Cordless is taking over the power tool industry and will one day represent the total market, Joe Smith of Metabo Power Tools / North America told the Specialty Tools & Fasteners Distributors Association.

In his Associate State-of-the-Industry address, Smith said “revolutionary technological innovation & development are driving the cordless trend.”

Other industry trends include productivity, safety equipment and such accessories as fasteners.

The introduction of lithium ion battery technology has been a ‘game-changer’ for the power tool industry, Smith said. 

“We’ve been using lithium batteries in our laptops & cell phones for a long time, but only in the past 10 years has it begun to be used for power tools. The reason? Lithium can be a very volatile material, requiring careful separation of components and electronic management during charging and discharging cycles.”

Smith cited the 2016 recall of hundreds of thousands of new Samsung smartphones because  two volatile materials could come into contact during charging. 

Today’s power tool manufacturers have developed lithium ion batteries for ‘high current draw’ applications. “Today’s lithium Ion technology finally opens up the door for extremely high current draw tools like angle grinders, stationary and benchtop tools and large rotary hammers. 

“Today, every power tool manufacturer is aggressively working to establish their battery platform as the preferred system, because once the end user has chosen a platform, it’s much easier to get them to expand to more compatible tools, and it’s much harder for a competitor to change this customer over to an entirely new battery platform,” Smith said.

Cordless uses extend into vacuums, lawn and garden tools, heated jackets and augers for ice fishing.

At around $5 billion, the U.S. electric power tool market is significant, and grew at a healthy 9% in 2016. Cordless technology continues to cannibalize the corded power tool segment – with cordless now 60% of the market, corded 30% and benchtop/stationary representing 10%. 

Smith noted the U.S. power tool market “underperformed” GDP during the 2008-2009 recession, but by 2010 over-performed overall GDP with healthy growth rates of 5-10%.”

• The second major trend we see in the power tool industry is productivity. For example, the ‘Beveler’ performs the same task as an angle grinder, with 75% less labor, Smith pointed out.

• Major trend number three is increasing safety and environmental regulation & enforcement, which “goes way beyond just the power tool industry, but is keenly felt in our business,” Smith finds. 

In 2016, a Houston jury awarded the family of a worker who was killed on site $48 million. 

“We all know that safety is simply ‘the right way’ to operate, but it’s also smart business,” Smith added.

OSHA has begun enforcing the 2017 “Silica Dust Regulations” prohibiting generating concrete dust, without an approved ‘Dust Collection System.” That makes training end users on proper use the right power tool, “critically important to prevent injuries and excellent way to add value.”

Silica dust is a carcinogen and exposure over time can be fatal, which is why OSHA reduced the amount of silica dust a worker can be exposed to by 80%. 

“All of this creates opportunity for those distributors who can help contractors become compliant, giving you a competitive advantage,” Smith said. Distributors provide “added value” by helping customers avoid litigation, penalties and fines. Sales of products required for compliance like vacuums, dust collection shrouds, hoses, filters and breathing masks are increasing.

Distributors should sell safety features such as Metabo’s 1966 the introduction of ‘Mechanical Safety Slip-Clutch,’ which absorbs the torque from a grinding disc when it gets locked up in the workpiece. 

• Power tool accessories – including fasteners – are a natural extension of selling power tools, Smith said. The same principle applies when McDonald’s asks the customer, ‘Would you like fries with that?’” 

“After the contractor drills the hole, the next thing they need to do is fill that hole with something. like an anchor or a fastener,” he explained. 

Smith’s career started with selling spark plug wires and battery cables for Belden Corp.

“I learned how to be a ‘salesman dealing with ‘rejection’ but importantly, learning how to ‘listen’ to my customers,”  Smith reflected.

He next joined Skil Power Tool Corp, which was later acquired by Robert Bosch Corp. of Germany. Then it became important to sell the entire “system,” not just the power tool. 

He joined Metabo in 2016 after Mateo was acquired by Hitachi Koki Division and six months later the division was sold to the world’s largest private equity investment firm, KKR.

Headquartered in the automotive and machining hub of Stuttgart, Germany, which gives Metabo “a talented labor pool of engineers and designers.”

With 1,000 employees in Germany and 1,800 people around the world, “We control the entire design and manufacturing process, including die-casting, machining, injection-molding and final assembly in Nurtingen, with a sister plant in Shanghai, China.” 

The two underlying economic indicators that drive power tool sales are total new residential and commercial construction and industrial production; and industrial production, Smith said.

“Fortunately for all of us, projections for both of these indicators are fairly robust for the next two to three years, and the power tool market is anticipated to continue to grow at an annual rate of 4% to 8% during this period,” he said.

Power tools can “drive sales of many other product categories, while adding value,” Smith advised distributors. Web: STAFDA.org