Mike Connors, CEO of Bulbs.com, shares his perspectives on the world of online lighting sales.
With the online medium accounting for a growing percentage of sales within most product-oriented businesses today, including electrical distribution firms, an understanding of the changing nature of e-commerce is critical for growth and success in today’s digital age.
For this reason, lightED reached out to Mike Connors, founder and CEO of Bulbs.com – a 20-year-old, Worcester, Massachusetts-based online replacement lighting supplier which has since grown to service 200,000+ commercial and industrial businesses in more than 300,000 locations nationwide – for his perspectives on the changing face of online lighting sales, how his business has evolved to drive sales growth and customer engagement, and his best advice for electrical distributors regarding e-commerce strategies.
lightED: How would you describe the profile of customers who buy on Bulbs.com (e.g., large vs. small companies, buying for the first time or MRO, etc.) and your business process?
Connors: We sell to small-to-medium-sized businesses and cover most verticals throughout the U.S. They usually find us during a Google or Bing search for a hard-to-find product. Typical titles we interact with include business owner, purchasing agent, and head of maintenance, sustainability, and finance. Our business is built around using the site to generate orders from commercial customers; after making a purchase, those new customers are then assigned to one of our Commercial Lighting Specialists, who will continue to build the relationship by providing solutions to the customer’s lighting challenges.
lightED: How has business fared in the online sale of lighting products in 2019 and what are some highlights?
Connors: Online lighting sales in 2019 have been a mixed bag. On the plus side, we’ve built partnerships with nearly 30 of the country’s largest electric utilities and this has opened the door for us to use utility incentives to help our customers upgrade to energy-efficient LED lamps and fixtures. We built an interface into our system allowing our Lighting Specialists real-time access to incentive data, which speeds our ability to identify solutions quickly and accurately. As a result, we’re taking opportunities off the street faster than we ever have. We’ve also continued to build personalization into both the site and the connection between the customer and their Bulbs.com Lighting Specialist. Among those enhancements, we recently built functionality into the site that alerts our Lighting Specialist when one of their customers has abandoned a shopping cart; thanks to real-time visibility into the customer’s shopping experience, we’ve been able to immediately contact the customer before they consider searching elsewhere. Finally, with the help of graduate supply chain students from Worcester Polytechnic Institute in 2017/18, we better understand the true cost and impact of shipping expenses on our business. Since implementing several changes to our shipping methods as well as the types of customers we target, we’ve accomplished a two-point margin improvement.
lightED: What challenges have online lighting sales presented in 2019?
Connors: On the down side, we’re seeing single-digit growth this year. Some of the decline is driven by such factors as less demand for legacy lighting products (e.g., incandescent, halogen, etc.) as well as the reality that prices of LED lamps and fixtures are falling at a rate of 6% annually. In addition, competition from Amazon is real. If a customer can Google a SKU number or product description, they can find it on Amazon or any other well-built site. We combat the ‘Amazon effect’ by working very hard to build a relationship with our business customers.
lightED: What measures do you take at Bulbs.com to keep customers “in the know” about lighting?
Connors: In addition to regular outreach by our sales team, we send several million e-mails per year that contain offers for popular commercial products as well as relevant content regarding applications, products, and utility programs. We provide quick turn-around guidance on energy savings that enables decision-makers to collaborate with others in their organization. And we also help to streamline the buying process for customers on the site by offering highly-effective search and navigation capabilities, landing pages for top customers by vertical segment, easy-to-apply credit terms for commercial customers, and free shipping.
lightED: What trends are you seeing in the purchase of lighting online?
Connors: I see the continued growth of Amazon with an added focus on businesses – which means watch out! I’m also seeing the collapse of some LED lamp and fixture manufacturers, so distributors need to work with suppliers they trust, not just those offering low cost/price. Also, the primary source of competition for Bulbs.com is the electrical distribution channel. Since electrical distributors continue to be very slow in adopting a meaningful e-commerce presence, online specialists like us can get in front of electrical distributor customers who use web search to find products and then work to build our relationship by using our Lighting Specialists.
lightED: Do you feel that online lighting sales is where some or all of the lighting industry is eventually headed?
Connors: Not only will online sourcing and procurement continue to grow, but savvy web sites will expand their customer-facing applications for lighting design, energy calculations, and utility incentives.
lightED: Any tips you can share with distributors to help them maximize their sales?
Connors: First and foremost, a true e-commerce strategy doesn’t consist of “hire a VP and build a website.” E-commerce is a serious sales and marketing tool that needs to be integrated with existing field sales and branch strategies. E-commerce is also very complicated based on its need for extreme data accuracy, an effective online search strategy (e.g., how customers will find you), and both compelling design and content development for the site. Another tip for electrical distributors involves mobile access. Bulbs.com is acquiring more contractors than ever and they’re using their phones in the field to shop. Not only do distributors need to build a mobile site, but they’ll need a team that can ensure that their site ranks on Google when a contractor searches the web. That’s not easy, and with the continuous churn of LED products, the task of optimizing one’s website is ongoing.
Tagged with best practices, e-commerce