By Ashlei Williams
“I mean, they just bought a grocery store chain?!” said Mike Connors, CEO of Bulbs.com, one of the largest lighting distributors in the U.S. He was referring to e-commerce and cloud computing giant Amazon, and the ripple effects that its business strategies and expertise in online sales are having on multiple markets.
It’s no secret that the game of online sales is one now controlled by the customer. How much do they want to spend? Do they connect with the brand? Is there a higher quality option elsewhere? All of these questions come into play during in-store and digital shopping experiences, oftentimes simultaneously as customers weigh their options in real-time on smart phones and mobile devices.
And, it’s no longer an issue that B2C is facing alone. Digital shopping trends, customer demographics, and business strategies are permeating B2B. That’s where Connors’ comment about Amazon comes in.
The business of the internet is forcing the lighting industry to recalibrate its sales strategies. In the following interview, Connors took the time to share insights on how Bulbs.com is leading in online sales and what the industry needs to do to keep up with technology changes and customer demand.
Can you start by giving readers an inside look at Bulbs.com?
We’re an internet startup. In 1999, a bunch of corporate folks left for a new gig and were in a very interesting time in business. We took on some venture capitalist money and we started the business with the intention of going after commercial customers. Our distribution and shipping is here in Worcester, Massachusetts. We’re ranked as a $20-25 million business, according to the Internet Retailers Annual Top 500, and 85 percent of our sales are B2B largely in property management companies, the hospitality industry with restaurants and lodging, along with retail, health care and manufacturing.
The way we work is we acquire new commercial and residential customers using organic and paid online search through engines like Google and Bing. We also have a pretty good sized group of commercial sales people who manage territories. Being able to ask questions on the phone in the moment is always a great opportunity to help a customer. The first 10 years of us being in business, lighting was interesting but it really was about replacement lighting. Now with LEDs, it’s a very different and exciting story.
How would you describe the current state of brick and mortar versus online sales in the lighting industry?
It’s pretty clear, particularly if you’re a brick and mortar operation, that the volume of online lighting purchases is on the rise. I’m pretty sure that lots of the brick and mortar folks are seeing erosion in non-project orders. The commercial brick and mortar guys do a lot of work as it pertains to large lighting retrofits of office buildings, hospitals, and retails locations, and that’s something that’s probably starting to be eroded by the online guys like Amazon and Home Depot. We get a lot of that business now, too. So, there’s certainly a degree of movement into the online area.
Something, though, that’s driving that is the continued advancement and maturation of the LED lighting category. Users are going online to get information because there’s so many subtleties and uncertainties about things like how does a LED compare to the light source we’ve always used. Key attributes of the product selection process now are brightness or the lumen output, and then what is the color temperature, because there’s a broad array of color temperatures that can be emulated by LED bulbs. From a commercial perspective, many facility managers will know about lumen output and color temperatures. But, by and large, the population will not, and they are having bad experiences when they go and buy their first LED. So, the online venues that can convey that information are helping to drive more business into the online market.
How is the rise in online sales playing out currently in the lighting segment?
Well, if you go into a brick and mortar electrical distributor, they are not going to demonstrate color temperature or do a brightness comparison of a linear florescent tube with a LED because that’s not really what they do. They are relying on the person who walks in the door to already have that information. I think the only brick and mortar operations that do that pretty well are lighting show rooms, whether it’s one that sells to commercial builders and interior designers or it’s one that’s for residential. Then, there’s Home Depot and Lowe’s who, I think, are trying but are not doing a very good job. More often than not, the person who’s working in the lighting department at those stores doesn’t have that depth of knowledge needed.
And, that’s where online sales come in. A well-designed site can provide the lighting buyer with a rich pallet of information using text, images and video, enabling them to take in as much information as they’ll need to make an informed purchase. With continued improvements in bandwidth, online venues have the ability to build even further on their ability to interact with the customer. Over the past 24 months, we’ve seen a marked increase in customers, particularly among the commercial buyers, who understand more about how to convert the lumen output of an LED to the lumen output of a linear florescent bulb, halogen flood light, or whatever the legacy light source may be. Those shoppers now can shop on price and availability.
With Bulbs.com, what are the sales trends, customer demographics, etc. that have influenced your business strategies and goals?
We learned early on that we are not the lighting company that would service The Gap or Staples. Our customer is the small- to medium-sized commercial property that tends to have more than one location and anywhere from 10 to 5,000 employees. Virtually all of our sales opportunities begin with an online search. For us, a lot of expertise has been gained around figuring out how to get the right customer to click on an online ad. It has a lot to do with the products that we carry, what we say in ads, and where the customer lands when they click on an ad. And a lot of that is pretty standard internet-talk, but I don’t think it’s something that most of the brick and mortar industry understands. Anybody can build a catalog site with lots of SKUs and information.
The lighting category is complicated enough; an electrical distributor’s offering is far more complex. So, you really have to provide user-friendly search and navigation tools on your site. At the end of the day, you want to be able to convert on that first-time site visitor into a purchasing customer, and, for us, a lead. Those leads are turned over to our sales team who then contact the customers to learn more about their business, build a relationship, and turn them into happy, repeat customers. For us, it’s been about having a good combination of digital skills as well as sales outreach.
What recommendations do you have for those considering entering or strengthening online lighting sales?
I’ve talked to more than a handful of electrical distributors. Those that I found were unsuccessful with a digital sales or e-commerce strategy made the mistake of building a catalog site that was not user-friendly. If you are going to build a catalog site, at least make it easy to search and navigate. Good search and navigation requires precise data. Data is king, in that all of the product listings must be exactly right.
Also, brick and mortars that have developed an e-commerce strategy seem to be struggling with integrating e-commerce with their existing sales force and branches, creating a sort of silo conflict that stems from who gets the sales credit. The challenge to brick and mortar companies is that they’ve been selling a certain way for a long time, and now websites are here as a new tool that can acquire customers and generate revenue. I don’t know that the leadership in many of these companies has figured out how to deal with that. So, their sales force feels like they’re dealing with a company that’s picking their pockets because the website is now taking orders out of their territory.
The companies, as a whole, don’t recognize that they could be acquiring hundreds, if not thousands, of new customers each month if they had a stronger presence online. Only a few of the companies have figured this out. And, the longer that the others wait and the more commoditized the LED category becomes, orders are going to be heading to Amazon.
Looking more generally at how technology if affecting the lighting category, what do you predict will be the next big thing?
Smart lighting is the next big thing, whether it’s in an office, hospital, or retail space. We’re already seeing an increase in activity, despite the growing pains among manufacturers as they navigate through which communication platform will be preferred by customers. Will it be Wi-Fi, Bluetooth, Zigbee, or some other framework? Multiple platforms make it difficult for users who want to use their smart phone to manage the lighting in their facility but need different apps for each product. The introduction of Nest, Amazon Echo, Wink and others has begun to simplify the control platform issue, but a wide range of compatible lighting has yet to appear. More sophisticated wireless commercial lighting platforms are available, though they tend to be targeted primarily toward very large facilities.
Additionally, the growth in mobile shopping continues with B2B. We’ve seen constant increases in usage with mobile traffic now accounting for over 40 percent of our total traffic. The lighting category presents a pretty significant challenge, due to the degree of technical information that needs to be given to the customer. One challenge is creating a user interface on a 5-inch screen for a contractor out in the field who is trying to identify and order a light fixture or track an order that has already been placed.
Finally, there’s the speed of information delivery. It’s allowing us to do more at Bulbs.com with how we manage searches, how we improve site security to detect internet fraud, and to build our CRM so sales people can more effectively look at prospects and build relationships. It’s all pretty exciting stuff.
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Williams has been writing for business, philanthropic, minority and academic audiences for a decade. She earned her master’s in Journalism from Northwestern University’s Medill School and bachelor’s in English from Spelman College. In 2016, she started GJC Publicity LLC, focusing on editorial, marketing, advertising and creative writing. She resides in Seattle, Washington, where she spends her spare time tutoring with Best In Class Education, in the gym, and checking out the fine arts scene. Get in touch with her via phone 253-693-8711, email ashlei@gjcpublicity.com, or web www.gjcpublicity.com.
Tagged with Bulbs.com, e-commerce, Mike Connors