By Scott Costa, Publisher, tED magazine
For the first time since I became publisher at tED magazine, I rented booth space at the NECA Show. It gave me the opportunity to talk with contractors who visited my space, along with the opportunity to talk with the other exhibitors at the show.
It also gave me the opportunity to observe. One of the things that I find extremely important at tED magazine (and really journalism overall) is having the ability to hold up a mirror and report on the reflection. No filters, no agenda. Just report what you see. So, here’s what I saw.
The Moscone Center opened for attendees at noon on Sunday, and the contractors came flooding in. Someone told me it was a record attendance at this year’s event. While I haven’t confirmed that, there is really no need. It was extremely crowded. And that crowd was very active, checking out all of the exhibits and technical workshops.
I wanted to keep an eye on the LowesForPros booth, which was in a location that should draw a nice sized crowd. It didn’t. I went past the booth on a number of occasions each day of the show, and it never had more than one person checking out what the DIY retailer has to offer for the professional contractor. The booth was set up well, and prominently displayed the features that are a threat to our traditional supply chain. There were signs for easy to use credit, the ability to deliver to the professional’s jobsite and the availability of the Lowe’s website for contractors to use for their e-commerce. Lowe’s has some interesting opportunities for the contractor market, but I never saw any overwhelming support for LowesForPros at the NECA Show.
But the one thing that did catch my eye is that lighting is definitely popular. Like insects attracted to, well, lights, it turns out contractors are also attracted to everything that is out there in the lighting industry. It didn’t matter if the booths were extremely large, just large or small. If it contained lighting products, contractors were checking it out, asking a lot of questions and leaving behind contact information. That part concerned me a little, the part about contractors leaving behind information, because we have been looking into disintermediation at tED magazine and tedmag.com for a while, and we are continuing to do so. Make sure you are checking out those stories as they are published and posted in the future.
But I thought I should look into the situation further when I returned home from the NECA Show. If suppliers begin selling direct to the end users, how much money is at stake? It is really difficult to pin down a specific number, so I had to narrow my investigating down to simply retro-fit lighting. Those numbers alone are pretty staggering.
According to the Department of Energy, LED sales will increase from about 3% of the market in 2013 to 48% of the market in 2020. And then it will increase to around 84% in 2030. Part of the reason why the percentage is so low right now is the costs of LED lighting are still higher than the competition. But we all know that is changing, so the percentages in 2020 and 2030 will probably end up higher than 48% in four years and 84% in 14 years. Also, I found this part of the report interesting. “Much of this growth will occur first in the outdoor sector, with nearly the entire sector shifting to LEDs by 2025.”
The DoE report also shows that just four years from now, its is forecasting LED lamps will have 83% of the market share in commercial lighting and 77% of the market share in the industrial sector. LED luminaires will be about 35% of the commercial market and 41% of the industrial market. That’s interesting because right now that percentage is around 4%, meaning there’s a lot of money to be made in both markets, both short-term and long-term.
Lastly, the DoE report looked at street lighting, which was interesting for LED/energy efficient lighting. A number of cities, including Los Angeles and New York, have either changed to LED lighting or plan to change in the next 18 months. In fact, the DOE says that half of the streetlights in the country will be LED by the end of 2017. The price tag for those sales alone: $10.2 billion.
We are going to continue our look at lighting and traditional distribution over the next few months. What can you do to provide value to your suppliers and those professional contractors who are not yet interested in what the DIY chains have to offer? How can you train your staff to make sure they know what lighting is needed in every situation? What are you doing to work with your lighting suppliers to keep the traditional supply chain strong?
If you have any thoughts, we would love to hear from you. You can e-mail me directly at email@example.com or leave a comment below.
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