Latest from Editorial Commentary

Photo 68138914 / Haiyin / Dreamstime

EVs Hit a Rough Patch

Jan. 29, 2024



Times & Trends: Making Light of a New Situation

May 31, 2016
A digital revolution sparked by LEDs is blowing up the lighting market. Here’s why there will still be a place for electrical distributors.

If you were riding on a drone flying over the 600 booths and through the dozens of technical sessions at the Lightfair trade show held recently in San Diego, you would have seen and heard many wondrous things.

LED lamps changing color to adapt to the circadian rhythms of human beings. Lighting fixtures with eyes that watch booth traffic and then report back to their master each night about which booth displays attracted the most attention and where attendees lingered the longest.

LED lighting systems operating on low-voltage Power-Over-Ethernet (POE) wiring networks that are 20% less expensive to install than pipe-and-wire systems. Panel discussions about how networking companies like Cisco are learning to work with lighting companies to produce lighting systems that will make buildings and cities more user-friendly, safer, economically run, and totally connected to the Web.

This may be where the lighting world is headed, but some big questions exist about how many electrical distributors and their customers will be along for the ride. While there’s still demand for traditional, non-LED lighting products, the future will very definitely be dominated by LEDs and whatever other solid-state/digital illumination technologies may emerge.

When you take a step back and think that lighting as a product area accounts for at least 20%-25% of the typical distributor’s business, and that chunk of business is almost totally evolving toward LEDs, it’s a product revolution of a magnitude the electrical wholesaling industry has probably never seen. It’s a revolution that will require entirely new inventory management strategies and a serious investment in training to keep up with the constantly evolving world of LEDs.

Distributors have always had to strike a delicate balance with their lighting inventory so they could service the day-to-day needs of their core contractor base while keeping a watchful eye on product obsolesce.  Many are now freaking out about stocking too many LED product with the life expectancy of the gestation period of a giraffe (13-15 months). And while some distributors may break out in a cold sweat when they hear terms like “color tuning,” “indoor positioning” and “TM-30 standards,” they should start getting familiar with them now if they want to be the same educational lighting resource they had been when incandescents and fluorescents reigned supreme.

Distributors are a resilient bunch, and it’s all quite doable, particularly if they can maintain and build the local relationships with the local companies doing the installation of these new-world lighting systems. They don’t have to invest right away in some of the most mind-boggling new technologies, like indoor positioning systems that use sensors in lighting fixtures to track shoppers and employees, or the cross-trade building automation systems now digitally linking lighting to HVAC, security and other building systems, until those technologies prove themselves, their communications standards are set, and there’s actual demand for them in their local markets.

While these technologies offer some fascinating benefits to large installations at Fortune 500 companies, cities and municipalities, and other customers who want to redo their lighting on a grand scale, the thousands if not millions of customers who live on Main St. America won’t be looking at them anytime soon. These smaller customers will invest in LED lighting because of its obvious benefits in cost and quality of light, and you should already be able to sell these folks a top-quality digital lighting system without touching the high end of the market.

Distributors will have to stop thinking of lighting as a bread-and-butter shelf-good item like they did in the past, and start looking at it as a new market opportunity that  with the right investment in inventory and training  they can build out from their existing customer base into what could very well turn out to be some exciting new market opportunities.

About the Author

Jim Lucy | Editor-in-Chief of Electrical Wholesaling and Electrical Marketing

Jim Lucy has been wandering through the electrical market for more than 40 years, most of the time as an editor for Electrical Wholesaling and Electrical Marketing newsletter, and as a contributing writer for EC&M magazine During that time he and the editorial team for the publications have won numerous national awards for their coverage of the electrical business. He showed an early interest in electricity, when as a youth he had an idea for a hot dog cooker. Unfortunately, the first crude prototype malfunctioned and the arc nearly blew him out of his parents' basement.

Before becoming an editor for Electrical Wholesaling  and Electrical Marketing, he earned a BA degree in journalism and a MA in communications from Glassboro State College, Glassboro, NJ., which is formerly best known as the site of the 1967 summit meeting between President Lyndon Johnson and Russian Premier Aleksei Nikolayevich Kosygin, and now best known as the New Jersey state college that changed its name in 1992 to Rowan University because of a generous $100 million donation by N.J. zillionaire industrialist Henry Rowan. Jim is a Brooklyn-born Jersey Guy happily transplanted with his wife and three sons in the fertile plains of Kansas for the past 30 years. 

Sponsored Recommendations