By Linda Longo
Better read this story about market conditions quickly – the pandemic is causing our business landscape to continually shift…maybe even by the time you finish reading!
Lighting manufacturers, their sales representatives, and showrooms are reeling from the sudden economic downshift of the past three months. There was a lot of knocking on wood at trade shows in January among people in every segment of the industry when I asked how business was faring. And while the year 2020 started off with high expectations, the COVID-19 pandemic rapidly turned all of that positive momentum into a tailspin.
How are our peers handling these sudden changes? For many it depends on your region – and how badly it has been affected by the virus – as well as the sector where the majority of your efforts are focused. Those whose businesses are heavily concentrated on hospitality work (i.e. lodging, gaming, restaurants/cafes, retail/boutiques, and even office space) and residential interior design have been the hardest hit as many non-essential construction projects (especially in hard hit cities such as New York City and Chicago) and nearly all walk-in consumer traffic have come to a halt. For those whose customers are comprised of home builders and multi-family construction, business has remained steady.
“In short, builder business has been phenomenal even in the wake of the pandemic,” admits Donovan Turney of Light Ideas in Florida. “Between Charlotte, Lee, and Sarasota counties, we have been putting up record numbers. March will close out as the best March since 2006.”
Light Ideas’ current success is not the result of good luck; it was part of a calculated strategy. “We have found that the past three years of heavily pursuing new construction builders has been our savior for now,” Turney comments. His showroom divides builders into three categories: Custom, Semi-Custom, and Production.
“The semi- and full-on production builders are our best friends [right now] as they require little to no ‘in-person’ meetings. Most of what they are buying from us are pre-determined packages that we set up for them with our preferred vendors,” Turney shares. “We are receiving purchase orders daily from those builders and they are the bulk of our business at the moment.” So far in March 2020, Turney says there have been 451 building permits issued in Charlotte County; 830 in Lee County; and 628 in Sarasota County and Light Ideas’ showroom is involved in significant percentages of those projects.
When it comes to working with the “true custom” home builders, Turney says the process takes a little more creativity. “We use the website-hosting service from Lights America,” he explains. “The team members tasked with managing our custom home builders accounts have been on long phone call after long phone call with home buyers working with the custom contractors. Utilizing the Wish List features and video call options on our mobile phones have been fun, but we are looking forward to the days of our buyers just coming in again.”
One of the challenges of working with custom home builders is the timeline. Turney estimates the usual turnaround time for custom builds is roughly 9 to 14 months. “We’ll have a bunch of rush orders, but our loyal custom builders are helping us communicate with their buyers that now isn’t the best time to rush to complete a lighting selection,” he notes. “Having made the investment in time and effort in cultivating these custom builder accounts has paid off. Just because folks aren’t selecting lighting for their new custom builds at the moment, doesn’t mean that for the past year they haven’t been. We are ordering and delivering house packages every day. The main adjustment to this process has been that we order a little earlier than usual to try to fend off any shipping delays during the pandemic.” Turney is mindful that the new construction boom might not last forever. “My next challenge is to capitalize on remodeling this showroom and go after more retail business,” he states. “I don’t want to be caught off guard with too many eggs in any single basket.”
Another lighting showroom that has found steady builder business during the pandemic is North Carolina-based Lights Unlimited with several locations in the Raleigh, Wake Forest, and Fuquay Varina communities. “We are business as usual other than the doors are locked and we’re doing everything by phone, emails, and online,” states owner Michele Ball. “We are still sending out houses every day. I have employees cleaning and – if it’s one of our locations with less builder clientele – doing everything they can to stay busy.”
Ball says that her staff has had one-on-one appointments “if absolutely necessary,” but they allow only two people in at a time and for a two-hour time limit. Like many lighting showroom owners nationwide, Ball’s goal through the pandemic is to keep all of her employees on board and working.
Meanwhile in Georgia – specifically, Pace Lighting in Savannah – “Contract/contractor work is continuing just like normal, less some hiccups in product availability as shipping has been backed up across the country. Distribution channels have been working on getting grocery stores resupplied first after all the runs on shopping,” recounts owner Lisa Bartlett, who also is the organizer of the Lighting Showroom Association (LSA).
“We are open, with limited hours, for customer entry on a call-ahead basis,” Bartlett states. “That’s not to say that business isn’t down a lot – because on the retail sales side, it is for sure – but if someone wants to come into the store, they can. Deliveries are basically running like normal, and curbside pick-ups, too. Customers call when they pull up and we do what we always do, which is load the product into their vehicles for them. I would describe business as ‘normal-ish,’ but just less volume with less of the smaller sales and more of the job or large-order sales.”
Pace Lighting’s administrative and warehouse/delivery staffers are working as they do normally, as is the builder sales manager, but inside salespeople have reduced hours. “It really all depends how long this [slowdown] goes on and how much other sales drop off or are forced to stop,” she admits. If construction work becomes restricted, “we will really feel some pain,” Bartlett says.
I spoke with several lighting showroom owners on the West Coast who are working to fulfill orders by themselves – handling curbside pick-up, taking phone orders, and even doing the home delivery for already-ordered merchandise – with perhaps only one other worker at hand.
Trying to weed through the pages of fine print for the various new programs (i.e. CARES Act, SBA, EDD) has been an additional challenge for showroom owners. Changes to recently announced programs that are still being hammered out are complicating things further. It also pays, as one of the West Coast showroom owner discovered, to go over your insurance policies with your agent to look for “business disruption” inclusions.
Similarly, lighting sales agencies are offering value to customers in unique ways. For example, Pennsylvania-based Lighting Geeks – which serves the residential, multi-family/commercial, and hospitality markets – is offering virtual classes online. “The Coronavirus is obviously changing our day-to-day norms,” says agency head Todd Pawlowski. “Instead, we are offering webinars. We want to make sure everyone is trained so when this passes, we are off and running to service our clients.” As of press time, 20 people have attended the sessions, which range from in-depth product knowledge to a review of best practices and sharing strategies on hospitality and job coordination. Pawlowski estimates another dozen clients are in the midst of finalizing schedule dates and times. “I keep each session very small, and some have been one on one,” he explains. “It’s very casual. Everyone has been appreciative.”
Melissa Leib of California-based Leib & Associates posted a short video this week for her customers on the topic “How to Sell During This Time” on all of her social media platforms (Instagram, Twitter, Facebook). She advises retailers, “One thing you can offer [the end-consumer] is video. You can literally take people on a virtual tour of your showroom. You can also highlight a particular manufacturer or a specific category. Or you can show them what you have in stock.” Leib mentions that she recently purchased a “vlog kit” from Best Buy (approximately retail price is under $50) and recommends retailers can do the same or create video by using their smartphones or tablets.
Many manufacturers have gone the extra mile to help their distributors by offering a smorgasbord of options including: free drop shipping, reduced shipping fees, no minimum order fees, no restocking fees, and free or reduced freight. Lighting showrooms are appreciative of the help, but express concern that the manufacturers are struggling as well.
Depending on state rules, some domestic manufacturers are able to continue production while others are not. Cinnamon Alvarez, President & Founder of ceramic lighting company A-19 in California, adds, “We are still manufacturing. Who would have thought that being such a small company would work to our advantage? We’re fortunate to have family who live together continue to make our ceramic in one building, while other work like making glass and applying finishes is done in an adjacent building,” she recounts. “We have been confirming ever order prior to shipping to make sure deliveries can still be made. I’m seeing more orders than I expected to continue coming through, and I’m keeping my eyes and ears open for new and unique opportunities. I just recently took a position on the board for our county workforce development department where we’re meeting to get a jump on the record numbers of unemployment and business closures. We’re fortunate to have a strong manufacturing counsel in California. I’m seeing requests and surveys asking about capabilities to make much needed supplies and our industry coming together. I’m prepared to ride this wave and my creative gears are turning more than ever. I’m not sure where exactly we’ll end up, but I’m optimistic.”
Organizations such as the American Lighting Association (ALA) and the LSA are stepping up to help membership. The showroom members of the LSA have been sharing tips on navigating the government programs, as well as techniques that are working for their stores and brainstorming ideas to stay afloat – from negotiating with landlords to the hidden highlights of SBA assistance.
The ALA has made all of its educational webinars – including the coursework for the Lighting Association accreditation – available for free to all members. The offer has been so widely received that more than 700 members have signed up to become Lighting Associates and 200+ tuned into last week’s webinar on How to Retail in COVID-19 by ALA Conference keynote speaker Bob Phibbs, the Retail Doctor.