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199: What’s Behind the Big Boom in Lighting?

Written by Rob Stott

January 30, 2024

There’s no denying the fact that the lighting category has absolutely exploded in the custom integration industry. Similar to shading before it – but on an entirely different level altogether – lighting has become a must-do for CIs looking to expand and grow their business. To get a grasp on why lighting has experienced such a surge in popularity, we chat with Jennifer Kirkpatrick, director of sales for American Lighting.


 

Rob Stott: All right. We are back on the Independent Thinking Podcast and excited to be joined today by Jennifer Kirkpatrick, Director of Sales at American Lighting. How are you doing, Jennifer?

Jennifer Kirkpatrick: Good.

Rob Stott: We’ll start right there. How are things?

Jennifer Kirkpatrick: Well, Rob, thanks for having me. This is great. We’ve been so excited about joining the group and it’s great to get the word out there and let people know that we’re ready to partner with people.

Rob Stott: Absolutely. And you talk about a category, I feel like everyone’s talking about it, it’s so buzzwordy, but in a good way, right? It’s so exciting to dive into this category and I can’t wait to do it with you and it should be fun. A lot of fun things to talk about today. But before we do that, set us up, set the stage. Tell us a little bit about who you are, your background, and your path to American Lighting.

Jennifer Kirkpatrick: Yeah, sure. So it’s funny because I was never one of the popular kids, but the last four years, I felt like it because lighting has been very popular in the custom integration channel, and we’ve been very fortunate that we were one of the first ones to get into the channel. So back in 2019, we started Proluxe. So Proluxe is the division for American Lighting that caters to the custom integration channel. And I kind of stumbled on it working with some of the lighting showrooms that were starting to get into controls that were part of multiple buying groups. And I’ve been with American for 10 years. I’ve worked with lighting showrooms, electrical wholesalers, lighting designers, architects, engineers. And when I heard about the custom integration channel, I was like, “I don’t know if they’re going to be able to compete with these other channels that have been in it for so long.”

It’s always hard to go against the grain and try to retrain people on who should be selling lighting and specking fixtures. And it’s been incredible to see the evolution the last four years when it comes to integrators embracing lighting and what they’re adding to the industry as a whole. Because I can tell you that a lot of these other channels that are selling lighting, they are specking the bare minimum. They are absolutely petrified of getting into controls and doing advanced systems. So it’s been great to see the dealers get excited about lighting and start creating these really immersive experiences that include dynamic lighting. So that’s kind of been our path into the custom integration channel. And what I like about it is that the integrators are open to learning and we’ve been able to work hand in hand with them to make sure not only that the right wiring is getting pulled, that they’re specking the right products, that it’s being installed correctly, but we even have a team of people that can help with the integration portion of it.

Rob Stott: Yeah. No, so many nuances to this space that are, like I said, at the top, I’m looking forward to diving into it with you here. But for someone that hasn’t heard of American Lighting, set the stage for that. Sounds pretty straightforward, right? A lighting company. Cool. You sell light fixtures, but is there more to it than that? What does American Lighting do?

Jennifer Kirkpatrick: Yeah. So we’re really unique. So we’ve been around for the last 40 years. American Lighting has sold to lighting showrooms, electrical wholesalers. And in the market, we are known as a linear lighting brand. So whether that’s low voltage, line voltage, anything that has a consistent line of light, that’s what we specialize in. And it’s funny, when I first got into the CI channel, I would go out on the road, I’d have all my linear lighting strips, and the integrator would be like, “Well, where are your downlights?” And they didn’t realize that there’s so many layers of lighting that you need to create a space that you can’t just pop in a couple of four-inch, two-inch downlights.

You have to have that accent lighting for coves and toe kick, backlighting. We even have sheets of LEDs that backlight countertops. We have linear options that you can address individually to create chasing effects. So the last four years, we’ve spent a lot of time educating dealers on where to use our products, but because we’ve been doing it for the last 30 years, we’ve been able to bring out innovative products when it comes to linear, how to control it, what power supplies to use. So we’ve been able to offer a ton of education to the dealers on where to use this product.

Rob Stott: It’s funny, I feel I could put you in a room with video professionals and you’d have a lot of the same conversation because I’m sitting here thinking my time working in front of and behind cameras about the key lighting and backlighting all that. It’s a lot of the same terms and terminology. It’s just cool to hear that, right?

Jennifer Kirkpatrick: Yeah, no, it’s funny because there is a lot of crossover. A lot of the people that are getting into lighting did theatrical lighting, they did photography, video, and that’s what the integrators are interested too. And the great part is that you can take technology and lighting and combine it into one thing. So that’s why the integrators have really grasped onto the category because it takes what they love, which is technology, and then you can start adding lighting, which everybody needs. There’s never going to be a time where people don’t need light fixtures.

Rob Stott: Hey, amen. And you kind of mentioned it, we’ve seen over the last couple of years that as the smart home has continued to progress and really reach into all corners of the home, lighting has been a part of that. It starts kind of low. A couple of years ago, maybe it’s just those LED strips that had the mini remote controls that people might be familiar with, but it’s really advanced over these last couple of years. Do you think something caused it? Why did it take off, this category, the way it has in your opinion?

Jennifer Kirkpatrick: Yeah, it’s funny, I’ve had this conversation with a lot of dealers and I think we’ve seen in the last five years that what integrators were relying on for their main income was speakers and TVs. And we’re seeing that those prices are just plummeting. So when they used to be able to sell a speaker for $30,000, we’re now looking at buying that same one for 5,000 or 10,000 and they’re finding that more people are going to the DIY side of the field to buy those kind of fixtures. There’s more availability when it comes to controls. So a lot of integrators are even saying that their control sales are down. So I think when people saw this big boom with the shades, they realized that they could diversify and they could bring in new product categories and be successful in those categories because they are there from the beginning.

They’re going to tell you where the window is, where the wiring’s going, how the controls are going to work, is it independent control? And they have so many options when it comes to that. And they start with the homeowner. When you’re just breaking ground, that lighting makes sense too because if they could start talking about dynamic lighting, they know what wire to pull to each section, they know that they’re going to be responsible for the maintenance of this product as well. And I think for too many years, integrators were going out there and they were having flickering with a light fixture, humming, strobing, and of course, everyone’s pointing fingers, “No, it’s the control. No, it’s the lighting fixture.” So now that integrators have a choice on what brands they’re using, there’s fewer callbacks and they’re able to make their money selling the fixture and not have to worry about continuing to go back to that job to fix it.

Rob Stott: Well, there’s a couple of things you mentioned there that I think are important. One that start right at the top with the pricing, right? Is it a category that might be a question that I’m sure you feel a lot too? We’ve seen speaker, you mentioned it, speaker, TVs, I think another great example, right? TVs that were once 30, $40,000 are now getting for pennies on the dollar as a consumer. Is lighting protected in that way? Obviously, you could look at DIY and there are brands out there that it’s like, “Hey, plug a light bulb in and connect to our app.” But is it more protected in that sense from a pricing standpoint?

Jennifer Kirkpatrick: I think the difference between lighting and some of those other products is that you can visually see the difference when you start to cut corners. So people will see a green hue, they will see that the lighting’s not consistent from one diode to the next. They will see strobing or flickering or I know we’ve all dealt with this too when we buy a cheap light fixture and we try to dim it and it maybe dims 10% and then it turns off. So there is a huge difference when it comes to performance and lighting. And if you go on any social media site right now, whether it’s Pinterest, Instagram, you’ll see tons of people talking about lighting – color-changing lighting, backlighting TVs, mounting it to their wall, installing it into the ceiling.

So right now it is a really hot category in the interior design field. So rather than just throwing in a cheap pop-in retrofit, you can start offering these dynamic lighting scenes that the dealer can install, can control, can program, and fix any issues in the future. So people feel more comfortable going to an expert when it comes to lighting because it’s such a specialized field. And there’s opportunities to sell a small, inexpensive package or if the customer wants to go all out, they could sell them a hundred thousand dollars in different light fixtures.

Rob Stott: Well, yeah, and to the other point that you brought up is… It’s like one of those aha moments because integrators are already in the walls when they’re doing a lot of these projects and they’re pulling wires and they’re doing… It’s kind of funny that they never thought about it before, but it’s just one of those categories that kind of does make sense. You’re already tearing down that drywall to run speaker wire, whatever it might be, control system, the CAFI, everything that’s behind a wall, they’re already doing it. So bringing in lighting, something that… You think about home theaters from a design standpoint, they were probably doing it to a somewhat extent, or maybe if it’s retrofitting a home theater into a space, maybe they’re just playing with what’s already in there. But it’s a category that, from a technical standpoint, kind of fits right in with what they’re already doing. So it just makes sense to think about it from a, “Hey, well, I’m already in here, so how about I do this for you as well?”

Jennifer Kirkpatrick: Let’s optimize it, right? “If I’m here, let’s do it all.” And you bring up a good point. It seems like it would be the logical next step for an integrator, but if you put yourself in their shoes, they do so much. It’s stereos and TVs, and now they’re looking at air quality filtration systems and HVAC. So it is like where do you stop, right? Are you stretching yourself so thin that you’re not providing a good service? And what I’ve noticed is that the dealers that pick primary vendors and they pick certain solutions that are their go-to solutions for every job, it makes it less overwhelming. And that’s what a lot of our dealers do. They know that we are the linear lighting expert and they pick maybe five products that they use on a regular basis. It’s the 80-20 rule. 80% of the time they’re picking these five products.

We have more if they want to go down that path, but with our services, we actually do a full layout for them. So we’re going to tell them what gauge wire to pull, how long those runs can be, how to address your DMX decoders. So we take all of the questions, all the doubt out of the dealer’s mind, and just like they do to their customer, we’re going to help them from start to finish. So we’re going to give them the products, the bill of material, we’re going to tell them how to install it, we’re going to give a wiring diagram so it takes all the fear out of it for them. And a lot of other vendors don’t do that. So I think the key goal for every dealer should be, “Let me pick the vendors that I have a great relationship with and are willing to support me so that I don’t get stuck in a situation where I look bad to my customer.”

Rob Stott: No, that’s an awesome point because I could see an integrator listening to this that might think, “Well, hey, it’s not a category I’m comfortable with.” So even if it’s right there and it’s low-hanging fruit for a project, they’re scared to get into it because they’re like, “Sure it sounds the same, but it’s like apples and oranges, both fruits, but very different.” They don’t want to get into it because they think they might mess something up and then that reflects on them. So knowing that they could have a partner that’s there with them every step of the way, giving them that Lego brick book, the building book, the instruction booklet to get it done.

Jennifer Kirkpatrick: Often, they have to be lighting designers too. They’re like, “I got to be a lighting designer.” And it’s like, “No, let us do that for you.” We’ll give you photometrics. We’ll make sure the space is lit the way it’s supposed to be so they look really good to their customer.

Rob Stott: No, that’s a great point. I still feel there might be skeptics out there. This is a category that, hey, to your point, there are design experts out there. There are lighting designers that go into spaces that a consumer can turn to. So it’s kind of one of those, “Well, do I really need to?” What’s the message to them, especially for a space where they’ve seen a lot of noise? So maybe it’s also like, “I don’t want to give in.” It’s like the last hold out, right? Like, “I don’t want to do this because everyone else is. I don’t want to be a follower.” So what do you tell them to get them over the hump of turning away from this category to this point?

Jennifer Kirkpatrick: Change is hard, and we’re all very busy and it’s hard to say, “Hey, I’m going to devote all this time to a category that might not be successful.” But I think shades is the perfect example of where we’ve done it in the past and it’s been very successful. And most of the dealers that I talk to now, shades is about 30 to 40% of their business. We know lighting is going to be the same way, not in a threatening way, but to say, “Hey, if you guys don’t get into it, all of your competitors are going to, and it’s going to be that much harder to catch up in the future.” So you have vendors that are very interested in this channel right now.

They want to be part of this channel. I say that dealers should take full advantage of all the services that they’re offering so that they can bring in this extra stream of revenue and have the support before it’s so crowded that vendors are like, “Hey, we don’t have time to train new people.” Now is the time where vendors are putting a ton of resources into this channel. Take full advantage, learn as much as you can now because eventually, it will have to be part of the business with the way things are changing in the market.

Rob Stott: Is it something you can dip your toe in or do you have to really dive into it and take it all on as a category?

Jennifer Kirkpatrick: It’s funny that you asked that. There are two schools of thought. Either people say, “No, I’m just going to dip my toe in the water.” So the people that are too scared to go full-blown, they will usually do something in their home. And we offer huge incentives for dealers that want to test it out in their home because they want to feel comfortable. I think we all can agree that integrators want to touch, they want to feel, they want to figure it out. They don’t like not knowing. So those dealers will get a huge discount. They will get product sent to their home, they will do their kitchen, they’ll do a cove, and once they do that small project and they see all the documentation and support that we provide, they’re like, “Oh, I can do this.” And linear is already low voltage. They’re already very familiar with it, so it’s easier for them to make that jump.

Now, there’s the other school of thought that if you just dip your toe in the water, it’s not enough to get you excited about the category. So I’ve had a lot of other dealers that just go in. They put it on their website, they talk about it every single time they go and quote a job, and they even create it as a line item on their quote saying, “Lighting design services.” And they figured out what that average number per foot is that they’re selling in most homes. They add it on there and then they see how interested their customer is. Then they decide whether or not they’re going to go full-blown. But unless you’re talking about it, promoting it, and making sure that all of your customers understand that you do it, sometimes people lose momentum because they only pick and choose who they’re going to present it to.

Rob Stott: No, that’s an excellent point. And you mentioned talking about it because it is still a new category in this space, and it feels even though we’ve been talking about it for years, it’s really still in its infancy, right? The idea of how they go to market, we could probably have a whole separate podcast about this, but what’s the right way to talk about it? Is it very different language for them? If they don’t even know where to begin when it comes to talking about lighting, how do they go about doing that?

Jennifer Kirkpatrick: I don’t want to leave you with a cliffhanger, but we’re actually doing a huge presentation at LITapalooza, talking about how dealers get comfortable talking to their customers about it. And we worked with one of our reps, Grover, who is out in Washington, Oregon, and he and a couple of us as manufacturers, put our input in on the four questions that you should ask your customer when you go into a home. That way, you’re not a lighting designer, you’re just feeling out how important lighting is to that customer, and then you’re figuring out where do you want to put all that money? Because there’s a lot of dealers that will take… We’ll take Ketra. I don’t mean to bash them.

There’s only a certain amount of people that can afford Ketra, but these dealers are putting Ketra bulbs in a guest bedroom closet, and as soon as the customer sees that they’re spending $900 on a guest bedroom closet, they’re like, “Whoa, something’s wrong. I feel like I’m getting gouged.” So with these four questions, we decide, “How much money have you spent on finishes? And if you’ve spent over $100,000 on finishes, don’t you want a lighting package that’s going to compliment that?” Then we start grilling down into each room how much money they want, what color temperature, what that space is being used for. And once they get the answers to those four questions, they submit it to us and we’re able to create the lighting design.

Rob Stott: Gotcha. It’s no different, I think, than everything else because there’s tiers to everything. So it’s just, again, from the technical side, obviously, there’s a lot of similarities that they may or may not want to realize are there, but even when it comes to talking about the category to the customer, there’s levels of TVs, there’s levels of projectors, levels of speakers, how much are you willing to spend? It comes down to those conversations with the customer or with your client around developing that project and what it looks like. And if lighting is something that’s important to them and you’re not even asking the question, then you don’t even know.

Jennifer Kirkpatrick: Yeah. And you know what? You brought up a good point. So it’s funny, a couple of months ago I went to this event where there was a builder and we were on a panel. And integrators were asking the builder what they needed to do to get in front of the builder’s customer, how they convinced the builder to get on the project. And I think this builder had a great statement. He’s like, “You guys go into the weeds and you lose people.” Because the integrators want to talk about technology, they’re excited about it, they love it, and then after 10 minutes of talking about it, everyone has glossed over. They’re just like, “I don’t know. Just make it work. This is what I want it to do. You figure everything else out.”

So I think that sometimes integrators think that they have to be an expert on lighting in order to sell it, but really, if you’re asking those four questions, the homeowner just wants it to look good in the end. They don’t need you to explain what 14/2 wire is and what voltage drop is and what color shift is. They just want it right in the end. So I think rather than getting too deep into the technical details, that’s what we’re here for. Just talk about the features and benefits of lighting,

Rob Stott: Really, the development of the smart home and automation systems right there at the heart of how far things have advanced to this point in this category, it’s just another area of the home that these integrators were really born out of home theater, home entertainment, and it’s gone through a lot of change. And if anything, it should be something they’re comfortable with at this point, or if they’ve been hesitant to it, they realize that the writing’s on the wall, this space has to grow and it’s got to evolve. You’ve mentioned it a couple of times, it’s already done so within the form of shading. We’ve seen brands out there that have gone from being projector screen companies and what are they doing now? They’re getting into the shading category. So, not too difficult to see how lighting as a category itself as it’s gotten more technology-based and what it can do is that next frontier for integrators to tap into and take advantage of.

I love your point too, they don’t have to be the expert. They may know the technical specs of a said projector and what it can do and the lumens, and I’m sure that’s a phrase that means something to you, but maybe a bad example for a lighting podcast, but they don’t have to be as refined around the details of it. They have brands that they can lean on and partners that are there for them to help them navigate it. And really, at the end of the day, it’s about if it’s not creating that perfect theatrical experience for them in a home theater, it’s providing the right amount of lighting in a way that matters to the customer. And that’s really all it is at the end of the day.

Jennifer Kirkpatrick: And I could talk about lighting until five o’clock tonight, but the one thing that I want to get across-

Rob Stott: When we need it, right?

Jennifer Kirkpatrick: … is that the other channels that are selling lighting, they don’t offer a full service. There’s so many layers to getting lighting to the end user that there’s a lot of information lost from when the project starts to when it’s actually being installed. And that is the benefit of an integrator is that they are starting with the wiring, they’re specking the light fixtures, they’re installing the light fixtures, they’re programming and controlling it, and they’re maintaining it at the end. No other channel in lighting does that, and that gives the integrator a huge advantage when they go in to try to sell the customer on doing lighting rather than the customer relying on their electrician who, one, doesn’t want to touch controls, two, has to go buy the fixtures from an electrical wholesaler. Then there’s a miscommunication between the manufacturer to the distributor to the electrician. So it gets rid of all of those hurdles or obstacles that you might run into during the building process.

Rob Stott: It’s got to make the integrator more attractive to those architects and designers as well, right? The fact that that’s one less specialist that they have to turn to as a builder. If you’ve got someone that can do the lighting as well as those other systems within a home, not to say sorry to the lighting designers out there of the world, but if I have a one-stop shop as someone who’s putting a home together, that’s probably the way I’m going to go so I don’t have to pull in another partner and lose potentially more revenue or a cut of the project that I’m working on.

Jennifer Kirkpatrick: Yeah. And there are a lot of high-end residential homes that do rely on a lighting designer just because they want to make sure that everything is perfect. They got money to burn, but that still benefits the integrator because if the integrator can work with the lighting designer, the lighting designer doesn’t have access to buying fixtures. So that becomes, “Are you going to buy through an electrical wholesaler or are you going to buy through an integrator who’s going to be able to answer these questions and have a direct relationship with that lighting designer to make sure that the intent of their design is actually implemented in the field?”

Rob Stott: No, it’s awesome. Just a cool space too, right? I think your average consumer’s going to think about lighting, and it’s like, “Oh, well, the light that I got to replace above my washer dryer,” or something like that, but there’s so much more to it. Maybe that’s a future interview, the different ways lighting actually impacts the experience within a home, but cool to dip our toes in, I think, right?

Jennifer Kirkpatrick: Yeah. No-

Rob Stott: We can.

Jennifer Kirkpatrick: … when you’re ready to go down that path, I’ll show you some of our coolest projects.

Rob Stott: No, that’s awesome. Well, hey, this was fun to dive into it with you because, like we said throughout, it’s a new category to this space, but it’s something that integrators they need to get familiar with. So I appreciate you sharing some insights with us and starting to have that conversation at the very least for those that might have been unwilling or just haven’t thought about it.

Jennifer Kirkpatrick: Well, my pleasure. Thanks for having me.

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