Q1 2018 Pulse of Lighting Market Report

Recognizing the importance of the lighting market to distributors and the changes / challenges 

that the conversion to LED created (changing product types, declining prices, more functionality, more imports, etc),  William Blair, a leading investment banking firm with an industrial practice, sought to better understand the impact on distributors.  They partnered wit

h Channel Marketing Group to launch a quarterly Pulse of Lighting Market study to solicit feedback according to the electrical distribution channel (so direct sales and other channels are excluded).

This report provides an independent sense of the market versus the “quiet” industry networking or being captive to information from manufacturers.

Highlights from our Q1 Pulse of Lighting Market Report: (click to download)

• 200 respondents with about 75% being electrical distributors
• Feedback from manufacturers and reps coincidentally mirrored, within an acceptable range, the feedback received from distributors
• Market is “strongest” for small and mid-sized projects … new and renovation.  The large market is ….much slower
• The market challenge is price and the outlook is continued pricing challenges.
• Many are seeing interest in wireless controls, but there is still confusion / hesitancy in the marketplace
• “Unfamiliar” brands represent a significant percent of the market. This was defined as “non-top 7” companies
  • We recently completed a project and were “amazed” at the number of lighting companies we had never heard of.  In the coming weeks I’ll aggregate and share.  Distributor purchasing / senior or product management may want to develop a report of the # of lines that they purchase from to gain a better understanding of this segment of their business.  The number may be right to serve the customer, but it is serving you profitably?
• Backlog remains steady. Inventory remained steady / improved a little … perhaps due to what segment of the market is growing and any stocking is on “white goods” … commodity, price-driven SKUs.
• From a sales perspective … depending upon the audience 5.5-7%.  Distributors are reporting 6% in dollars, slightly higher in units.
  • Note: while many expected that units would be significantly higher, the issue is 1) more prevalent on lamps, 2) regarding fixtures, new ones are coming out with “new” features so manufacturers are pricing where replaced product was … cannibalizing sales with “old” product being pushed out and 3) it’s questionable how many distributors are proactively tracking this vs “guessing”.

William Blair has authorized ElectricalTrends and Channel Marketing Group to distribute this report complimentary.

Click here to download the report.

• Due to the number of AD members who responded, there is a separate report to compare AD member responses vs industry response. If you are an AD member and would like a copy, email for a copy.