There appears to be a 60% chance that the U.S. economy won't fall back into a recession in 2012. Let's roll with that.
When EW's offices were in Manhattan, I used to work with a guy from Miami who was always freezing in the winter, even if the outside temperature was 30 degrees.
When we would go out for a stroll in the winter at lunchtime, he always wanted to walk on the sunny side of the street because he felt it was too cold on the sidewalk where skyscrapers were blocking the sunlight. I didn't mind the New York winters and didn't go out of my way to walk in the sun instead of the shadows until I met him. But he was on to something — it really was much more pleasant to walk on the sunny side of the street when you had that choice.
In a sense, we all have a choice to walk down “the sunny side of the street” with our outlook on the U.S. economy. It's way too easy to be pessimistic, with many economists pegging the chance for a double-dip recession at 40 percent, the Greek debt crisis, stagnant employment, and a slow- to no-growth nonresidential construction market.
The list goes on an on. But what happens if the economy avoids the dreaded double dip and starts to improve? What will things start to look like then in the electrical market? Let's take a walk down the sunny side of the street and look at some trends that could boost your sales.
Demographic trends and the tough realities of the economy now support some growth in multi-family housing. As the demographic bulge in the number of first-time homebuyers works its way into the housing market, many of them are discovering that their financial situation is still too precarious to plunk down a downpayment for a single-family home, so they are looking at renting for a while. This trend, as well as the growth in the number of senior citizens who want to scale down to an apartment or condominium, has caused a spike in multi-family construction. The cities seeing the most growth in multi-family housing permits right now are Boston, Chicago, Dallas, Los Angeles, Miami-Fort Lauderdale, New York, Seattle and Washington, D.C.
Building alterations/retrofits now command a much larger share of the nonresidential building market. According to Robert Murray, V.P. of economic affairs for McGraw-Hill Construction, New York, over the past four years, alterations have not declined as much as a percent of U.S. nonresidential construction, and have increased market share from less than 20% in the 2000-2007 era to more than 25% for 2009-2011. According to his data, in the retail and office market segments this percentage is even higher at more than 35 percent from Jan. 2008 through Aug. 2011. That's good news for commercially oriented distributors that focus on lighting retrofits, electrical service upgrades, and tenant requests for alterations and changes in their leased spaces.
WiFi will be everywhere. The steady spread of WiFi has all sorts of communications and business productivity benefits for your business. Those of us that travel with a smartphone, iPad or Android tablet already have our favorite hotels, coffee shops, restaurants and public buildings that offer free WiFi access. Many frequent travelers who rely on their smartphones and tablets when they are on the road often try to stay at the hotels that offer free WiFi and drive right past the ones that still charge $12.95 per day.
Customers that rely on WiFi may start evaluating electrical distributors' counter areas on the same basis. If they have some downtime while waiting for an order to be filled in your counter area, many of them would really appreciate high-speed WiFi access while they wait. Learn a marketing lesson from Starbucks — provide free WiFi in your counter area and customers might just hang out longer and buy more stuff.
While making your 2012 market plans you may want to sketch out two scenarios: one that incorporates a mild downtown, and one that takes you down “the sunny side of the street” in the electrical market and shows some growth next year. If nothing else it will be a more enjoyable stroll.