Who is the biggest challenger of the European electrical installation wholesale?

In our latest report of the European electrical installation monitor, we focused on the purchase behaviour of European electrical installers in seven countries.

One of the key findings is that their purchase behaviour remains a very traditional and the specialised installation wholesale remains very dominant. Looking at the share of wallet of the installers, approximately 70% is spent via the specialized wholesalers.

The biggest challenger in terms of share of wallet is direct supply via the manufacturers. This currently represents 10% of the total share of wallet of European electrical installers.

In some countries, like Germany, this is even higher at 14%. Even though their purchase behaviour remains very traditional, there are some clear developments in the market that could favor direct supply from manufacturers in the future.

One of these developments is online ordering. This has increased significantly in all countries. For example, in the Netherlands, 70% of all orders at the specialised wholesale are placed online. This online ordering behaviour might be a double edged sword for the specialised wholesale. One the one hand, it shows that the wholesale has adopted e-commerce well and are not in danger of being outperformed by pure online players like Amazon when it comes to online ordering. On the other hand it might weaken the strong ties with the installers, as the face-to-face contact at the stores will be reduced.

Direct supply from manufactures might benefit from this, as the weakened ties might make it easier for the installers to start placing more orders online at the manufacturer in the future. Furthermore, they are already used to ordering products online, so that is no longer a strong barrier.

Currently 47% of all orders placed at manufactures of electrical equipment is placed online.

The potential, however, is significantly higher when it comes to online ordering directly from the manufacturers.

We asked the European electrical installers if they use any digital tools from manufacturers of electrical products to place their orders and if not, if they would be interested to do so.

On a European level, 34% of all electrical installers use digital tools from manufacturers of electrical products to place their orders. This is the highest in the Netherlands with 56%.

However, 41% of the European electrical installers would be interest to use an online direct ordering option from manufacturers. Only 22% would not be interested in this option at all.

The highest interest can be found amongst German installers, with 73% finding this option interesting.

So there is still a big potential for more direct supply via manufacturers, especially via online ordering tools and software. This might even start to challenge the dominant position of the electrical wholesale in Europe in the future.