This article will focus on lighting and distribution, with more of a lean toward B2B, & the retrofit market. Over the past year, I have seen two well-known and respected lighting and distribution industry professionals nearly come to blows (though I think I see them grinning in this pic) over whether or not new advances in lighting will bring ILLUMIGEDDON or FORTUITY, and who will see the most benefit (new players, or just the old industry).
Chris Brown (@illumigeddon), and Bill Attardi (@wattardi) have sparked some great side conversations (just have a look at some of the comments in their articles) and debates. I think when you go through it all, a picture emerges: The one truth in this debate is that change is here for distributors, and there will be big winners and losers on both sides.
Don’t worry LED lighting, it’s not all your fault.
I don’t think we can put the blame entirely on LED lighting or other advanced “smart” technologies. The bomb was already built, and LED lighting is simply a catalyst. If I had to guess, I would say the World Wide Web, which gave everyone everywhere access to information (and the reach to disseminate it) across the entire planet is to blame for much of the turmoil. Let’s agree that the Web made Disintermediation a whole lot easier when everyone is playing with a whole deck.
What LED lighting and advance systems did is put a new and costly technical burden on an industry that had been well settled for decades. Advanced lighting systems create an ever-growing need for specialists, in an industry where many of the specialists were gone or semi-retired. So let’s ask a new question:
Who should distribute advanced lighting systems?
Right now it’s wide open. Full line distributors are doing it and lighting distributors are doing it, but manufacturers, reps, ESCOs, lighting maintenance companies, electrical contractors, HVAC contractors and “others” are doing it too! Why?
• Because the Web says they can.
• Because customers aren’t as loyal as they once were.
• Because the end user is used to the “whole channel” price and the more stops they can eliminate means better margin for them and a lower price for their clients.
• Because they are offering end user services including audit, design, finance, rebate assistance etc.
• Because there is factoring & available credit
• Because logistics are much easier than they used to be
• Because they are spending all of the time with the people writing the check, and they want to keep all of the profit.
• Because many manufacturers and users believe that they have a better technical understanding of the products and their application than most distributors do.
• Because they do not need to stock much, since many distributors aren’t doing that either
In other words…They are doing many things that most distributors don’t. And they COLLABORATE! It’s not an all or nothing scenario when they know their weaknesses and need to get the job done. How often do different distributors share their strengths and win? I have seen distributors with the same name, owned by the same parent company compete on projects!
Chris Brown introduced me to Dirk Beveridge’s book, Innovate! (innovate-book), which I bought immediately after I saw a video on the NAW site (see here) with him defining innovation as “the ability to lead customers to a better future for which they reward you.”
Are you doing that?
If the wonderful Bill Attardi, aka Captain Sunshine, was okay with my rant, I shall return for part two: “Blinded by the Light – Everybody Doing Everything”. If he hated it, or either way, you can follow my weekly blog at lednyc.com and our company twitter feed @GLI_SSL