Succeeding in retail today involves so much more than just having the right products. By Steven J. Parker, LC
The retail environment is evolving rapidly, and the changes predicted for the future require proactive measures. We already see a large number of malls across the country closing, losing their anchor stores and being repurposed for other applications. We live in a time where the largest hospitality company in the world (Airbnb) owns no property, the largest taxi company (Uber) owns no cars, and the largest media owner (Facebook) creates no content.
Devising a compelling reason to drive customers to the retailers will be key to success. I believe that the lighting retailer has a strong position in the market, both now and in the future, if they embrace technology — both in products and in the customer acquisition process. I also believe there has never been a more fun time to be in the industry; we have some really cool stuff available to us today! Smile, have fun, educate and brighten lives!
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“It is not the strongest of the species that survive or the most intelligent that survives. It is the one that is most adaptable to change.” —Charles Darwin
We have heard statistics that about 40 percent of the consumer base for lighting is regarding energy-efficient, and about half of that is for LED products and the other half is for compact/linear fluorescent. As the compact and linear fluorescent products start reaching their end of life, this will create additional opportunities for lighting showrooms. Does this mean that when every socket has an LED light source that the market is done? My view is, no. There will still be new control options and better-performing, smaller, and more efficient luminaires in our future.
When hockey legend Wayne Gretzky was asked what made him such a great hockey player, his response was: “I skate to where the puck is going to be, not where it has been.”
There are new tools that can be used to drive traffic to the retailer:
■ Geofencing & Geotargeting
■ SEO (Search Engine Optimization)
■ Boosting your SEO with Schema Markup — use it for more than just features
■ Eye tracking on shelving
■ Tracking throughout the facility
■ Proximity beacons
■ Retailers throttling wifi at their locations (limiting search speed and popping their ads while their website can be searched at full speed)
■ Facebook Exchange (FBX)
■ LinkedIn and other social media
■ Inbound and outbound marketing
■ Brick and click (both brick-and-mortar stores and online sales)
■ CRM (Customer Relationship Management) combined with Constant Contact, Mail Chimp, etc.
Three is also a new search trend used by customers where they enter what they are seeking followed by “near me now.” Are all of these options economically viable options for lighting retailers? Probably not, but some can be very useful.
Former President Harry S. Truman once said, “Not all readers are leaders but, all leaders are readers.” His statement still holds true. There are three books that I recommend to lighting retailers:
1. Michael Dart and Robin Lewis’s book Retail’s Seismic Shift – How to Shift Faster, Respond Better and Win Customer Loyalty
2. Daniel Priestley’s book Oversubscribed — How to Get People Lining Up to Do Business With You
3. Renée Mauborgne and W. Chan Kim’s book Blue Ocean Strategy — Creating New Market Space and Making the Competition Irrelevant
There is very similar and useful information in all three books regarding connecting to the customer. According to Michael Dart, retailers who will be successful in the future are those who offer engaging experience centers.
A customer who spends a bit of time combined with a bit of money at a lighting retailer will have gained improved quality of life. The reality is that most customers “do not know what they do not know.” Education is a powerful tool. Education/experience combined with entertainment is the ultimate secret weapon.
Entertainment can be as simple as making the showroom visit fun, or even offering a sensible (not expensive) drink or snack to shoppers. There is a dive shop in my area that boasts, “We sell fun!” Everyone who walks in the door is immediately approached and offered a cold bottle of water to enjoy. They do not try to sell the customer anything, just offer the bottle of water. Not only have they earned the reputation as the “go to” source for the latest in dive gear and instruction, they have also earned a reputation for being honest and fair.
The mission is to entertain and educate the customer until they are totally comfortable with the idea of buying from you. Make the event all about them and be respectful of their time. I suggest an approach of letting the customer know what is available rather than trying to sell them something. This process will make them want to buy rather than pushing a sale.
There are some customers who make decisions on the spot, and others who go back and do research before re-contacting you or your team that they are ready to buy some of the awesome new lighting they saw at your event. Make sure your staff is prepared for both. You may also want to consider a no cost/no obligation home evaluation (this is not a lighting design — just a summary of what is possible in their home). Yes, this means driving to the customer’s home. Provide a sign-up list for receiving email newsletters and announcements of exciting new products, and always give them the option to “opt out.” Limit the information you provide to something of real value to them.
During the educational process, it is important to inform the customer that not all control systems and luminaires work well together. You and your team have spent countless hours in training and research to find the latest and best technology. Your team can match the luminaires with controls and vice versa. This is also a good time to mention your staff’s completion of educational programs through the American Lighting Association (ALA) as well as attendance at the Dallas Market. This type of educational experience is not something they can typically get from visiting a big box store or shopping online.
Build a database of clients (CRM systems are very inexpensive and easy to use) to keep track of the control systems and lighting they have installed. By doing so, the customer will have a far better experience and know that their business is important to you.
Redesign your customer acquisition process to develop a following that will channel them from suspect to prospect to customer to client. A suspect is a lead; a prospect may buy something from you, usually small; a customer may buy from you one or two times; but a client buys from you on a regular basis and sees you as their go-to source. You will make a lot more money from clients. Treating them as such, understanding them, and knowing where they are in the customer acquisition process is key.
One of my part-time jobs is facilitating a CEO Mastermind group as well as coaching about 30 CEOs with their businesses. It’s really no more difficult than herding cats and then teaching them to swim. I highly recommend getting involved with a Mastermind group or peer advisory council and meeting regularly. One of the key points is trying not to be all things to all people and focusing on the narrowest of niches. We focus on being the best in the world in a specific niche.
Now, you can change the size of the world you play in so that you truly can be the best and own a particular niche. Here is an example: Trying to be the largest lighting retailer in North America is unlikely, but becoming the largest lighting retailer of smart home lighting in Tampa, Florida is well within reach. The mission is to own a niche and become a recognized brand within it.
The next step is defining the customer and focusing on turning them into clients. In my previous article The Evolving Role of the Lighting Representative, I mentioned that the retailer and the rep have the same mission: selling lighting to people.
Be the Go-To Source
I recommend leveraging your relationships with the sales representatives to drive more retail sales. The reps can serve as a featured speaker for education/entertainment and may also be willing to share in the some of the costs or provide some sort of premium (small give-away) provided by one of their lines. The advantage of featuring the representative is that their presence creates a sense of urgency for the event and we all know people have FOMO (Fear of Missing Out).
If you say to your customer, “Come on down and see Lenny, he is our smart home expert and is here every day from 9 to 5; that’s not very compelling. However, if you tell your customer, “We are hosting a fun and educational evening highlighting the seven most-common mistakes homeowners make when integrating smart home products. The speaker is Mr. Mighty Milliwatt, a manufacturer’s representative and expert in the smart home. This is a limited event so please RSVP.” That is very persuasive to the consumer.
Additional themes for events include: Integrating Voice Controls in the Home; Green Lighting Manufactured with Renewable Materials; Human Centric Lighting; Color Control for Function, Fun, and Entertainment; Lighting for the Solar-Powered Home, and Lighting for Specific Areas (kitchen, media room, home office). These events can highlight a particular manufacturer or a new product. It is also possible to video the highlights of the program and feature them on the retailer’s website or social media. You may even wish to dabble outside of lighting and offer products such as power usage and monitoring equipment (check out products by Sense, Smappee, Neurio, Curb, Ecosime and Efergy).
Offer Perks That Make You Stand Out
Some retailers may also wish to offer a performance guarantee, such as “We guarantee that the products we provide you with will work together.”
Or retailers can commission the installation. A popular request among consumers today is “Do it for me.” People are willing to pay to have experts set things up and get them working. How many people never learned how to program a VCR but would have paid someone to show them how to do it? I remember the days of Blockbuster when customers would pay a fee for not rewinding their video rentals before returning them and instead having Blockbuster do it for them.
For those of us in the industry, setting up a lighting control system may not be especially challenging however, the customer may need help. I believe that offering this service could be both a money-making and sales opportunity for the retailer. While visiting the customer’s home, the expert could mention, “Wow, I see you take a lot of pride in your garden. Have you ever considered landscape lighting? It would really highlight your garden as well as make your house look so much better than others on this street.” Or “You have a beautiful dining room table! We have a new LED chandelier that would look fantastic over it. I am happy to send you a photo or, please come by the showroom, I would love to show it to you.”
Raise Your Profile
It is important for consumers to know about your business and there are economical ways to do it. The key is to focus on education rather than being about the sale. Local radio shows would love to have someone speak about the “smart” home of today. There are also local and regional newspapers and publications that would love to have a contributing article from your team. Blog, publish, speak, and podcast and have fun doing it!
Here are some additional ideas:
■ Create an “experience center” that is fun, cool and informative
■ Gamify purchases or referrals
■ Make your website a resource
■ Record videos and podcasts to introduce new items, share success stories, invite customers to go green, interview experts, interview happy customers
■ Create a digital magazine
■ Offer a Satisfaction Guarantee
■ Charge for upgrades and visits as they add new controls or luminaries. In most cases, an electrician is not interested in commissioning of the controls.
■ If you do not have your own team, partner with CEDIA members for installs and commissioning. Have them refer the lighting business back to you; they are not lighting experts, you are!
■ Become the Southwest Airlines of lighting retail
■ Conduct your own research by asking your reps to help you find the products you are seeking
■ Offer rewards for customers who save the most on their energy costs and interview them
Remember, customers are also evolving. They want to buy from people they feel really understand their lives. They care about the causes that the retailer and manufacturer supports to ensure that they are in alignment with their values. This is not as risky as long as the causes are to do good. I recommend that your website outlines the causes you support both in the community and nationally. Think environmental and social but, please, stay away from politics.
Know your customers and train your staff to know them. You may also wish to match up staff with similar age customers. For example:
Baby Boomers (born 1946-1964) want/need higher quality light and to be able to do the hobbies they love. They are scaling back on the size of their dwellings and replacing them with smaller, higher-end homes. Boomers consider connectivity as important as any other age group.
GenX (born 1965-1980) focus on raising children and helping them not become boomerangs. They seek good work-life balance and working from home and being entrepreneurial.
Millennials or Gen Y ( born 1977-1996) embrace technology, green causes & products, and experiences.
Gen Z (born 1996 and later) want less stuff. They witnessed their parents through the Recession and saw them buy too much, which created financial challenges. They are concerned about the social stance of brands.
So what does the future look like for lighting retailers? Those who evolve will be in a better position to embrace technology and advancements going forward. Focus on controls and luminaires that work in harmony and can be delivered quickly. Offer experience centers and educational venues that make the customer’s visit “worth the trip.” Be that place that recognizes their customers and understands their needs and applications while having fun and an engaging staff. Working closely with sales reps who support you with both information and products that work together.
Steven J. Parker, LC is the author of Lighting the Way to North America — from Startup to EBITDA and former president of Lightech Electronics North America and SLV Lighting North America. In addition to being a “lighting geek,” he is licensed captain, avid scuba diver, and underwater photographer.