As lighting technology and fixtures evolve, do the business models of lighting companies need to evolve with them? This is something I’ve been thinking about as we have been preparing this issue, our annual mega-look at the latest industry product offerings. The maturation of light sources and luminaires is evident, particularly over the past several years, as manufacturers and designers have grown more comfortable with solid-state lighting.
This year, we received more than 450 product submissions. As we reviewed all of them, there seemed to be a greater awareness on the part of manufacturers about the technical information that is now needed for LED-related lighting products, as evidenced in the more-detailed product literature that we saw this year. Ongoing communication with specifiers has certainly aided in recognition of the need for better coordination between sources, drivers, and control systems. And while there’s still much more to do, it does appear that manufacturers are remembering all of the ingredients that need to be considered as part of luminaire design—including optics and component compatibility along with resolution of technical issues such as flicker, dimming, and color rendering. New product offerings are once again being put forth as a complete package.
And yet, I can’t help but wonder if an analogous progress is occurring on the business side. It seems as though there is a substantial gap between the methods by which a fixture operates and the methods by which fixtures are introduced to market. Long supply chains and multiple vendors still appear to be the norm in the lighting market, and this multilayered procurement process has long been a hot topic in the industry because of the role that it plays in adding time and cost to the specification process.
Does the shift to solid-state lighting offer a possibility for streamlining the industry’s old-school methods? What are the new ways of developing, launching, and bringing products to market that the lighting industry should be considering? Are there examples from other industries that the lighting community should be looking at? How have the mergers and acquisitions that have reshaped the landscape over the past decade changed how the industry works, and what effect has this had on the overall lighting market? Is differentiation between large and small markets still relevant? How has the role of the lighting representative—independent and manufacturer specific—changed?
It doesn’t seem, as yet, that the business side of the lighting industry has evolved to a state where it is reflective of the current technological level of the goods that it produces and sells. Old models of R+D, purchasing, and delivery appear to be the norm. So, how can the business of lighting catch up?
There are signs that companies are challenging the status quo. Borrowing ideas from the semiconductor and electronics industries—markets that have served as a healthy, albeit painful at times, disruptor to lighting—companies are starting to take advantage of new ways of raising capital. One of these ways is by utilizing crowdfunding, which we discuss here. Changes in strategies such as this might offer a glimpse of what future business models could be.
A few years ago, a lighting industry veteran said to me, “Lighting is no longer about bending sheet metal around a source.” Never has that statement been more true. The industry has done an amazing job adjusting to solid-state lighting over the past decade. What remains to be seen is how other aspects of the industry will evolve and adapt. The starting point will be in answering this question: How will the business of lighting evolve, or will it just remain business as usual?
Elizabeth Donoff, Editor-in-Chief
edonoff@hanleywood.com
