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| Will the demise of yesterday’s light bulb (lamp) lead to changing lighting fixture / lamp manufacturer relationships? |
Had an interesting discussion today with a distributor regarding lighting / lamp manufacturers which created the thought of “what is the future of these companies?”
For clarity, the discussed manufacturer marketplace is:
- Philips, Sylvania and GE being companies that are lamp and fixture companies. And, it appears, that all 3 are attempting to figure out what their model is / should be for the future.
- Then there is Cooper, Acuity, Hubbell, Juno, Cree and others that are traditionally fixture lines (and yes, some of Philips’ lines falls into here – Lightolier, Thomas Lighting, etc) and smaller lines like Rab, Atlas, Topaz Lighting and others or LED companies like Digital Lumens, Start Lighting and Lunera (essentially think of these lines as “who?”)
- and we can’t forget companies like TCP (known primarily for lamps but now also into fixtures), Eiko, Satco and others that are more on the lamp side of the business.
And LEDs, plus consolidation, have muddied the waters.
The discussion then turned to perhaps a more philosophical / blue ocean discussion … what will LEDs mean to lighting supplier “relationships” for the future?
- With LEDs growing, does this diminish the need for lamp replacements? Is lamp replacements a profitable, and large enough, segment of the market for many distributors?
- With LEDs growing, and if a distributor focused on new construction and retrofits, and minimally on the replacement / MRO market, do they need a “major” lamp line (Philips, Sylvania, GE) or could they do very well with fixture lines and “tier 2/3” lamp suppliers?
- Given that LEDs are 35%+ of fixture manufacturer sales, the component suppliers are now different with LED components being available from a multitude of suppliers. Does this make the “big 3” less relevant longer-term?
- What does it mean for someone like Cooper Lighting and the potential leverage they may have given their ownership by Eaton and a potential relationship (lead generator) with Eaton’s ESCO business?
- While many talked that Sylvania should have / could purchase Acuity, is Acuity in the drivers seat now?
- Will the lamp “big 3” that we remember of 2009 be of important in 2019 (5 years from now)? Will the drive to “control the hole” in the ceiling and cannibalize existing business (which was necessary given the technology change) result in changing corporate dynamics in the lighting industry? And what does this mean for distributor relationships? The companies that they align with? Have they staff and train their organizations and the resultant impact on profitability?
4 Comments
my lamp business through my primary lamp line has been declining and my people are buying more from secondary markets. Maybe I don’t need them? From my seat, Philips, GE and Sylvania seem to be stuck, in a fog or frequently change their strategies.
The transformation GE Lighting is making is very impressive and they are in it to win it! Check out their new Lumination fixture line and LightGrid wireless outdoor control system as a reason to believe. Awesome innovation!
The above obviously brought to you courtesy of someone in GE’s marketing department. GE Lighting is a mess, as evidenced by their management carousel in the past 12 months. Products and Leadership are lacking right now.
The entire lighting business will be driven by the retrofit marketplace for many years to come, which will decimate the traditional lighting rep. As LEDs become more efficient and less expensive, I believe there will be one more spin of “retrofit of the retrofits” after 2-3 years have passed and there is an economic argument to change out LEDs with better/more efficient/less expensive LED products. Owners (and distributors) would be smart to invest and provide solutions that offer some sort of upgrade path, i.e. replaceable LED tube lights vs. integrated LED 2×4’s or LED lamps with separate drivers, both that need an electrician to “upgrade” vs. a simple MRO play. In addition, control systems will become “standard and expected” as LEDs are easy to control, and the control system hardware will migrate to the fixture and/or lamp and away from the wall or electrical panel. Look to partner with control companies with a strong understanding of the importance of software and data/information as that will become the differentiator as the prices for the hardware collapse over the next several years. Last but not least, distributors need to learn to leverage their strongest asset that the market cares about – not their warehouse or place utility or ability to act like a bank, but their RELATIONSHIPS and LOCAL MARKET KNOWLEDGE and figure out how they can sell more “solutions” (not products) through their existing customers. Some of these solutions might cross into other areas – who thought six years ago that electrical distributors would be offering PV solutions? What about other energy efficiency plays? Plug loads, smart thermostats, de-stratification fans for warehouses, energy efficiency software and dashboards? The easiest way for a distributor or for that matter any business to grow their business is by selling more to their existing customers, and not by finding new customers..
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