Interview with LEDVANCE’s Sally Lee on Retail Lighting Trends

I recently had the pleasure of interviewing Sally Lee, LC, LEED Green Assoc., Market Segment Manager – Retail, LEDVANCE (formerly OSRAM SYLVANIA). The topic: trends in retail lighting. I’m happy to share her responses with you here. The interview informed an article I wrote for the February 2017 issue of tED Magazine.

DiLouie: How would you characterize retail facilities as a market for lighting? What types of applications and categories characterize this market?

Lee: Retail lighting is a topic I spend quite a bit of time understanding, and it’s one of the top two market segments for lighting. Overall the market was really flat in 2009. While it has improved year over year, specifically in retail there has been a certain latency as they’ve been working through what consumer shopping changes mean to store facilities, and making stores more agile. We are lucky that with lighting everyone can see improvements in the store environment, and we can easily dollarize lighting improvements because the energy and maintenance savings go straight to the bottom line. What’s trickiest within retail for distribution is their existing store fleet. It’s like they’re always making plans to scale new concepts they like for new construction back across their whole fleet – whether they’re actually able to or not.

DiLouie: What are the basic lighting requirements in a retail space, and how do they distinguish this market from other applications?

Lee: Shopping – and finding items – is a heads-up visual activity. Sightlines are really critical in retail environment because the act of shopping is a heads-up activity. Retail lighting always considers vertical (6’-0” AFF) and horizontal (3’-0” AFF) display planes. Retail lighting varies greatly depending on the type of store, the brand’s goals, the nature of the displays, and budget for the lighting system. Depending on store design and merchandise displays, once a general light level is established, the accent/feature display and vertical/perimeter lighting systems can be determined. For a just noticeable difference, two to three times the general lighting is required.

We plan with store design for accent lighting to “follow the margin” and really draw attention to the latest merchandise. For the most dramatic and visually interesting displays, five to ten times the ambient level works. It’s important to show some constraint, though because if everything is accented, nothing really is! While all this is more easily taken care of on new construction projects, we find a lot of accent lighting in existing stores has become marginalized over many years. It’s mostly due to energy saving strategies and product elimination (lighting regulations), so it’s worthwhile to check lighting contrast to make sure accent lighting is doing its job. It’s one thing to report a large percentage of energy savings, but what makes the biggest difference is aligning the lighting with current project requirements and recommended practice.

DiLouie: What are the major recent trends in retail lighting, and how are they impacting lighting needs? What new opportunities for lighting are being created by these trends?

Lee:

Integrating lighting into store fixtures and architecture
Lighting is a great tool to capture and direct consumer attention. LED has proven useful here, offering new ways to accomplish this and generating attractive ROI. Where can’t you put these things? You can even wear them. The total package of tiny lights, highly controllable, beautiful white broad- spectrum illumination and – when well designed and thoughtfully documented for ongoing maintenance – help control O&M expense.

Multi-media displays

We are seeing a lot of big screens in retail now, and working them into the lighting design successfully is deliberate. Controlling veiling reflections from adjacent lighting, and balancing the amount and color of light they project is new, especially if the video stream has a lot of changing contrast. For starters, once you know the line of sight, position lighting so any screens don’t directly receive any of it.

Decorative lighting

Pendants are fun and effective store lighting elements, and the bigger and more opaque the shade materials are, the more carefully they need to be placed. Misapplied, they block valuable site lines for customers. With chandelier lamps and filament lamps now so often in direct view, the age-old conversation of glare vs. sparkle is really important. Especially in the midst of popular darker room surface finishes, check whether decorative lighting planned for ambiance is competing with the visual goal of evaluating the merchandise?

Daylighting
Daylight in retail – whether from store windows or skylights – isn’t fluorescent >5000K. While the access to views and the dynamic nature of daylight are interesting, beyond controlling glare we have balancing the amount and color (CCT) in these areas. Entering a west-facing store mid-sunny afternoon from outside takes some transitioning, and even if it’s not an electronics or grocery store, there could be room for more and perhaps cooler (CCT) lighting…the concept isn’t new but there are more practical equipment selections available today.

DiLouie: Are there any new markets that are developing in retail lighting, such as tunable-white lighting?

Lee: In retail, we are definitely going to be seeing interest in tunable white with LED lighting. Along with dimming control, tunable white is a very exciting idea to simply change-up – and even personalize – retail store environments. As we all get “our LED legs,” experience from mock-ups and beta projects, and really what’s been in the press from the first all-LED projects, is we are learning that LED lighting reads a little whiter and brighter than experience with conventional lighting would have us believe. There are many technical reasons for this, but tunable white and dimming are a great commissioning tool. Longer range, this will also prove valuable when we enter the maintenance stage of LED lighting.

DiLouie: What are three major aspects of this lighting market that electrical distributors need to become educated about to distinguish their expertise or otherwise take full advantage of selling opportunities?

Lee:

1. Turnkey
Traditionally for the retail segment, distribution had supplied to either – or both – new construction and facilities maintenance, while lighting maintenance and retrofit projects were negotiated separately. As LED lighting has been tested and become a best-fit solution to enhance store environments and bring profitable utility rebates and O&M savings to bear, retailers are looking more at turnkey projects in order to upgrade everything all at once. This elevates the lighting contractor’s influence. How well do you know these providers and how best to service them, especially when they’re the recipient of an RFP?

2. Ongoing coordination
Meaningful data changes the way we think and act. Communicate cost avoidance, including warranty savings, with your retailers. This helps them win internally. They’re always preparing for lighting projects, and arms them for access to available capital. Equally for supply chain, it’s important distribution communicate with manufacturing so product is available to ship when ordered. tED readers understand the discipline of inventory management and the churn with LED lighting, so keeping manufacturing in lock step is integral to high service levels, particularly as retailers consider solutions from the burgeoning “direct selling” model of newer LED suppliers.

3. Integrated lighting within store fixtures (& taking care of all of these items!)
To a retailer, a “store fixture” isn’t a luminaire, it’s a piece of furniture used to showcase product for sale. And today pretty much all of them are illuminated, but most would agree (if pressed) the lighting specifications are pretty loose and most retailers don’t know what lighting is actually in (various) case goods.

DiLouie: What challenges remain for LED lamps and luminaires in this market?

Lee: LED is the best thing that’s happened in retail lighting, not just because of its quality and flexibility, but because people are interested in LED. What remains looking forward is staying agile. We’ve got to integrate LED lighting on the sales floor with new consumer strategies, and also deal with inevitable product replacements that will come up, including how to go about adding additional light over time, when what you started with may no longer be offered. What’s that going to look like?

From a purely technical aspect, the lighting industry has got to work out LED product failure. LED lamp and luminaire mortality isn’t as straightforward as a light loss factor. And the more integrated the LED lighting becomes, maintenance- however deferred -is a bit like an elephant in the room. So far it’s all we have. Retailers stewarding store environments have a lot hinging on long, uneventful LED product lifetimes. Warranties are important, but so are conversations about planned maintenance.

Perhaps a safe example is refrigerated display lighting, one of the first fantastic opportunities for LED in retail, where merchandise vividly popped from behind closed glass freezer doors. Fast forward several years later, with utility incentives, energy and maintenance savings banked, with no other maintenance concern, LED lumen depreciation has happened and the glass freezer doors begin to look more like mirrors to consumers and shopping carts from within the bright grocery aisles. What’s the maintenance plan, and where does the budget come from? In grocery circles, this conversation is beginning to happen. For any LED lighting system, there are a lot of things to talk about and plan for. Ultimately, retail lighting is an asset, and you can’t manage what you don’t understand. In retail, with LED luminaire product lifetimes exceeding 10 years, maybe we’ll begin to see LED luminaires with asset tags, like HVAC equipment!

DiLouie: What kinds of retrofit opportunities are available that offer good selling opportunities to electrical distributors in retail applications? What should they look for in an existing building?

Lee: Utility lighting rebates are still the low hanging-fruit to generate new lighting opportunities with retailers – they’re especially helpful in generating one or two opportunities outside what’s been planned. Where retailers have already completed PAR lamp and downlight LED retrofits with < 1-year paybacks, look at those locations now with retrofit kits and TLEDs for the recessed and cove lights that haven’t been changed. Retailers seem more open now to the more volumetric effects of integrated LED luminaires where any accent lighting isn’t washed out, so in addition to retrofit kits it’s a good time look at some options in a store environment. To the extent possible, skip any luminaire test installations, unless you’re actually installing the test inside a store. DiLouie: How should electrical distributors engage their customers on retail lighting projects? What is the process from determining owner needs to recommending a solution or finding the right product? Where can they add value and distinguish themselves from the competition?

Lee:

1. Get in the mode of thinking in terms of the overall store mix. Store lighting across a retailer’s portfolio is pretty curly. For lighting projects, most “as built” information available isn’t enough to execute new purchase orders without additional audits. They often have several different store designs (and names for them), and time and merchandising change things. They may have acquisition stores that are very different. With variability the norm, if it’s new business you’re developing, narrow in a few sites to audit and work on – you can short-list candidates based on immediate needs, available rebates, etc. Getting into their sites, then understanding and communicating what you find is when you’ll begin to gear.

2. If you’re needing to learn the ropes of retail lighting best practice, the greatest credential is keeping a pulse on the overall segment, watching for indications of what the market is doing, which is the pressure our customers are under. Take in a lighting course [like at our LIGHTPOINT® training center in our new Wilmington, MA headquarters] hosted by your lighting manufacturer succeeding in this segment. Another high ROI for your time this spring would be attending the SPECS Annual Conference (Orlando, FL 3/12-14) and/or PRSM Annual Conference (Dallas, TX 4/18-20), where you’ll learn alongside retailers. Distribution can also count on Lightfair’s line-up for a seminar or two on retail lighting, and IESNA is getting ready to publish the retail lighting recommended practice (RP-2) in the spring. Sales 101 still applies, though: Customers aren’t going to care how much you know until they know how much you care.

3. For projects with retailers, know their budget cycle. And know it’s always in flux. While energy projects have C-Suite attention with aggressive ROI, reality in the world of retail brick and mortar is the economy and quarterly performance, their brand, fickle consumers, IT investments to present a unified brand experience to their customer (“Omnichannel”), and – like a facility in any segment – budgets tend to shrink, and occasionally money shows up that has to be spent right away. Communicating energy savings is expected, but what else does a lighting investment bring to the table? Have you prepared all of the stakeholders – purchasing, facilities, energy/sustainability and store design – so your offering hovers at the top of the list?

DiLouie: What role can lighting controls play in retail spaces? What are the opportunities for distributors to incorporate controls into projects?

Lee: About the last place you’ll finding dimming has been on retail sales floors, so existing lighting controls are pretty basic. O&M savings from automated building controls are corporately understood, so any lighting project on the boards is worthwhile proposing on lighting controls, not to mention new energy code requirements. The right solution has to work for the store associates. Understanding turn-over is reality and can compromise any processes in place. These folks are not facilities managers…employee behavior is an exciting area for IoT because user interfaces can become very approachable. Think like an app, as in B to C vs. B to B.

DiLouie: What opportunities exist for using lighting to communicate with customers and generate analytics?

Lee: The IoT play within retail sales floor lighting is very interesting. Today it is established the real estate of lighting equipment provides the right proximity to serve as a platform for consumer monitoring and communication, not to mention valuable control and data about energy use intensity and equipment management. Operational savings and connectivity are being worked out, as are the creation of new revenue streams for retailers with this capability. Ultimately it’s going to fall to whether consumers trust a Brand as to how much IoT investments will drive conversions. Zebra Technology published the “Global Shopping Survey” I read in 2015 that, on the heels of some cybersecurity issues, only 38% of consumers trust retailers to protect their personal information, compared to 62% in healthcare and 49% in banking. Consumer confidence has to be at the center of any retailer’s campaign.

DiLouie: If you could tell all electrical distributors just one thing about today’s retail lighting market, what would it be?

Lee: It always pays to know your market, but in the end retailers don’t care how much you know until they know how much you care. Lighting is evolving rapidly, and any lighting decision has to be integrated with the brand which requires ongoing coordination. Each of our decision makers are totally pressed for time and are expected to perform multiple job functions. They don’t want to be called on just to be shown a new product if the rep doesn’t know how, where or why it will work for them.

DiLouie: Is there anything else you’d like to add about this topic?

Lee: Distribution, as a profession, excels at supply chain. It’s interesting that brick and mortar retail is working so hard and investing so much in this area!

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