Interviews + Opinion, Lighting Industry, People

My Interview with Chris Brown on Illumigeddon

Earlier this year, I interviewed Chris Brown for tED Magazine. The topic: the impact of SSL technology on electrical distribution. Reprinted with permission.

Christopher Brown is CEO of Wiedenbach-Brown, a national full-service lighting and electrical solutions distributor. Prior to the company’s acquisition by USESI in 2006, he was president and chairman of the board for 30 years. He witnessed the company grow from a New York metropolitan-area lamp and luminaire distributor to a national full-service lighting and electrical solutions provider with relationships with hundreds of clients and more than 300 lighting manufacturers.

Speaking at the Strategies in Light conference in February 2015, Brown sounded an alarm to distribution about what he calls “Illumigeddon”—the end of the lighting industry as we know it. The advent of solid state lighting (SSL), he warned, promised a massive retrofit opportunity in the short term but a decline in lighting MRO sales in the long term due to the extraordinary long life of LED sources. Competition is driving down cost, causing some distributors to eliminate in-house lighting expertise at a time when they need it to compete successfully in a category that is becoming increasingly solid state and digital. And new players and alternate distribution channels are challenging the distributor’s traditional role in supply.

How significant are these challenges, what are their likely impacts, and how will successful distributors not only survive, but thrive, in a solid-state lighting world?

DiLouie: At the Strategies in Light conference, you sounded an alarm for distribution that solid-state lighting represents disruption to today’s business as usual—a short-term retrofit opportunity and a long-term threat. In a nutshell, how do you specifically see LED technology being disruptive both to the lighting industry and electrical distribution today, and a threat in the future?

Brown: SSL is both a classically disruptive new technology, but also a destructive technology. MRO lamp business is going away—it’s only a question of when, not if. And it’s not so much LED technology but the combination of LED and the integration of smart lighting that becomes a threat to both the traditional lighting industry in general and distribution in particular. With Apple, Google, Cisco, Intel, Oracle, Qualcomm, etc. now touching our business, who will be specifying and selling the next generation of smart SSL products?

How does distribution prepare to compete when we don’t know who we will be competing with, what new technical skills will be needed to compete? And fundamentally, how does distribution stay relevant to its clients if it is competing with technology gorillas who may have entirely different business models?

DiLouie: So the opportunity solid-state lighting offers is replacement of conventional lighting products in existing buildings. The tradeoff is the long life of LED sources means fewer lamps will be sold. Meanwhile, solid-state lighting is attracting new players that may not sell through the traditional lighting and electrical distribution channel. What can electrical distributors do to prepare for and mitigate the impact, particularly if the timing and scope of change aren’t clear?

Brown: First, distributors must figure out how to stay relevant to their clients in the age of Illumigeddon. Second, distributors have to stay abreast of new lighting technologies and the new players in lighting, and figure out how to become relevant and necessary to them.

DiLouie: You bring up a related issue, which is that solid-state lighting is shaking up the traditional lighting manufacturing business. Distributors are now faced with many new suppliers they will have to qualify. How would you recommend distributors qualify new suppliers? What are the key components of this evaluation?

Brown: Standard common sense criteria—reputation of the vendor, quality of the product, personal comfort with the company representatives, and all the other traditional lighting industry issues, such as terms, policies, new business opportunities. But SSL brings additional digging: UL listing, LM79, performance warranties, product availability, inventory management, return policies for old-generation product and more.

DiLouie: Suppliers are bringing new products to the market, which also require qualification. Complicating things is shorter product cycles than have traditionally held true in the lighting industry. How should distributors qualify new products than are different from traditional products, and how should they adapt their business practices to shorter product cycles?

Brown: Same answer as your last question, but I’d add to that literally testing new product, comparing performance and benefits to competitive product, understanding and insisting on future-proofed product, and again managing inventory to ensure that distributors don’t get stuck with devalued earlier generation product.

Bottom line, SSL and smart lighting are the new game in lighting, and distribution has the challenge to learn a new language, improve technical skills, create new business alliances, innovate and stay relevant to both clients and vendors.

DiLouie: In a generic sense, what core capabilities and value does a good distributor offer the customer that can’t be easily displaced? Value they could enhance to remain competitive in an SSL world?

Brown: Let me turn your question around. A good distributor is just that—a good distributor, of which there are hundreds, most indistinguishable from each other. A great distributor, on the other hand—which everyone should aspire to become—would be an indispensable partner of its clients.

A great distributor is a resource, not just for product but technical information, solutions, service, industry knowledge beyond SSL and proactive recommendations on efficiency in general. And a great distributor is going to have relationships with great manufacturers, reps, designers and other solution providers in the lighting and efficiency equation.

And finally, a word about personal relationships. Know your client personally. Knowing their wants and needs may sound old school, but it’s more important now than ever, as clients are going to be faced with decisions about their existing business relationships unique to SSL and smart lighting in the age of Illumigeddon.

DiLouie: A prevailing view of LED appears to be that a finished lighting product is an appliance. You use it, you throw it away. However, there is a growing emphasis on serviceability and standardization that supports that. Do you see a future upgrade market for distributors based on luminaires with serviceable (and upgradable) components such as light engines, optics and drivers?

Brown: Possibly, but more likely to happen if the distributor can offer the maintenance/retrofit service itself as an additional value-added solution.

DiLouie: Commensurate with the LED revolution has been a revolution in lighting control. Many LED luminaires are dimmable as a standard feature, and the technology offers new dimensions of control such as color tuning, visible light communication and the Internet of Things. Many luminaire manufacturers are starting to offer luminaires and controls as integrated packages. While not as disruptive as LED–MRO business is not affected by it–control still presents new challenges to distributors. What are these challenges, and what can distributors do to lead the market?

Brown: Here is where distribution can take the lead and stay in the game with investment in a skilled, experienced controls team—inside and outside sales, project management, troubleshooting and tech support for installation contractors, system maintenance for their clients, etc. The biggest challenge in lighting controls may be staying on top of the new players and new technologies—color tuning, example, and finding the right product for their client’s specific application. Controls and smart Lighting offer new opportunities to offer new quality of light values and benefits to clients. Read Value Metrics for Better Lighting by Mark Rea, in which he proposes new metrics to communicate the true value of lighting.

DiLouie: You say LED is disruptive but that distributors that invest in education and innovation may continue to succeed. Lighting manufacturers are also being forced to innovate, and some are examining their business models. One idea that has been proposed has been selling Light as a Service. As lighting manufacturers explore new business models related to selling Light as a Service, how could the distributor fit into these models and profit from them?

Brown: Light as a Service is becoming a reality. Lighting will be the Trojan Horse of the Internet of Things—the Internet of Everything. The fact that Cisco was a keynote speaker at Strategies in Light this year gives us a clue where SSL is heading.

Today’s lighting distributor should be taking clues from today’s IT value-added resellers and system integrators. Lighting isn’t just about light anymore. It’s about control, it’s about information, it’s about finance, it’s about quality, it’s about efficiency. And lighting distribution needs to be informed and comfortable with a new language and new efficiency concepts and financial strategies in addition to new technology and new players.

DiLouie: What about Light as a Service models for distributors? Going into non-traditional business areas such as controls integration, maintaining the lighting system, upgrading, monitoring light levels, etc.? Do you see a similar opportunity for distributors–that they could position themselves, through in-house capability or alliances, as stewards of an installed lighting system to generate steady revenues? Are there any other opportunities beyond that?

Brown: Great question about a great challenge. This one is not easy to get one’s arms around, but I think it is an enormous opportunity. Think about selling light, not light bulbs. The challenge is figuring out who will do the selling of what will probably be a complex financial product.

The Chicken Little in me thinks that distributors’ best hope in this Light as a Service model is to introduce allies who can pull the package together for existing clients, and stay in the equation supplying product and servicing/maintaining the installation.

The unanswered question in my mind is what happens if/when lighting manufacturers partner with building management system providers, technology companies and financial solution providers in a combined smart lighting/Internet of Things package for the end user. Can distribution provide the value, beyond introducing their client, that will make distribution a necessary member of the equation in a new business model?

DiLouie: One view of technological innovation is that whatever disruption it brings, another technology will follow. However, for a majority of general lighting applications, the efficiency and capabilities of LED would make it very difficult to justify replacement based on today’s retrofit investment criteria. Imagine a new technology that offers similar performance as LED but for a fraction of the energy consumption. By that point, the watts are so low the cost savings may not be enough. Do you believe LED may be the last major lighting technology (based on traditional lighting economics), or do you believe distributors will be have future big upgrade opportunities after the LED conversion based on future lighting technologies?

Brown: I’d like to think there will be Lighting 3.0, but I’m more inclined to agree with Roland Haitz, a retired scientist at Agilent Technologies and creator of Haitz’s Law, which describes the exponential progress of SSL lighting. In a 2010 paper, Haitz writes, “Since Edison’s first installation of electrical over 130 years ago, the industry developed half a dozen new electricity-based lighting technologies, each improving efficacy, cost or quality of light. Over the next decade, SSL will approach the end of the efficacy ladder and meet or exceed the market’s need with respect to cost and quality. There will be little room left to justify the substantial investments needed to develop an alternative newer technology. The series of revolutions in lighting covering the entire history of mankind from campfire to candles to light bulbs to SSL will come to an end. The revolutions in lighting will be over!” While LED may be the “last light source,” however, Haitz adds, and I agree, the LED revolution itself is far from over as integrated solid-state lighting systems create new applications and markets.

DiLouie: Thanks for the though-provoking conversation, Chris. Is there anything else you’d like to add?

Brown: Only that Illumigeddon, the end of the traditional lighting industry, is upon us. Some lighting industry players may be out of business already, they just don’t know it yet. But there is great opportunity for those able and willing to invest capital, personal energy and time to carve a role for themselves in the age of SSL and smart lighting.

Follow Chris Brown on this topic more on Twitter at @illumigeddon.

author avatar
Craig DiLouie

Events

Lightovation – Dallas Market Center
IALD Enlighten Europe
IES 24 – The Lighting Conference
ArchLIGHT Summit
American Lighting Association Annual Conference
Click For More

Careers

Colonial Electric – Inside Sales -Remote.

 

 

 

Categories

Archives