Had an interesting discussion today with a distributor regarding lighting / lamp manufacturers which created the thought of “what is the future of these companies?”
For clarity, the discussed manufacturer marketplace is:
- Philips, Sylvania and GE being companies that are lamp and fixture companies. And, it appears, that all 3 are attempting to figure out what their model is / should be for the future.
Then there is Cooper, Acuity, Hubbell, Juno, Cree and others that are traditionally fixture lines (and yes, some of Philips’ lines falls into here – Lightolier, Thomas Lighting, etc) and smaller lines like Rab, Atlas, Topaz Lighting and others or LED companies like Digital Lumens, **Start Lighting** and Lunera (essentially think of these lines as “who?”)
- and we can’t forget companies like TCP (known primarily for lamps but now also into fixtures), Eiko, Satco and others that are more on the lamp side of the business.
And LEDs, plus consolidation, have muddied the waters.
The discussion then turned to perhaps a more philosophical / blue ocean discussion … what will LEDs mean to lighting supplier “relationships” for the future?
- With LEDs growing, does this diminish the need for lamp replacements? Is lamp replacements a profitable, and large enough, segment of the market for many distributors?
- With LEDs growing, and if a distributor focused on new construction and retrofits, and minimally on the replacement / MRO market, do they need a “major” lamp line (Philips, Sylvania, GE) or could they do very well with fixture lines and “tier 2/3” lamp suppliers?
- Given that LEDs are 35%+ of fixture manufacturer sales, the component suppliers are now different with LED components being available from a multitude of suppliers. Does this make the “big 3” less relevant longer-term?
- What does it mean for someone like Cooper Lighting and the potential leverage they may have given their ownership by Eaton and a potential relationship (lead generator) with Eaton’s ESCO business?
- While many talked that Sylvania should have / could purchase Acuity, is Acuity in the drivers seat now?
- Will the lamp “big 3” that we remember of 2009 be of important in 2019 (5 years from now)? Will the drive to “control the hole” in the ceiling and cannibalize existing business (which was necessary given the technology change) result in changing corporate dynamics in the lighting industry? And what does this mean for distributor relationships? The companies that they align with? Have they staff and train their organizations and the resultant impact on profitability?
Will being a “solution / system” sell and offering the fixture, lamp source and dimming control system be what your customers want? Being locked into a system longer-term? Will designers recommend this? Will purchasing accept this?
And, for a distributor, could the answer be “just align with whichever fixture manufacturers have the best salespeople / agents in your territory” (unless you train your own) and consider these relationships “transactional?”
Just some food for thought and a reminder that the events of yesterday do not have to be the precursor for today nor a suggestion for tomorrow’s strategies. The market, especially the lighting market, is changing rapidly.
What are your thoughts on the future of the “big 3 lamp lines”?