Technology Adoption Life Cycle Chasm, Part Two by Bill Attardi - Energy Watch News

Technology Adoption Life Cycle Chasm, Part Two by Bill Attardi

High Tech Life 3
Ok, where are we? From my last blog: Consumer acceptance, growth and business success can only happen when we cross the CHASM into the mainstream majority markets of 65-70%. If that does not happen, you have nothing. Now I’m not talking about the CHASM between the early market and the laggards. That’s not a chasm, that’s a thermodynamic black hole. I have high school buddies that have a flip phone for emergency use ONLY! Try telling them that only 10% of a phone is now used as a phone…

Early Majority: The Pragmatists
1. Accepted leaders of the late majority who only follow when the early majority buy-in
2. The Pragmatists are not pioneers, they want the early market players “to debug” the high-tech product before they buy-in
3. They look to make incremental, measurable, predictable progress to reach a comfort level
4. They manage risk very closely…..receptive to case studies / testimonials to determine how others have fared
5. Increased productivity drives their decisions but natural prudence and budget restrictions keep them cautious
6. They are hard to win over but are very loyal once won
7. New entrants have a hard time selling to Pragmatists because they communicate vertically (B2B)…..references and relationships are very important to them, they prefer buying from established businesses
8. However, the good news for new entrants is once they earn their way, Pragmatists tend to be very loyal and even go out of their way to help start-ups succeed
9. A few driving forces that cause Pragmatists to continue to buy: standardization, verified quality of the product, infrastructure of support, systems interface, reliability of the service, value-added resellers (VAR)
10. They tend to depend on existing distribution relationships as a single point of control
11. Must be convinced that once they make the decision to buy-in, it’s for the long haul
12. They love and encourage competition to keep costs down, to provide alternatives, to allow for the purge of the market, prefer to work with the surviving established proven market leaders

We have crossed the CHASM. Here’s how I know:
• in 2011 LED lamps were 5% of the lamp market; in 2014 it jumped to 30.7%
• in 2011 LED Outdoor fixtures were 26% of the fixture market; in 2014 it jumped to 54%
• in 2011 LED Indoor fixtures was 9% ; in 2014 it was 35%

Lamp sales by major category have been posted on the last page (Monthly Special Feature) of the September monthly summary:
A complete breakdown in LED lamps and fixtures sales will be posted in the October monthly summary…. Stay tuned.

As I previously stated, understanding the mainstream market is complex and requires real marketing acumen. The Smart Lighting Industry has many expert players in this field and it is working. The early majority is buying-in in great numbers and my prognostication is that the majority (over 50%) of all lighting in all categories will be SSL by the end of next year. That means we are moving through the Total Adoption Life Cycle rapidly and we are reaching the late majority as we speak.

Late Majority: The Conservatives
1. Conservatives are a hard sell because they just do not like discontinuous innovation. Once they find something that works for them, they want to stick to it. Change and high-tech products cause them angst
2. They want to stay on par with the rest of the world but tend to get stung by the new technologies: unfortunately they have a hard time understanding how high-tech products work and the result is they do not work for them, at least initially
3. They like to wait until sheer volume of sales encourages discounted prices
4. Reaching a certain comfort level is most important to Conservatives
5. Post-purchase service is extremely critical to encourage continuing loyalty even if they are unwilling to pay for this service
6. Looking for the presence of a strong infrastructure of support to help them get thru the war zone
7. They rely, even depend, on strong distribution channels to provide a “product systems solution” to help them upgrade to something too daunting to handle by themselves
8. Conservatives greatly extend the market for high-tech products that are no longer state-of-the-art
9. You know you are in the MATURE stage of a product life cycle when the Conservatives buy-in in great numbers

The LED Outdoor Lighting Fixture market has already crossed into the late majority. Just look around the world and see the many cities that are upgrading their street lighting to LED; more and more Sports Arenas; bridges, roadways, landscape lighting, security applications, exterior floodlighting, on and on, all upgrading to LED. Could grow to 80% by the end of next year. The Laggards and my high school buddies will be the only ones left standing. Conservatives are very cautious, and as we see, don’t like change very much but as prices continue to be cost competitive, they will join the parade and be very happy they did.

This is where I come down on my debate with Chicken Little Chris Brown. Disintermediation will never happen. If we agree on the thinking and buying habits of both mainstream majority markets (70% in total), the early majority poses too many needs manufacturers are just not equipped to serve and they surely don’t want to serve the late majority directly with all their demands. As Governor Christie would say: FUGGEDDABOUDIT! Manufacturers should focus on what they do best: to continue to innovate and make the most advanced high-tech products possible and market research the innovators and early adopters to keep the progress going forward. FORTUITY is being in the right place at the right time and the established distribution channels are already there and I truly believe, are in the best position to continue to serve both mainstream markets for lighting……it is just too important a product category to abandon. Don’t just sit there, make something happen…

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2 comments on “Technology Adoption Life Cycle Chasm, Part Two by Bill Attardi

  1. Peter Brown says:

    Not sure source of your adoption % numbers – the link below to recent DOE report shows a much lower penetration. Perhaps the difference is new construction only vs overall market installed base?


  2. BillAttardi says:

    It goes without saying, Bill …
    … that I very much enjoy reading your provocative articles. I believe they stimulate thinking, and keeping brain cells lubricated and firing for me is very important. As an OEM supplier, I can tell you that your analysis of the pragmatists, conservatives, and those that fall in between is indeed a very provocative and interesting analysis.

    We have customers that fit into every category; and frankly, it’s very interesting to watch. I believe the marketplace is changing rapidly and there is so much going on that it’s hard to figure out whether it’s more important to be a pragmatics or conservative. Our business supplying metal housings for fluorescents has definitely plateaued.

    At the same time, there are some of our customers that are really very successful at promoting fluorescents while most of the public companies are becoming less and less reactive to their fluorescent lighting business and more committed to the new LED technologies. I don’t know how you find time to do everything that you are doing, but as the saying goes, “If you want anything done, ask a busy person.”

    Warm regards,
    A.L.P. Lighting Components, Inc.

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