Five Important Truths About Our Industry

GAWDA’s Annual Business Forecast is, hands down, the most favorite story for Welding & Gases Today’s editorial staff to work on. It involves talking to GAWDA members all over the country, hearing about the industry, the good and the bad, upcoming products, and what may happen during the next 12 months. Writing it involves a lot of details (some of us are data devotees), working late nights and lots of pizza. We have done this every year since the first issue, and each time I am amazed at what this industry does on a daily basis. As the economy continues its slow climb upward, it should be a fabulous year! Here are some truths uncovered from the 2014 Business Forecast . . .

Passivity is the kiss of death . . .

The successful companies are not sitting back on past laurels. Instead, they are seeking new markets, new product lines, new ways to do business, new ways to market (Social Media, anyone?) and refining old ways. Some, like Lampton Welding Supply, have invented a product and are manufacturing it. (Story is on page 84.) Others have learned how to make more money from their expertise and are becoming the go-to-solution-providers in their markets. The James C. Dawes Company got it right and recreated itself by training staff, learning new products and making a claim in the shale mining fields. The Member Profile begins on page 12.

The Fight for Independence has taken to the streets . . .

Distributors are refusing to say “uncle” after a few years of intense M&A activity. This is very different from previous years. The surprise and anger have abated, and now there are strategies to fight back as locally owned and independent companies gain back the lost customers who shopped on price. It will be an interesting year.

Retail shows some interesting trends . . .

Companies are not only polishing and spiffing up their websites and e-commerce capabilities, but their bricks and mortars stores too. Competing with the big-box stores down the street, they are adding signage, increasing inventory, expanding space, offering in-store demonstrations, even splashing color on walls that had been industrial grey. Martha Stewart, watch out!

Some small retailers are using mapping tools to lure customers to their stores. A recent article in The Wall Street Journal described the usefulness of this technology for a small business trying to get an edge on big competition and the Internet. (Sound familiar?) Businesses simply upload their floor plan to Google, Nokia or other free indoor navigation apps. When people search, your store name and location come up on a map. For more detail, stores can let customers see product availability. Inventory data is fed to an app like “aisle411” or “Retailigence.” Customers can set up a shopping list and just pick up the supplies.

It’s a well-known fact in the industry that the commodity-like pricing of hardgoods no longer yields much profit for the distributor. As a result, many businesses have decreased the sale of hardgoods and upped the sale of gases, as “that’s where the money is.” This declining sale of hardgoods by some distributors has created a wide-open trail of opportunities for others. But knowing how to sell hardgoods and make a profit is a puzzle not mastered by everyone. Vending machines are one piece of the puzzle, and Mississippi Welders Supply Company is making it work, as the story on page 80 shows.

Innovation is alive and well . . .

I get that the milk and bones of any business is the hard work put in by employees, and technology’s purpose is to make that work more efficient and productive. That said, I’ve been called a digital diva who should not be let loose at the Consumer Electronics Show.

The gases and welding industry is anything but stagnant, as reported in the Supplier Forecast, beginning on page 32. New products and enhancements to existing ones will help customers be more efficient and productive. Automation continues to be a big deal in the marketplace and is advancing at a furious pace. Many distributors are training salespeople and service technicians on this technology, as end-users search for better ways.

Customer demands have NOT changed…or have they? . . .

Most distributors indicate that customers still want the same thing: products and service. But now those products must be provided at a low cost, and service must be provided more quickly (and less costly), so efficiency and productivity improvements are imperative for both suppliers and distributors. One distributor likens his business to a utility. “Our products must always be available; they should be cheap, and we take care of everything.”

Finally . . .

As we move into 2014, there are some hot issues on the table, including healthcare, the supply of helium, manufacturer solicitation of direct business, the next-generation employee, argon and others. The 2014 Annual Business Forecast, beginning on page 32, tells the story.

Gases and Welding Distributors Association
Carole Jesiolowski Meet the Author
Carole Jesiolowski is senior editor of GAWDA Media and executive vice president of Data Key Communications located in Syracuse, New York. She can be reached at 315-445-2347 and carole@weldingandgasestoday.org.