The Lighting industry has been through a lot of change ever since LED tech first made it to market over 30 years ago. But a lot of this change has been good for customers; gone are the days of high barriers to entry, low levels of competition and high prices. And between the developments in LED lighting offering better value in the long-term and a healthy competitive marketplace; customers are getting much better value for money.
1. THERE WILL BE LOSS
In the free market there is always an element of ‘creative destruction’ however in light of the current crisis this will be accelerated. In simple terms, not every business is going to survive this difficult period. Financially fragile companies or firms that are in debt unfortunately may not be able to out see the storm.
2. BACK TO BASICS
During financially stressful times businesses will be focusing on shifting inventory in order to meet end-of-month payroll and other expenses. This means other “softer” activities such as PR and product innovation may go out the window.
3. PAYMENT TERMS WILL LENGTHEN
In a crisis, cash is king. So, it will be likely that various parties along the supply chain will be demanding longer payment terms. While this may be crucial in some cases to allow the supply chain to keep flowing; it can cause issues later. The danger is that once a supplier allows terms to drop from 30 days to 120 days, it can be difficult to reverse.
4. THINK LOCAL
The lighting industry has a huge reliance on China for their supply chain. Any disruption to this, opens up an opportunity for local producers. However, this may require a balancing act as one thing we’ve learned in recent years is that clients want cheap luminaries. So, while local producers can jump in to keep the supply going, everyone will need to keep an eye on the costs of production to make sure pricing can be competitive.
5. TECH IS KEY
In the ‘new norm’ where working remotely is no longer just a benefit but a requirement, it goes without saying that companies without cloud-based accounting, business communication and customer relationship management (CRM) platforms will struggle to adjust to a working-from-home model.