Bright Idea: HTSA Introduces Lighting Initiative at Fall 2017 Conference
With Tom Doherty in attendance, the annual Home Technology Specialists of America (HTSA) Fall conference had a charged message for the crowd of 250-plus in the room, the CI industry is ready for lighting disruption, and HTSA is prepared to be that champion.
Shining Light on a Dark Market
Recently, Doherty joined HTSA to as a Special Projects Manager, a term that ambiguously noted he was involved with special projects and "new growth initiatives." What materialized, was an air-tight presentation on the foundation for a new play in the lighting industry, an industry that Doherty says operates under an entirely different set of rules despite being so closely related to the modern age of CI.
"What I'm doing, or rather what I was doing before I joined here was disruptive because the lighting industry is not at all like our industry," Doherty said. "They have their own kind of food chain and their own way to distribute. There's no such thing as a dealer. The electrician buys from the distributors, who buy from manufacturers, but the agency drives and dictates how the market works. Those agency reps kind of act like a dealer, but they have over 100 lines, not just one or two, and they have a staff of 50 to 90 people, not just five or six."
Doherty then notes that on gigantic pain of this ecosystem is the pricing. Many lights - especially high-spec - don't have an MSRP, are typically made-to-order, and can vary based on region. However, the most significant friction came from lighting companies not understanding how the dealers operate. He parallels it to the early days before CEDIA, where he convinced major manufacturers to sell directly to dealers instead of exclusively to retailers, despite the CI channel being so new.
"It took them a while to understand that we are reaching a customer that their current market share just isn't reaching," Doherty said. "The first companies that we converted back in the day we're the small companies that were innovative and nimble, like Sonance, like Niles, like Audio Access, like Runco. I started looking for those same type of companies that were high performance and that I could talk to the owner directly, who in turn could understand exactly what I was saying."
The small list of initial companies hit all those marks, are "best in class, but more importantly didn't overlap in markets or price points." Currently, the list includes Q-Tran, Inc., Lightology (including Edge Lighting and Pure Lighting), DMF Lighting, and Ketra. Doherty's compelling argument was that HTSA was in a position to connect them with a market space that wouldn't disrupt their current operations and not cause any drama - a situation he found himself in "25 years ago during the early phases of CEDIA."
"I'm motivated to bring lighting, as a category, to the channel," Doherty said. "I will be known for that."
Less A-Ha Moment, More Solving a Pain Point
Theirs no denying the impact lighting can make, especially when Jon Robbins points to just how big the lighting industry said. He explains that the CI industry feels essential as a $14 billion industry, but lighting "dwarves that by two-and-a-half-times," or roughly $35 billion. The HTSA President went on to explain the miscommunication between the two booming industries, noting that beyond picking out decorative lighting, consumers are generally "unaware of the level of lighting," and content with low-grade fixtures in $1 million homes.
"The big thing is, Tom and I do not take lightly our responsibility to our members to put them in a position for success," Robbins said. "This is not just a business you can jump into without a firm knowledge of what it looks like and understanding how it operates. And that's just one part, the next part is the go-to-market. This business, if dealers don't understand it, can be very damaging to this industry. It's a whole different model."
"On one hand, it's really exciting, on the other hand, there's a big level of responsibility," he added. "The real win is we are getting our members in the process early. There's a natural progression when architects, builders, and designers know (dealers) are doing the lights too. You start early in the talk and get the bids. It's not just about selling lights; it's about what it does for your entire business."
Some of that education and vernacular is missing based on experience, or lack thereof. Doherty knows that many dealers in the industry just aren't ready to begin selling lights right now. He notes CRI, different dimmer drivers, color temperatures, color trims, color baffles, ceiling differences, IC-rating, and lumen outputs as just a few of the elements keeping dealers from just diving right into lighting.
"There's less room for error," Doherty said."You can fudge an AV room and bounce back from that, but if you weren't paying attention to your plans, lighting in a spec-rate world are built-to-order and kind of hard to return. All of the sudden you have 150 to 300 different options, over 50 or 100 different fixtures in a house. There's a lot going on that is so easy to mess up. We are ready to bring a focus to (HTSA) with the correct partners so they can make money off it and keep the money in their pocket."
And those frustrations, combined with a lack of resources - or even a place to find the resources - has lead to headaches.
"Believe it or not, architects, builders, and even the clients know about home automation, and they aren't excited about it anymore," Doherty said. "But now, I'm in invited on projects way earlier. HTSA members are going to be at an advantage because they will have a leg up."