An Enlightening Ride: Part I

When Mike Connors and several other founders/investors first launched Bulbs.com (www.bulbs.com) in 1999, fluorescent, HID, and CFL technology were dominant, the internet was still in its infancy, and the lighting sales process was more conventional. Times have definitely changed.

“We started out as an online B2B venue with 2-3 people working the phones to answer questions or make deals,” recalled Connors of the initial introduction of Worcester, Mass.-based Bulbs.com, an online replacement lighting supplier which has since grown to service 200,000 commercial and industrial businesses in more than 300,000 locations nationwide using the site and web search strategies along with support from nearly two dozen inside salespeople to sell to commercial verticals including property managers, retailers, hotels, restaurants, and dozens of other segments.

In Part 1 of lightED’s interview with the lighting industry veteran, Connors shares thoughts on how lighting sales have changed over the past two decades, challenges and opportunities for distributors, and what the industry may hold in store in the years ahead.

lightED: Over the nearly 20 years that you’ve been in the industry, what do you feel has changed the most when it comes to selling lighting?
Connors: Years back, lighting was sold primarily by wattage. Lamps experienced small improvements in efficacy over the years, but there was actually little material change in the technology. With today’s LEDs, however, there’s been a complete change in nomenclature, performance attributes, etc. and we’ve all had to relearn that it’s about CRI, lumens, and other factors that, as shoppers, we didn’t necessarily have to understand when we bought our lighting at DIY stores or supermarkets. Back then, manufacturers were so engrained in traditional distribution channels that it was hard to get them to engage in an online format like ours; there was also a belief that the internet was all about chat rooms and AOL accounts and that companies with shopping carts were very disruptive. I’d say that what’s changed the most in the past two decades is the adoption of the internet as a legitimate purchase platform for businesses selling everything from MRO supplies to the most complicated capital equipment. Also, the evolution of LED technology has been significant and represents a dramatic change for anyone who sells or uses lighting because it’s more complex and confusing.

lightED: What are some of the biggest challenges you’ve faced relative to selling lighting over the course of your company’s life?
Connors: Getting an online business off the ground at that point in time – 19 years ago – was an entrepreneurial challenge, and it took us several years to become profitable. Today, the challenge revolves around the dynamic of LEDs, for many reasons. Among those, the LED marketplace has attracted more manufacturing competitors – from all over the world – than ever before, based on its lower barriers to entry; this has not only increased the pressure to produce next-generation products but has subsequently driven significant price erosion as well. Within distribution, the pressure to move LED inventory is a huge challenge and has changed operating metrics for distributors. In addition, the evolution of LED technology, in tandem with the growth of the internet, has changed the purchase process such that today, a lot more research is done by shoppers on the internet prior to making a purchase. Our new customers didn’t have a high degree of loyalty to any brick and mortar sales rep or distributor. Based on our experience, we frequently find that the most senior and skilled purchasing people at commercial businesses aren’t usually the ones buying MRO supplies; that responsibility is typically relegated to a newer or more junior person who doesn’t need a relationship to buy anything – they just use the internet. They’re not waiting for someone to walk through the door to talk to them about lighting. At Bulbs.com, we’re acquiring 1,500 active new commercial customers a month using the web search knowledge we’ve developed over several years, and our sales team can barely keep up.

lightED: What do you see coming this year for both your company and the lighting industry?
Connors: I think that the adoption of LEDs will continue to progress and that the technology will get better and better. We now have ‘LED filament’ bulbs in our Bulbs.com warehouse that have no heat sink at the bottom and look exactly like 60-watt frosted incandescents… perhaps we’re going ‘back to the future!’ We process rebates for clients, which will remain a big driver as the nation’s utilities continue to push customers towards more efficient lighting. I also think that smart lighting and the IoT will continue coming on like a freight train as LED, fixture, and control companies explore wireless platforms like Wi-Fi, Zigbee, Bluetooth, etc. as well as the concept of how lighting can promote and further connectivity. Finally, though organic LEDs are still in their infancy, we’ll continue to see developments there. All of the aforementioned developments will move forward because there’s a market and appetite for these things by the consuming public.

In Part 2 of lightED’s interview with Connors on Monday, the lighting industry veteran shares thoughts on the industry threat posed by Amazon, some of the new and unexpected ways lighting sales may continue to evolve, and strategies for distributors.