Retail Observer

RETAILOBSERVER.COM MARCH 2014 48 A t this year's Consumer Electronics Show in Las Vegas, LED lighting was everywhere. On the heels of such successful smart products as Phillips Hue wireless lighting, which lets you control the color and status of Phillips LED light bulbs from your smart phone or tablet, manufacturers are rushing into the wireless LED category. For example, Belkin, Lumen, TCP, and others displayed wireless LED lighting kits at the show. Adding to LED's popularity is a bill that President Bush signed into law in 2007, which has been quietly phasing out incandescent bulbs since January of 2012 (with the 40-watt bulb phased out this January). The rise of the LED bulb is therefore inevitable, creating a great opportunity for independent retailers. "LED lighting represents a new opportunity for dealers in the consumer electronics category," says Wayne Ortner director of sales at Energy Squad, a company that aggregates energy efficient bulbs and green tech products under one roof for a complete solution. "They can go back and mine their previous customer list to offer something that's new and exciting. More importantly, they can offer a level of service on something most consumers are totally confused about." Why are consumers confused? For one, despite one-size fits all plug-and-play solutions like Hue, LED bulbs are far more precise compared with their inefficient brethren and have a wide variety of specifications that homeowners don't understand. While consumers are used to dealing with straightforward 60-watt incandescent bulbs, LED lighting presents more variables, like color temperature, beam angle, and lumen output. Just because a particular LED bulb fits the socket doesn't mean it's going to necessarily look good. By knowing the specs and how bulbs will interact with their surrounding environment, retailers can become the expert, eliminating both the guesswork and homework for the consumer. With its LED Diet, Energy Squad actually provides three levels of demo bags to its dealers that delineate LED bulb specs for them. The LED lighting professional can take the duffle bag to a client's home to show how different bulbs will work within their environment. No independent retailer would ever dream of doing such a thing with incandescent bulbs, which you can find at your local grocery store for peanuts. LED bulbs are harder to find at the right specifications, and they are way more expensive, which in fact has caused some pushback on Bush's initial bill. When I wrote this, USA Today had just reported that House Republicans have tried but failed to stop the incandescent phase-out, so they've focused instead on de-funding its enforcement. However, it's that extra cost where the opportunity lies for the independent retailer and dealer. It's not a hard sell, either. While bulbs cost way more up front, they last a lot longer—we're talking 15+ years. That's longer than the average person spends in his or her home before moving. As Ortner points out, your LED bulb may last longer than your home. "People get excited about changing their lighting when they see all the options they never knew existed—changing the color temperature, and depending on the bulb type, the beam pattern," says Ortner. "For example, replacing a directional bulb with something that is more like a 'flood' can make a huge difference and vice versa. We've seen clients start with an intention of retrofitting just the living room and ending up doing the whole house, and we've seen sales range everywhere from a couple hundred bucks to $50,000 or more." Retailers and dealers in the A/V channel are used to selling step-up product, and their understanding of how to recommend the best lighting option falls right into step with how they sell all their other categories. "We've found that just like every other category, there is good stuff and cheap stuff out there, but selling upscale, higher- performance products does yield better margins," says Ortner. While the smart bulb products have garnered a lot of attention recently, they have the same Achilles' heel any other stand-alone product would. "Imagine if none of the systems in a house could be integrated. You'd have separate controls for HVAC, entertainment, security, and lighting. That's not what customers want," says Ortner. "Further, if you're depending on your iPhone to control your lights, and realize as you're climbing into bed at night that you left it in the car, well that's not a happy ending." RO Jim Ristow Consumer Electronics Trends LET THERE BE ENERGY EFFICIENT, HIGH-MARGIN LIGHT! Jim Ristow is the executive vice president of consumer electronics for BrandSource, helping to establish it as one of the largest and most influential CE merchandising groups in the United States.

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