Lighting category goes full circle

After spending several years working in the lighting category, HBT General Manager of Buying, Jody Vella, recently spoke with AHJ on the latest trends and challenges within this rapidly evolving sector.

During his time at Philips Lighting, Mr Vella said trends were initially all based around LEDs replacing halogen and incandescent globes, with suppliers transitioning from halogen and CFL to LED and its subsequent product ranges. These product ranges included LED filament globes for the decorative space, as well as LED globes that can change the colour temperature and transition from warm white to cool white with a simple flick of the light switch. 

However, it seems that LED filament globes are proving to be particularly popular currently, according to Mr Vella.

“You will often see these globes in cafes where there are no longer light fittings over the table. It is more the globe that has now become the decoration. Funnily enough, some suppliers are now going back to the old incandescent globe, so they have done a full circle. Decorative globes have now become the call out as opposed to the light fitting,” he said.

Although smart lighting is growing, it often presents as a rather confusing category to a lot of consumers. 

“The category can become complicated in the sense that most regular consumers simply do not walk into their homes and interact with one central computer which controls all aspects of their home’s operation via voice command. While this may be coming in the future, at this point in time consumers are still tied into using multiple operating systems for different aspects of their connected home.”

“Consumers are also very wary of the smart products they put into their homes because they worry their products may be tapped into. Philips, for one, are very security conscious and continually update their smart light app for Hue. In speaking with a lot of suppliers it is evident that they are very focused on security right now,” Mr Vella said.

As more players enter the smart lighting space, prices continue to moderate, however it can still be a costly project to upgrade lighting throughout the home, according to Mr Vella.

“Let’s say a customer wants to transfer all of their halogen, or even regular LED downlights to smart lighting, with each replacement globe costing approximately $60. That is a lot of money to invest when you have over 60 downlights throughout the house. It is a great system but expensive, which is why these upgrades usually occur room by room and in new builds where some efficiencies may be gained.”

“Lighting is still considered to be a grudge purchase by most consumers because it is a purchase that simply needs to be done if a globe blows. There is nothing sexy about lighting. Consumers might be loyal to a company but often they just go for the globe that is on special,” he said.

COVID sales

Electrical fittings, lights and accessories was yet another sector to achieve intense growth throughout the 2020 lockdowns, a growth that suppliers had no time to prepare or budget for, according to Mr Vella.

“The Melbourne lockdown also occurred in winter when the lights are on more and home offices need to be catered for. As a result, the sales of globes increased massively. As more lights were being used around the home there is no doubt that many consumers decided to upgrade their old halogen globes to LED, along with seeing old globes blowing thus causing them to invest in LED replacement globes. The increase in sales, coupled with the stress that COVID had on supply chains worldwide also caused problems with the supply of globes and associated products,” he said. 

Future sales forecasts also remain somewhat of an unknown, according to Mr Vella who said it is particularly precarious considering the phasing out of government assistance, including JobKeeper at the end of March.

“The fact is there is a lighting season, usually commencing with the ending of daylight savings through to October. While this means we will be heading into the strongest part of the year in relation to sales, like all things the great unknown is what the phasing out of JobKeeper will mean for the economy. Many suppliers have already conceded that this may have an adverse affect on retail sales,” Mr Vella said.

Category innovations

When looking at the electrical space as a whole, companies like Philips, Legrand and HPM continue to refine and evolve their product offers.

“When I joined Philips in 2016, there was continual evolution of the LED A shape globe. The earlier generations of LED globes only emitted light outwards from the top. However, as the product evolved and the LED chip became more efficient, light began to be beamed from more angles and soon an LED globe emitted 360 degrees of light,” Mr Vella said.

“Another evolution is LED’s transformation from plastic to glass. It was all about the size of the LED chip that would ensure it had more lumen, and efficient wattage. The efficiency of the chip improved so there were more lumens (brightness) whilst at the same time expending less energy.”

HBT General Manager of Buying, Jody Vella
HBT’s General Manager of Buying, Jody Vella.

“However, conversations with some suppliers have revealed that in their opinion LED’s development may have plateaued for the time being so consumers might not see the continual evolution and improvement that they were once seeing. Suppliers also indicated that the price of LED globes is likely to become cheaper over time as more players enter the market, and as a result we are likely to see evolution and innovation continue for some time yet,” Mr Vella said.

While product evolution had a positive influence on sector growth, this can cause problems when it comes to educating retailers on new product qualities, according to Mr Vella who said retailers consistently need to be educated on new technologies so any advancements are then easily understood by their customers.

“Consumer education can be implemented through the use of dedicated point of sale products, such as aisle fins. When I was at Philips, we would often use fins to ensure customers knew what to look for.  One side would detail the benefits of LED, and what the different technologies were and then on the other side we would detail the wattage equivalents of an LED globe versus a halogen one. The customer decision tree also assisted customers on what product to buy for a certain room and the appropriate colour temperature,” Mr Vella said.

Industry issues

While ensuring correct supply of products in the wake of COVID remains an ongoing issue, the wide variety of product standards has also become an industry wide issue within the electrical space.

“There are still a lot of imported products that do not adhere to the Australian standards. Consumers and retailers need to be wary of this. Retailers also need to be vigilant in only dealing with well-known and established suppliers” Mr Vella said.

“When looking at new players in the market, HBT has recently been dealing with Lusion Lighting which was established by two former Gerard Lighting employees. We have dealt with them for about two years and they are a really good supplier, based in Sydney, expanding their network with very high-quality products. The feedback from our members is they are very responsive and are one to watch out for.”

“In saying this the lighting sector is a crowded market place. While we understand retailers want to give their customers a choice, if you are in hardware with limited space you probably only need two players on the shelf for the standard globe range. But smart lighting is a whole different ball game and you will probably need a dedicated range within this space,” he said.

Looking into the year ahead Mr Vella said retailers need to remain educated on the type of products they sell to customers, particularly when it comes to assisting customers in the smart lighting space.

“Smart lighting is a product range that it is all encompassing. You can get indoor, outdoor or room specific products and it pays for customers to do their research on the category and on the available products especially if they are thinking about converting their entire house,” Mr Vella said.