CONNECTING THE STRENGTHS BY CHRIS BROWN So, we may or may not be approaching ILLUMIGEDDON @illumigeddon, or the end of the traditional lighting industry as we have known it. But what if we are approaching it? Not the end of the world, and maybe a good thing for a stodgy old industry. The new business model(s) that will result from the Disruption created by SSL and Smart Lighting will require some dramatic shifts in Lighting Distributor thinking and planning. Those who are up to the challenge of innovating and reinventing their businesses to survive and thrive, have a great base of strengths to build on. The following list is certainly not all-inclusive, but provides an overview of some of the key characteristics of companies that will adapt to the new realities.

1. Relationships – manufacturers, manufacturers reps, contractors, specifiers, designers, architects, and END-USER CUSTOMERS
2. Integral part of the manufacturer’s selling, engineering, service and order entry process
3. Knowledgeable, Experienced, Personable Teams
4. Credit/Financial Support/Payment Terms
5. Product Availability: Inventory in Stock/Staging/Special Handling/ Delivery/Return Policies
6. Purchasing power: National Chains or Buying Groups
7. Broad (length and depth) product offerings
8. Electrical, Lighting, Technical and Technological Expertise
9. On-line and In-Person Customer
10. Competitive pricing thru bid process
11. Discretionary business
12. Value-added services….audits, rebate management, routine maintenance, data collection and analysis etc.
13. Trade Organization Memberships and Benefits (NAED, NAILD, NAW, IESNA, etc.)
14. Marketing / Buying Groups: AD, IMARK
15. Marketing programs / trade shows
16. Local market knowledge – STREET SMARTS

Lighting Distribution has been and is a vital, dynamic, passionate player in the Traditional Lighting Industry business model. Our challenges are to stay relevant to our clients in the age of SSL Disruption, and to become relevant for the new Technology Gorillas and others who come into our industry. Can Disintermediation be made unacceptable and painful to the Disintermediators? Can Lighting Distribution quickly gain the technological expertise needed to compete in the coming era of Smart Solid State Lighting?

LED lamps are quickly becoming commodity products. And while we are nowhere near socket saturation, as the MRO market shrinks, how do we keep Amazon, Alibaba and other Internet Goliaths away from ‘our’ sockets? These aren’t our only or maybe even our most significant challenges. But this is where Captain Sunshine shines with his view of Fortuity, which I share (with some qualifications). More on that to come. Now over to the Captain…..he tells me his next blog will be on the Necessary New Strengths that Lighting Distributors must develop to compete in the Smart Lighting Industry. Stay tuned……

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  1. David Gordon says:

    Chris – much of the list looks like “traditional” distribution. To excel in this space will also take a commitment to inquisitiveness as there are so many suppliers in the marketplace, the ability to market within your marketplace to generate demand / create awareness of products and customer benefits as well as to “create” demand and training of customers, influencers and your sales team.

    Another important area is developing your sales organization (and sales data collection methods) to find out where the business is … and it’s not always at the contractor level and hence out for bid.

    Consider these –
    I had an email conversation with an LED manufacturer this weekend that is selling PoE lighting systems through IT departments and using VARs that are in the IT space. I’ve also talked to a company that has LEDs with wifi that is selling through telecoms. And then, going to the other side (less technical) there was an article in Supply House Times (publication focused on plumbing distributors) mentioning 2 buying groups that are focusing on showrooms and are actively expanding the lighting side of their business (recruiting lighting only showrooms, lighting manufacturers to join).

    The market is changing as manufacturers seek to control their destiny and entities in other industries see the LED opportunity.

  1. […] the strengths of the traditional distributor in the electrical industry: CONNECTING THE STRENGTHS. Hard for me to admit it but he knows what he’s talking about. I even asked him for what he thinks […]

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