Chris Brown, CEO of Wiedenbach-Brown, recently penned an interesting perspective on how change in the lighting industry may impact lighting distributors.
The article begins:
Five years ago, we were in the light bulb business. Today we’re in the semiconductor business. Five years ago, we were dealing with three lamp companies. Today we’re dealing with a dozen or more. Five years ago, no one asked whether Philips, Osram or GE would still be in business in 5 years. Today we get asked that legitimate question about every SSL startup. Five years ago, no one asked about LM79 and LM80 tests, performance warranties, driver failure, flicker, whose chip is being used, future proofed lighting etc. Today, these questions are routine.
Five years ago seems like ancient history!
Today, I’m thinking about 5 years from now …
Click here to see the rest of the article at EnergyWatch.com.
He adds that changes in the lighting industry will likely adversely affect many distributors, writing, “Some lighting distributors may already be out of business, just don’t know it yet.”
It’s an interesting read. Chris is a smart guy who knows his business.
In my view, threats for lighting distributors that are technology-specific include 1) long life of LED sources threatens MRO business, 2) lighting and control is getting more complicated all the time, and 3) many new SSL suppliers and products are of uncertain business strength and quality. The first, of course, being the biggest threat.
But there are opportunities, too. The biggest is the retrofit opportunity for LED sources, requiring product qualification expertise and aligning with the right manufacturers. A business model based on selling lighting as a service (lumen/hours) instead of product fulfillment could be an opportunity (or a threat), with potential new services such as monitoring and analytics. End of life SSL replacements will be largely luminaires, offering upgrade sales opportunities. Controls is coming into its own, offering new sales opportunities. Pushing high-end SSL products such as luminaires with integrated intelligent control, information, color tuning, constant light output offer good margins.
One thing is certain, which is that solid-state lighting continues to be a disruptive force in the lighting industry. In an SSL future, distribution will survive by adapting to changing business conditions and could even thrive if distributors continue to provide value through specialization and innovation, giving customers a reason to use them.
I’d be happy to get your thoughts on this.
