may be about asking customers if a distributor’s employees can borrow a desk and

work onsite. Or inviting customers to do the same at the distributor’s location. This potential new

normal can be about colocating with partners (customers, suppliers, key vendors and more) as ways

of building personal connections and “being there” when a new idea or need emerges.

• Don’t distribute products; assemble goods. In an earlier Distributing Ideas blog post, I explored

whether it was time to rename and rebrand distribution. The new normal that emerges from this

Coronavirus crisis may be that the value of a distributor is not to stock products and distribute them

when ordered. Instead, the role of the distributor may be to help customers when help is needed —

during crises and also during digital transformations, labor shortages, market disruptions, facility

expansions and on and on. In this new normal, distributors may play a leadership role by

“assembling” products, ideas, experiences, vendors and more to create “goods” in the economic

sense — positive outcomes achieved by overcoming the scarcity of solutions.

• From products sourced afar to value created locally. There is an emerging narrative that global

supply chains will transform as businesses decouple from distant sources offering low-cost labor.

This change may happen, but its story does not explicitly position distributors as an essential partner

for a new normal. Distributors must tell their own stories, starting with a radical mind shift —

something like “distance kills, intimacy thrills.” Customer value is optimized by partners that stand

beside customers where they work and live, in local markets and communities. Distant sourcing is a

singular pursuit of low-cost labor yields, inflexible sourcing and fragile profits. “Localness” creates

shared experiences that enable predictive risk and rapid mitigation solutions, as discussed in this

recent Distributing Ideas post. https://www.naw.org/author/m-dancer/

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National LED EnergyWatch…

1. DLC New Technical Requirements for Networked Lighting Controls - The DesignLights

Consortium (DLC) released a new version of its technical requirements for networked lighting

controls, aiming to encourage wider market adoption of this energy saving and smart building-

enabling technology by focusing on issues that are key to increasing customer confidence.

Networked Lighting Control System Technical Requirements 5 (NLC5) strengthens requirements for

listing systems on the DLC’s NLC Qualified Products List (QPL) as part of a multi-year plan for

continually advancing requirements related to the cybersecurity, interoperability and energy

monitoring aspects of NLCs. The QPL supports energy efficiency incentive programs for

commercial and industrial (C & I) electric utility customers across the US and Canada. The new

technical requirements will be discussed in detail during the DLC’s July 2 webinar.

https://www.designlights.org/workplan/networked-lighting-controls-v5-nlc5-requirements/

2. New DOE Study Examines Lumen and Chromaticity Maintenance of LED Packages, Based on

LM-80 Data - To better inform our understanding of LED reliability over the course of a product’s

lifetime, DOE has released the results of a study assessing the four major phosphor-converted LED

(pc-LED) package types: ceramic-based, polymer-based, chip-on-board (COB) packages, and chip-

scale packages (CSP).LED packages rarely fail abruptly (i.e., suddenly stop emitting light). In most

cases, they experience parametric failures, such as degradation or shifts in either color or light output

(e.g., luminous flux). In some applications, chromaticity stability—that is, the degree to which the

light output maintains its color—is just as important as the light output itself. To better understand

chromaticity stability in LEDs, the DOE study evaluated four pc-LED package platforms for

luminous flux and chromaticity maintenance, analyzing data sets from LM-80 testing of

representative products from many Tier 1 LED manufacturers. https://www.energy.gov/eere/ssl/articles/new-

study-examines-lumen-and-chromaticity-maintenance-led-packages-based-lm-80

3. EW's 2020 Top 200 Ranking - The nation’s largest electrical distributors are navigating through the

economic storm touched off by the COVID-19 coronavirus. Accounting for an estimated $81.4

billion in sales — 69% of Electrical Wholesaling’s $117.5 billion in estimated 2019 total sales

through distributors of electrical supplies — the 2020 Top 200 electrical distributors possess an

enormous amount of clout.

THE FIVE LARGEST FULL-LINE ELECTRICAL DISTRIBUTORS IN NORTH AMERICA

Company Town/City: 2019 Revenues Employees Branches

Sonepar NA Paris, France 11,409,880,000 48,000* 987

WESCO Pittsburgh, PA 8,358,917,000 9,500 500

Graybar St. Louis, MO 7,525,000,000 9,030 289

CED Irving, TX NA NA 700

Rexel Holdings Dallas, TX 5,854,531,560 8,500 550

In 2019, the five largest full-line distributors in North America had an estimated $39.1 billion

in combined revenue and operated an estimated 3,026 branches in North America. According

to Electrical Wholesaling’s sales data, these five companies account for no less 33% of an

estimated $117.5 billion-plus in 2018 electrical sales in the United States and Canada.

*Worldwide https://www.ewweb.com/data-training/top-200/whitepaper/21135681/ews-2020-top-200-ranking

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4. Scientists Say UV-C Light Robots Are ‘Effective’ Tool Against Virus - A real-world trial of an

ultraviolet lighting robot has shown that it can provide an

effective extra layer of protection against the coronavirus, say

scientists. Researchers from the Massachusetts Institute of

Technology tested an autonomous UV-C system’s success in

disinfecting a food bank in Boston. The approach uses a custom

UV-C light fixture designed at the university’s Computer Science

and Artificial Intelligence Laboratory (CSAIL), that integrated

with a mobile robot base from Ava Robotics. The results were

encouraging enough that the academics say that the approach

could be useful for autonomous UV disinfection in other

environments, such as factories, restaurants, and supermarkets. https://www.luxreview.com/2020/07/08/scientists-say-uv-c-light-

robots-are-effective-tool-against-virus/

5. Boost for Lighting Industry as Experts Say Virus Is Airborne by Ray Molony - The ambitions of

the lighting industry to be a major supplier of UV-C products was given a boost today as 239

scientists declared that airborne transmission of the coronavirus is much more significant than

previously thought. In an open letter to the W.H.O., the researchers from 32 countries outlined the

evidence showing that smaller particles can infect people, and are calling for the agency to change

its recommendations from an emphasis on hand washing. The scientists – who plan to publish the

letter in a scientific journal next week – suggest that emphasis should move from surfaces to indoor

air as the significant medium of transmission. A shift in emphasis from surfaces to air will be

welcomed by the lighting industry. https://www.luxreview.com/2020/07/07/boost-for-lighting-

industry-as-experts-say-virus-is-airborne/

6. Retrofitting with LED Lighting by Emerson - Emerson explains why converting from traditional

lighting sources to LED in industrial facilities improves safety, productivity, and long-term financial

performance. When facilities are considering converting from traditional lighting sources to LEDs,

getting buy-in from management before beginning the retrofit is a key step to assuring a successful

project. With today’s LED solutions offering some of the most energy efficient and reliable lighting

technologies available, making a compelling retrofit case with your manager should be a simple

process, once you have the facts. Here are nine questions to ask when retrofitting with LED lighting:

https://facilityexecutive.com/2020/06/retrofitting-with-led-lighting/

7. PGE Program Will Transform Hundreds of Homes Into a Virtual Power Plant - Portland

General Electric Company (NYSE: POR) is set to launch a pilot program that will incentivize

installation and connection of 525 residential energy storage batteries that PGE will dispatch,

contributing up to four megawatts of energy to PGE's grid. The distributed assets will create a

virtual power plant made up of small units that can be operated individually or combined to

serve the grid, adding flexibility that supports PGE's transition to a clean energy future. PGE

will operate and test the benefits of using homes' batteries, each capable of storing 12 to 16

kWh of energy, to optimize the use of renewable energy, such as wind and solar, and grid

capabilities. In the event of a power outage, participating customers can rely on them as a

backup power resource. https://energycentral.com/

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8. The Power of Light by Sonia Fernandez - Ultraviolet LEDs prove effective in eliminating

coronavirus from surfaces and, potentially, air and water. As COVID-19 continues to ravage global

populations, the world is singularly focused on finding ways to battle the novel coronavirus. That

includes UC Santa Barbara’s Solid State Lighting & Energy Electronics Center (SSLEEC) and

member companies. Researchers there are developing ultraviolet LEDs that have the ability to

decontaminate surfaces — and potentially air and water — that have come in contact with the

SARS-CoV-2 virus. Indeed, much attention of late has turned to the power of ultraviolet light to

inactivate the novel coronavirus. As a technology, ultraviolet light disinfection has been around for a

while. And while practical, large-scale efficacy against the spread of SARS-CoV-2 has yet to be

shown, UV light shows a lot of promise. https://www.news.ucsb.edu/2020/019860/power-light

9. LED Lighting Upgrade Will Save Manufacturer $150K Per Year - The retrofit will improve light

levels at WernerCo’s 500,000-square-foot facility and lower the Midwest location’s lighting bill by

60%. An interior LED lighting upgrade at one of WernerCo’s Illinois-based, jobsite equipment

manufacturing facilities has lowered the international manufacturer’s power usage, resulting in an

estimated annual savings of $156,000. The project was completed by Fairbanks Energy Services, a

full-service design/build energy efficiency firm and developer of comprehensive commercial and

industrial (C&I) projects. Fairbanks Energy Services designed the LED lighting upgrade to deliver three primary results for Werner:

• Improve sustainability, one of Werner’s core corporate values • Reduce energy use and solve light level issues to improve safety onsite • Lower annual operational expenditure on energy for highly productive, 24/7 facility

https://facilityexecutive.com/2020/07/led-lighting-upgrade-will-save-manufacturer-150k-per-year/

10. University of Washington Retrofits Dempsey Center with High-Bay LEDs - Cree Lighting has

released details of an LED retrofit project on the University of Washington campus in the Dempsey

Indoor Center. The solid-state lighting (SSL) project saw the athletic department increase light levels

and decrease energy usage in the facility used both for practice and actual competition. Moreover,

the LED upgrade will eliminate twice-annual maintenance cycles and expenses. In the University of

Washington project, Cree Lighting supplied its HXB high-bay luminaires. That product won a 2017

LEDs Magazine Sapphire Award in the Industrial SSL Luminaire Design category. The product was

designed for one-for-one replacement of high-intensity discharge (HID) fixtures.

https://www.ledsmagazine.com/

11. Feature Analysis and Comparison between LCD, OLED, Mini LED and Micro LED Displays - A

research team led by Shin-Tson Wu, Professor from the College of Optics and Photonics, University

of Central Florida, USA, conducted a comprehensive analysis on the current display technologies:

LCD, OLED, Mini LED and Micro LED. The researchers analyze the performance of self-emitting

Mini LED, Micro LED and OLED display, as well as Mini LED backlit LCD, evaluating the power

consumption and ambient contrast ratio of each display in depth and systematically compared the

dynamic range, motion picture response time, color gamut, and adaptability to flexible and

transparent displays. This team indicated that each display technology has its strengths and

challenges. These researchers aim to understand the fundamental limits and develop new approaches

for each technology to overcome its obstacles. They have also been devoting to discovering new

materials and devices. https://www.ledinside.com/news/2020/7/display_technology_comparison

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12. PNNL Seeks Feedback on IoT-Upgradeable Lighting, Considers SSL Luminaire Challenge - The

US Department of Energy (DOE) and its Pacific Northwest National Laboratory (PNNL) have

issued a request for feedback for potential guidance on future-proof, LED-based luminaire design

that yields products that are cost competitive with luminaires that have no easy upgrade path to

connectivity. The DOE is seeking to spur the industry toward a connected lighting future and PNNL

is using the feedback-gathering exercise to guide a possible luminaire design challenge. The solid-

state lighting (SSL) initiative would require that installed luminaires be easily upgradeable using

industry-standard modules from below. For now, PNNL is seeking input on the program concept.

Comments and feedback are due by August 10 and can be sent to lightingchallenge@pnnl.gov.

PNNL will also hold a webinar for discussion of the program on July 30. https://www.ledsmagazine.com/

13. LEDucation 2020 Webinar Schedule August 18–19, 2020 - VIRTUAL Trade Show and

Conference - August 18 –19, 2020 TRACK HIGHLIGHTS: CONTROLS. Register today for a

comprehensive online education about lighting controls technology and application from our

controls specialists. This panel will discuss how technology and user expectations have changed the

process of designing lighting controls. Our panel considers lighting control scope from the initial

narrative, to whole building networking, to individual luminaire controls and what happens between

drivers and the LEDs that they control. https://leducation.org/2020_seminars/

14. NAED Combines Eastern and South Central Conferences - Because of COVID-19 concerns, the

combined Eastern and South Central Region Conferences will be held Feb. 22-24, 2021 at the JW

Marriott Tampa Water Street, Tampa, FL. The conference format and scheduling will be similar to

past NAED Region Conferences. https://www.naed.org/events

15. NAED VIRTUAL SUITE MEETING - August 24 - 26, 2020 - This three-day event will allow

distributors and suppliers to schedule meetings and discuss 2021 business strategy at a critical time

of year. NAED says the virtual event will provide an easy way to schedule meetings, taking less time

than when industry execs plan for an in -person regional. NAED will open registration for virtual

suites to the manufacturers, suppliers and industry partners only. Distributors will then be allowed

to register in July, and you will both be able to begin making appointments with each other through

the Virtual Suite Directory in early August. Once appointment times are confirmed, you'll be sent a

calendar invite with all the necessary information. https://www.naed.org/virtualsuite

16. LUMADEAL is a Marketplace for the Lighting Industry - Smarter Solutions for Lighting

Liquidations! It is designed and built to provide suppliers a more efficient and effective means to

market and sell their Excess and Clearance products while offering buyers great value on high

quality goods. By connecting supplier’s Excess and Clearance inventory directly to a wide base of

lighting buyers, LUMADEAL’s Marketplace provides a transparent sales platform that creates

maximum value for both buyer and seller and enables the best possible value deals to happen.

LUMADEAL’s Marketplace connects lighting suppliers and buyers through various ‘deal formats’

including ‘buy now/fixed price’, ‘auction’ or ‘best offer’ listings. These different formats provide the

market a voice in the process and presents the buyer and seller the greatest possible opportunity to

strike a deal that is equally valued by both! https://www.lumadeal.com/ Follow @LumaDeal on

Twitter at http://www.twitter.com/LumaDeal

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17. Registration Opens for LEDucation 2020 Virtual Trade Show and Conference - The Designers

Lighting Forum of New York and the LEDucation committee have announced the LEDucation 2020

Virtual Trade Show and Conference, being held August 18-19, 2020, is open for registration.

Click here to register.

18. Smart Lighting Creates Safer Workplaces With Social Distancing Data by Mark Milligan - The

fact that smart lighting can play a significant role in helping people get back to the workplace safely

during this pandemic is rather astounding. This was not a planned use-case but is an example of why

future proofing is so important. We are now able to equip executives, facilities managers and

building occupants themselves with critical data to to keep employees safe as well as help them be

productive. Capabilities will only expand into the future, including new apps leveraging the data

streams and deeper integrations with other employee-facing applications and services. What was

once seen as simply a light source now brings entirely new meaning to building operations.

Digitization of lighting helps solve problems we never knew existed. This is a significant

opportunity for those who design, specify, and manage lighting systems to understand the full

capability and benefits of an IoT sensory system. https://www.ledsmagazine.com/

Global LED EnergyWatch…

19. Looking at Red LED Light Helps to Improve Eyesight for Elderly - A research led by researchers

of UCL (University College London) revealed that staring at a deep red light for three minutes a day

can significantly improve declining eyesight. Based on the result of the study, scientists believe that

new affordable home-based eye therapies could be develop, helping the millions of people globally

with naturally declining vision. The study was published on The Journals of Gerontology, titled

“Optically improved mitochondrial function redeems aged human visual decline. https://academic.oup.com/biomedgerontology/article-abstract/doi/10.1093/gerona/glaa155/5863431?redirectedFrom=fulltext

20. Your Guide to the New EU Regs on Lighting - The result of nearly five years of negotiations, the

new rules – the Single Lighting Regulation (SLR) and the Energy Labelling Regulation (ELR) –

will apply from 1 September 2021.The only exception to this dateline is for the removal of labelling

requirements for luminaires, which started from last Christmas.Both will have significant

consequences for the lighting industry. LightingEurope’s guidelines on both the SLR and ELR can

be downloaded for free at: https://europeanlightingpriorities.eu/guidelines.php

21. New Holding Company of Epistar and Lextar Named ENNOSTAR - Epistar and Lextar, the two

LED companies in Taiwan said that they are forming a new holding company via share conversion

with the aim to strengthen Micro LED and Mini LED display technology and business. The new

holding company is now named ENNOSTAR, revealed Epistar in its announcement following the

agreement of both companies. TrendForce estimates that Epistar and Lextar will collectively

account for 12.43% of the global LED chip production capacity after the formation of the holding

company. https://www.ledinside.com/news/2020/7/epistar_lextar_ennostar

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22. Osram, Like Signify, Is Ramping Up Conventional UV-C Lamps to Fight COVID - It’s working

on an LED version, but for now, a 30-year-old mercury tube is getting the call. On the heels of

Signify announcing it is cranking up production of ultraviolet-C-band (UV-C) lamps proven to kill

the coronavirus in a lab, Osram said that it, too is ramping up output of a similar product, which like

Signify’s uses conventional mercury discharge, not LED technology. Osram said Chinese hospitals

in Wuhan and Beijing have installed 2000 of the company’s 254-nm (253.7-nm, to be precise)

ultraviolet AirZing tube lamps, and that it has supplied about 10,000 to children’s nurseries. While

Osram did not rule out eventually using LED technology for UV-C, and told LEDs Magazine that it

is working on such a product, its 30-year-old mercury product is now getting the call in the fight

against COVID-19. https://www.ledsmagazine.com/

23. European Commission Approves ams' Osram Acquisition - The verdict is in: The European

Commission has approved the acquisition of Osram by Austrian optical sensor maker ams, ruling

that the combination of the two companies poses no competitive threat in the European Economic

Area. While Osram has shrunk and ams has grown since the acquisition efforts started, Osram is still

substantially bigger, with 2019 revenue of $3.91B at today’s exchange rate compared to $2.08B for

ams. https://www.ledsmagazine.com/

1. AR/VR Devices Shipment Projected to Reach 43.2 Million Units in 2025 - Total shipment of

AR/VR devices is expected to reach 5.12 million units in 2020, according to TrendForce. Thanks to

the release of various glasses-like AR/VR devices, the AR/VR devices market is likely to rapidly

expand from 2021 to 2022, with a forecasted shipment of 43.2 million units in 2025. This market is

projected to reach a compound annual growth rate (CAGR) of 53.1% from 2020 to 2025. To keep a

diminutive size, the projectors used in these devices are mostly small-sized LCD or Si-OLED

displays. https://www.ledinside.com/intelligence/2020/7/ar_vr_headsetshipment

2. Toyoda Gosei Develops Deep UV LED Light Module for Sterilization - Toyoda Gosei unveiled its

new deep UV LED modules developed for sterilization of water, air, and surfaces. Deep UV LEDs

emit short wavelength UV light including the UVC wavelengths that destroy the genetic materials of

viruses and bacteria. They are promising as a new sterilizing light alternative to replace mercury

lamps. https://www.ledinside.com/products/2020/7/uvled_toyodagosei

24. UK Trade Body: Smart Lighting Must Be Part of Europe’s €750B Recovery Plan - Lighting

Industry Association says no renovations without modern smart lighting that will support health,

wellbeing, and productivity that includes repairing and renovating buildings across Europe.

Although a question looms as to whether companies will continue to occupy commercial office

space at anywhere near pre-crisis levels, one school of thought says that the economic slowdown has

opened a serious opportunity to retrofit buildings with modern and healthy lighting that will invite

occupants. That appears to be the thinking at the Telford, England-based Lighting Industry

Association (LIA), which issued a long list of modern lighting features including smart sensors and

controls that together not only improve energy efficiency but also buoy human health and wellbeing

and foster productivity. https://www.ledsmagazine.com/

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LED TechnologyWatch…

25. Espen Technology Type A+B Hybrid Lamps - Espen Technology has

shared the reasons why their hybrid Type A+B LED lamps are so

popular. The UniFlexTM lamp family can be powered by an existing

fluorescent ballast (plug & play, Type A), as well as be directly wired to

line voltage (ballast bypass, Type B). The UniFlex TLEDs are offered

in linear T8 2’, 3’, and 4’ lengths, as well as U-bent models. Uniflex

lamps when installed in Type B mode, can be single-ended with

unshunted sockets, or double-ended with shunted sockets. The Uniflex lamps in Type A mode work

with dimming ballasts, and are compatible with controls and sensors. www.EspenTech.com

26. LSI Industries Launches AirLink Blue™ Wireless Bluetooth Mesh Network Solution for Outdoor

Lighting Control Applications - This simple, highly-configurable

product uses Bluetooth mesh technology to manage designated zones of

outdoor illumination on commercial property – helping customers

enhance safety, reduce energy costs and comply with applicable

regulations. AirLink Blue is highly suited to parking lots, gasoline

station canopies, and parking garage applications. It is compatible with

many of LSI’s most popular outdoor lighting products and ships

integrated into new luminaires, pre-commissioned to simplify installation

and startup. http://lsi-airlink.com/airlink-outdoor/

27. Top 10 LED Lighting Picks for July 2020 by Electrical Wholesaling - Congratulations to the

project managers and marketing teams of Acuity Brands, Dialight, Douglas Lighting Controls,

Appleton/Emerson, Litetronics, LSI Industries, LumenFocus, MaxLite, Nora Lighting and

SYLVANIA/LEDVANCE for having their products selected for this month's Top 10 LED Lighting

Picks. Do you have a product you would like us to consider for our future monthly picks? Send a

brief description of the product and a high-resolution image (300 dpi or better) to Jim Lucy, Editor-

in-Chief, Electrical Wholesaling, at jlucy@endeavorb2b.com. https://www.ewweb.com/

28. Ushio’s Epitex D-Series SWIR LEDs Now up to Four Times More Powerful - Ushio has

commenced production of its latest high-powered short-wavelength infrared (SWIR) LEDs, the

Epitex D-Series. Following the prior success of the S-Series, the Epitex DSeries achieves the world’s

highest output power and efficiency. Low-power chips are

mounted in SMT packages and moulded type LEDs; while

with 1 mm2 high-powered chips, the SWIR D-Series can be

mounted in EDC, SMBB, and TO-66 packages. For the

majority of wavelengths, a two-fold improvement of output

and efficiency is attained; however, the high-power versions

have ramped up their forward current to 1 A and gain a boost

of up to four times the original radiated power output. The

resulting efficiency improvement gives operators the opportunity to enjoy cheaper power output,

thereby reducing the overall cost per Watt. https://www.ushio.com/product/epitex-led-diodes-ext/

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Monthly Special Feature… The Changing Distribution Landscape – 2030 2040 2050 by David Gordon,

Channel Marketing Group - With the benefit of retrospect, we can presume

that the number of electrical distribution start-ups will mimic those in the past

ten years … in other words, very few and those that have had success, defined

as significant growth, are even fewer. (Okay, let’s run a crowd-sourced effort

to list electrical distribution start-ups in the last 10 years … post in the below comment section.) Aging

is a reality. Many distribution companies are owned by, and led, by first, second or third generation

owners. Most don’t have a succession plan nor are molding their staffs to lead their company for the

benefit of the founding family or to be able to sell to the management group.

The past 5-10 years have seen significant consolidation of “quality regional companies”. The

investments needed to support customer demands become more expensive … in the tool and the people

to utilize them. Channel convergence continues due to customers requiring materials from multiple

industries. So, where does this lead us?

Why thinking of this?

The above thoughts were generated during discussions at this year’s NAED regional meetings and have

been percolating with industry thought leaders. Consider this as “backroom” conversation.

Now add in marketplace disruption in the name of COVID-19 and the projection that the industry won’t

achieve 2019 revenues until 2023 or so. More importantly, net profit dollars will take time to recoup.

At the same time, ownership in independents age. The cost of operating a business will increase.

Investments need to be made to meet customer expectations (as well as retain them), especially in

technology (eCommerce and more). For many, talent needs to be acquired (do to aging or need for

different skill sets.) Who knows what will happen to margins over the next year?

Okay, I’ll stop as it gets depressing, but you get the point. There are business issues that need to be

addressed. While many thought companies would close in the height of COVID, few have so far. Some

may throughout the year due to cashflow issues, but for the most part, all will survive. The question

becomes, how can companies recoup their momentum to recapture their value and position themselves

for the future (or a more profitable future exit?)

Who are the distributors of 2030, 2040, 2050?

It’s feasible to project 5 years or look at a map and say “whom could / should buy whom” but, after a

while, there are limited acquirers. One can assume that CED and Sonepar will continue to

acquire. After that ??? WESCO is definitely a long term player after their acquisition of Anixter.

Now, let’s think about who else:

• Could Ferguson, a $20B distributor focused in the plumbing space decide to expand into electrical?

They already do much in residential lighting and the broader residential space. They play in the

MRO space and more. Here’s a link to their online electrical offering, and they offer 25,000 lighting

items online!

• What about Motion Industries, a power in the power transmission industry, expanding into the

industrial / automation segment of the electrical industry? Some MRO buyers even talk about them

as a material integrator.

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• Kaman Distribution Group, recently spun off to a private equity company, could decide to diversify,

similar to Motion. Years ago they purchased Zeller Electric and developed a relationship with

Schneider. Could they decide to do again? Remember, they have PE money and hence a need to

grow to determine their next event? Can you be attractive to equity markets as a single line player in

a relatively small market?

• What about EIS, a company that was owned by Genuine Parts and recently spun off to a private

equity firm (Audux)? Don’t know EIS? They are a large distributor focused on a specialty segment

of the market.

• What’s the future hold for Turtle and Hughes, Mayer Supply, Elliott Electric? As regional players,

could they get financial support and go national or will they eventually need to transition and

become acquisition targets as family ownership ages?

• Will Rexel be in the US market? Could they sell the division given on again / off again challenges in

trying to profitably grow the U.S. business? (Currently the stock price is in the $9 range and the

market cap is less than $3 billion.)

• Will Crescent be around in 10-30 years? Remember, it is family-owned.

• Who are tomorrow’s targets? If we go on the assumption that most of the acquirers (CED, Sonepar,

etc) are not too interested in smaller distributors (<$25M) other than as a fill-in location or to support

an RDC, then many of their acquisition targets become $50-250M distributors, or larger (the biggest

deal was All-Phase years ago, next biggest perhaps Platt?)

o Many of these companies are in AD and IMARK.

▪ AD currently has about 125 members. What happens to AD’s electrical group if it is

down to 40-50 members?

▪ IMARK can take a commensurate hit in membership as, overall, IMARK Electrical is

700+ members. It may lose some of its larger members, but still survives with a

contingent that is difficult for manufacturers to engage.

▪ Does a smaller AD eventually migrate to IMARK? Combination of member-owned

groups. Little known fact – IMARK is the original member governed group dating

back to the late 1960s!

• The industry talks about Amazon buying an electrical distributor. The better question, if you are

Amazon, is why would you want to buy an electrical distributor and invest millions of dollars into a

low margin business?

o Yes, the electrical, and broader MRO, market represent significant sales opportunities but

pursuing them requires significant investment. While Wall Street respects sales growth, they

much prefer profitability and margins. If you were Amazon and evaluated opportunities, are

there better places to invest your money? (and let’s be honest, independent electrical

distributors have answered this question by investing in real estate!)

• Could ????

Couple this with the percent of business that no longer goes through full-line electrical distribution

(think Grainger, MSC, Fastenal, Home Depot (and the old Interline Brands) Lowes, HD Supply, utility

distributors, power transmission distributors, online sources (niche sites), sold through ESCOs, direct

and a myriad of other ways. If there is a channel to market, electrical materials are sold that way. The

overall market is suspected to be 30-50% higher than what industry publications project is done in the

industry!

12

Attardi Marketing www.attardimarketing.com

Our business is changing your future…

And Manufacturers?

And we haven’t touched on how interactions will change between distributors and major manufacturers.

• While we’ve had a fragmented distribution market, the product side is equally fragmented with few

product categories representing a significant percent of a distributor’s spend. While some

manufacturers have been aggregators and it’s a part of their growth plan (to make Wall Street

happy), most cannot effectively market their product breadth to be a supplier of choice and hence

revert to leverage techniques. This enables others to remain relevant.

• Could distribution equipment companies align with specific distributors? Would this prohibit their

other businesses (more consumable products) from selling to other locations?

And this is just distribution ownership dynamics. Forward thinking manufacturers are already thinking

about some of these issues. So are some distributors as they think of their (personal ownership) timeline

and then integrate that into their business strategy.

What are the implications for your business?

Want a third-party perspective or someone to confidentially bounce ideas off of? Give us a call. We’ve

considered potential criteria, and areas for consideration, to game play possible consolidation criteria.

Considering the dynamics and having insight into “what could be” can help you plan for tomorrow’s

strategy (as today’s strategy is already baked!) https://channelmkt.com/

https://electricaltrends.com/the-changing-distribution-landscape-2030-2040-2050/

Remember @illumigeddon.by Chris Brown…… ”some businesses are out of business and don’t

even know it!” He’s really good………. “My simple suggestion for distribution response to both is to

find ways to stay relevant and invaluable to both clients and vendors. Distribution must add significant,

measurable, recognizable value to the selling equation, if it is to stay in the equation. For many

distributors, that means a rethinking of their business model. It means investing in a new level of

technological expertise as smart lighting (and then intelligent lighting) becomes the norm. Lighting is

not just about light anymore. There is a whole new language of lighting that must be learned, understood

and communicated to increasingly sophisticated clients.”