Cree – Building Market Awareness Through Retail Merchandising

We’ve all heard, and seen, how LEDs are taking over the lighting space.  We’ve seen lighting manufacturer strategies … and they all focus around selling fixtures with LEDs in them.  And we’ve heard how LEDs are so much more efficient that their increased cost should not be a major consideration as the total cost of ownership over the lifespan of the LED will more than justify the initial cost.

While all this can be true, it’s still been a challenging sell for many.  It’s not like the lamp sources of old.  LEDs need to be sold, they are not just ordered by customers.

Cree, being an “upstart” in the lamp industry (and I learned from Sylvania many years ago not to call these light bulbs!) fought for respect in the fixture world.  They first tried the OEM approach and wanted to be the LEDs inside others’ (Cooper, Lithonia, etal) fixtures.  When that didn’t work, they launched their own line, selling through distribution and selling direct.  They’ve done a great job in expanding their product offering and gaining acceptance.

And with the LED “replacement” lamp, they are gaining a new level of respect, courtesy of Home Depot and big-time advertising.  In essence, these two initiatives are bringing Cree awareness at the consumer level (and isn’t every architect, engineer, maintenance person, financial decision maker, contractor and others a ‘consumer’ at some level?)

Home Depot, at least the one here in Raleigh, has a large display of Cree LEDs as you walk in the front door.  By getting into Home Depot and making such a splash, Cree gains credibility as consumers essentially feel “if they are carried at Home Depot, it must be a good product, otherwise Home Depot wouldn’t support it”. And having heard manufacturers talk about Home Depot’s purchasing processes, we can presume Cree and its products have been well-vetted.

The other Cree initiative that occurred this

spring is its advertising spend.  We’ve seen billboards (sorry for the poor photography), heard ads on radio, seen the homepage of www.cnn.com with Cree ads and even saw sports sponsorship during the NBA playoffs (halftime show).  Click here to Google a number of Cree’s tv commercials.

Advertising has a way of creating brand awareness and using retail merchandising (as a manufacturer) can help set you apart.

Now the challenge, in my opinion, is getting homeowners to purchase LEDs at the current price point. Most people, when changing a lamp, want to maintain consistency. To convert to LEDs, a homeowner really wants to do an entire room or possibly the house.  I went through this with CFLs but did a “whole house conversion years ago for $200-300.  The price of LEDs will, in all probability, need to continue to decline to make it affordable for homeowners unless other retail tactics such as couponing and value-paks are developed.  The LED is traveling the retail road of the LED, but for the commercial and industrial markets, awareness at retail will help build market awareness.

What have you thought of Cree’s advertising? Are you seeing LEDs moving into the renovation / remodeling / replacement markets?