Recent Survey of Distributors Reveals Opportunities for LED Manufacturers

Raleigh, N.C. -- A recent survey of electrical and lighting distributors demonstrates the importance of the sales channel for LED lighting manufacturers in gaining access to the emerging solid-state lighting market.

According to the survey results, distributors make the recommendation to the end customer about which brand of LED lighting to specify almost 60% of the time; and more than 80% of distributors surveyed sell as many as seven different brands of LED light engines or fixtures. Yet, 78% of the distributors also said they were not receiving enough product and sales training from LED suppliers, indicating that there is an opportunity for LED manufacturers to expand their sales through distribution by increasing the level of product training and education. The survey was conducted by Energy Smart Marketers, a marketing agency focused on the LED market.

“The results of the survey make it clear that for widespread adoption of LED lighting technology to occur, there will need to be a focused effort by LED manufacturers to educate their distributors on LED technology to differentiate their company,” said David Gordon, principal, Channel Marketing Group. “The survey also confirmed that lighting and electrical distributors are the most important sales channel that LED manufacturers can use to reach the end customer with their product message.”

The survey was conducted with 1100 people from 400 different electrical and lighting distributors. Among the results:

• Nearly all respondents (98%) believe that the overall market for LED lighting will
significantly increase in the next three years.
• More than 89% of the time, the distributor recommends the brand of LED fixture,
confirming the critical role that distribution plays in the sale of LED lighting.
• Most respondents (72%) said that it was very important to know the name of the LED
component manufacturer in the fixture.
• More than 80% of distributors surveyed sell up to seven different brands of LED light
engines and fixtures.
• Although 89% of the respondents currently rely on manufacturers’ reps to learn about
LED products, the same percentage indicated that they were not satisfied with the level of
product training and education they were receiving from the manufacturers.
• Other concerns identified in the survey included return policies, inventory commitment,
product warranties, and distributor pricing.

The survey results point to several trends in the emerging LED lighting marketplace,
according to individuals involved in Energy Smart Marketers, particularly a growing need for
programs and promotions that target the distribution channel.

“LED manufacturers are seeing the value in evaluating and optimizing their distribution
channel,” said Gordon. “With distributors recommending LED fixtures in almost 90% of the
cases, there is ample evidence that manufacturers can influence these recommendations through training, promotions, rebates, special pricing and adoption of distributor-friendly policies.”

“The survey indicated that a majority of the respondents are relying on traditional
electrical distributor trade magazines as an information resource for LEDs,” said George
Bournazian, vice president, BtB Marketing Communications. “This means that LED
manufacturers cannot rely solely on specialized lighting trade journals or electronic component
magazines to reach this key audience. There is a clear need to reach distributors directly with
education and product training to increase their brand loyalty. This survey demonstrates there is
an opportunity for LED manufacturers to take a leadership position with their distributor
partners. ”

The complete survey results are available for $199. To discuss other aspects of the
survey, contact BtB Marketing at 919-872-8172.