Sales of legacy lighting technologies used to be fairly seasonal. Does the same hold true for LEDs?
When the 1960s rock band The Byrds (and the bible) confirmed that “to everything there is a season,” that statement even applied to sales of conventional lighting technologies like fluorescent and HID, which historically spiked every spring and summer. But does the same sales cycle hold true for LEDs? Following, several distributors nationwide share their perspectives on the ‘seasonality’ of LEDs and some of the factors that trigger spikes and dips in sales orders.
Tracking the Trends
According to Charles Dix, lighting product manager at Werner Electric (www.wernerelectric.com) in Cottage Grove, MN, geography impacts the LED sales cycle – to a point. “In the upper Midwest, the seasons still have an impact on lighting sales since we have a limited time for construction, so there’s always a rise in sales related to exterior lighting and major project work during the summer and fall months,” Dix said. “However, by virtue of their ease of installation in many cases (e.g., retrofits), LEDs allow for installations/projects to take place over the course of the year, so even though we see a bump during the warmer months, it’s not as pronounced as it used to be for legacy lighting systems.”
For the team at Lincoln, NE-based Border States Electric (www.borderstates.com), seasonal dips in the sales cycle have been fairly predictable. “Downward trends in lighting sales at certain periods during the year have always been the norm,” shared Scott Bailey, lighting product manager for the firm’s North Central Region. “The months of February and November historically seem to be the notoriously low sales months and, for lack of a better reason, we typically blame it on the cold weather and the holiday season,” he said. “In looking at our sales over the last eight to 10 years, these periodic downward trends are still there, even with the evolution of LED.” By contrast, Bailey said, upticks in their lighting sales haven’t been as readily predictable. “We have strong months interspersed with weaker periods throughout the year, yielding no real trends,” he explained.
Halfway across the country at Electric Supply (www.electricsupply.com) in Phoenix, “we’re a small, two-store independent that serves mostly industrial and institutional customers, and our business has been fairly steady as we do mainly MRO business and lighting upgrades from traditional lighting to LED,” said lighting specialist Rich Bowen, who noted that the only slowdown in their cycle is when money runs out for each of those segments. “For example, new budgets are normally introduced every June 1st for schools, every July 1st for many cities, counties, and state organizations, and every November for federal entities,” he said. “Many industrial businesses have calendar-year budgets, so we often see a push a month or two before these dates so that the money can be spent and not lost before budgets are renewed….and of course a month or so after that when the new money is ultimately released.”
Leveling the Playing Field
Our distributor experts agreed on the need to both diversify their operations and employ creative strategies to balance the inevitable dips in their annual LED sales cycle. “Our company is a major player in the construction market and it can be hard to even out the ups and downs that seasonal construction work creates,” admitted Werner Electric’s Dix. “However, as a large automation provider, we’re fortunate to work with many industrial customers who tend to do lighting projects in early spring or late fall/early winter as budget money becomes available, which helps to offset the construction declines.”
At Border States, the slower months provide a great opportunity to engage in other activities that are beneficial to the business. “Since the weaker months are expected, we capitalize on those ‘unproductive’ sales periods to concentrate on training our customers, updating them on new products, and ensuring that they have the latest technology updates so that when they’re back to their normal routine, they’re prepared,” Bailey said. “Plus, if you have a room full of customers ready to learn, it makes for a much more exciting environment.”Tagged with best practices, sales