Robust growth expected for electrical wholesalers market

02-07-2022

Katie Plumstead, Group Marketing Manager at Scolmore Group, looks at the findings of the latest report on the electrical wholesalers market and what they tell us about the future.

The 17th edition of the ‘Electrical Wholesalers Market Report UK 2021-2025’, published by AMA Research, represents an informed and up to date review of the overall electrical wholesalers market, major product sectors, market trends, strengths and weaknesses and major wholesalers.  The report analyses the current state of the electrical wholesalers’ market and provides an assessment of market prospects. 

It highlights the significant contraction of the market in 2020 due to the impact of the Covid-19 pandemic on construction activity and on the economy more generally, with only modest recovery expected in 2021.  However, it reports that the market is expected to return to robust growth in 2022, as the economic situation improves and the construction sector revives, and market value will exceed pre-pandemic levels by 2025.  Market value and profitability remain constrained by intense price competition, especially from online distribution channels, but opportunities for growth remain through wider use of high value, advanced technology products and ancillary services.

Covid-19 led to significant curtailment of construction activity and electrical wholesalers’ business operation.  As trading gradually returned to more normal conditions in the latter part of 2020, supply shortages were experienced in many key product areas, leading to price rises.  Lighting and cable systems remain the largest product sectors within the electrical wholesaler market, accounting for around 46% of market value, though lighting’s share of total sales has declined significantly in the last two years. 

Direct sales and specialist distributor channels are the most notable competitors to the electrical wholesalers with electronic component distributors, trade catalogue operations, internet retails and merchants also significant.

Key issues

A number of key issues covered in the report include:

• The effects of Covid-19 pandemic and the UK exit from the EU on the electrical wholesalers market and the impact on the market going forward.
• The increase in raw material costs and its impacts on the market.
• Market expansion in new and emerging product areas, particularly in the development of integration and greater connectivity between devices through the Internet of Things and Industrial Internet of Things.
• Changing legislation regarding energy efficiency driving moves towards higher specification products, particularly in heating, ventilation, and lighting control
• Key market influences and analysis of the construction industry and its impacts on the electrical wholesalers market.
• Trends in online trading and its impacts on the distribution channels as well as wholesalers market shares.

Weathering the storm

The impact on the industry of the Covid-19 pandemic and the UK exit from the EU have been well documented.  Supply chain challenges, staffing issues, increases in raw material costs and shortages of materials, have all put a huge strain on companies operating in the sector. 

Across the Scolmore Group of companies – Click Scolmore, Ovia, ESP and Unicrimp – there has always been the ability to hold vast stock levels which means that each of the businesses has been able to continue to fulfil orders for customers right through the pandemic and beyond.  Whilst continuing to deliver the levels of service its customers have come to expect, Scolmore has also invested in a number of significant product development programmes to bring new and enhanced ranges to market - making 2021 one of the groups busiest and most successful years in terms of major new product launches.

Making connections

The report highlighted the importance of market expansion in new and emerging product areas, particularly in the development of integration and greater connectivity between devices.  With the launch of the Click Smart+ range from Scolmore and the Fort Smart Security range from ESP last year, the company has provided the market with a range of smart home and security products that are designed to simplify and streamline connected home devices – lighting controls, smart sockets, security cameras, intruder alarms, video doorbells and sensors.

Fort from ESP is a complete range of smart security products, which includes intruder alarms, video doorbell, video security light, sensors and a selection of 1080p cameras.  They all operate under a single APP – the ‘Click Smart+’ APP – which is completely subscription-free, with no additional fees incurred. By bringing the operation of the new Fort range under the well-established, tried and tested Click Smart+ APP from Scolmore, users will have control of a raft of connected home and security products all from one secure, easy to access platform.  Click Smart+ utilises Zigbee technology – one of the most widely adopted smart home communication protocols. 

The Click Smart+ range comprises the Smart Gateway Hub – the control centre of all Zigbee connected devices –smart sockets, a plug-in smart socket, switching and dimming receivers, camera and various sensors.  The bespoke Click Smart+ App gives householders ultimate control of the smart devices, which can also be operated through voice control with a smart speaker.

Ongoing wholesaler support

In the midst of the long term disruption that the pandemic has caused, Scolmore anticipated that its wholesaler customers would need greater support than ever as they navigated the difficult journey of meeting the needs of contractors and installers.  With this in mind the company invested in a number of areas of the business so that resources were there to meet their customers’ heightened requirements.  This included expanding the customer service and technical departments and providing easy access to a growing range of training resources and marketing materials. 

Compliance matters

As Scolmore continues to grow, with more than 350 members of staff currently employed across the group of companies – Scolmore, ESP, Ovia and Unicrimp – the decision was made at the beginning of the year to appoint a legal and compliance manager.  Manuela Rubino Courtney, a highly qualified and experienced operator, joined as Group Legal and Compliance Manager to ensure that the business, its employees and its projects comply with all relevant regulations and specifications.