Konkana Khaund's Blog


Making LEDs Accessible to the Consumer

30 Oct 2013 | by Konkana Khaund
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In September this year, Philips lighting announced its ambitious plan to collaborate with retailer Staples to bring LED lighting within affordability and accessibility to the general consumer. This partnership with Staples will see Philips’ Energy Star-rated LED products retailed across 360 Staples stores in North America. The complete portfolio of products to be made available to the consumer is expected to include 60, 75 and 100-watt LED equivalents from Philips, in addition to the latest Philips Hue lighting systems. For those from the building technology industry that frequent Lightfair every year, this would ring in some familiarity. The product bagged a Lightfair 2013 innovation award for Philips (recognized with the Judges Citation Award and also as the winner of the dynamic color category). Utility rebates that could accrue instantaneously from the use of these products will make it attractive to the consumer. Besides the ability to pick the product off-the-shelf from familiar retailers, virtually eliminate recurring replacement expenses, and drastically reduce electricity consumption are certainly demand boosters.

While this has been on the agenda of majority of LED suppliers for some time, it is only in the last one year that some of these have come to fruition. Enabling suppliers to get closer to their strategies are a host of innovations in the area of lamp and luminaire design, component design, thermal management, tuning and color rendering, among others. It is the lamp designers and materials companies that are ultimately enabling the change. For Philips, having Lumileds as a vertically integrated subsidiary within the company perhaps makes it easier to achieve their innovation and time-to-market agenda around these LED products. However, that is not a determining factor when other suppliers are considered. GE Lighting for instance, is moving ahead with its innovative LED products without any in-house manufacturing. GE’s Reveal category of LED lamps also boasts of some of these innovative properties mentioned above. However, there is one aspect of Reveal that could resonate better with the average consumer, if the price is set attractively (Reveal is still among the premium set of LED lamps marketed today) – the legacy lamp look. Behaviorally consumers are more inclined to pick something off-the-shelf that resembles what they already use. As an average consumer I am no exception to this. And like me, there are thousands out there that have wanted to make the switch to LED, but felt it was somewhat alien to what we knew for a lamp.

Now coming back to the point of affordability, one needs to subjectively consider what that threshold would be. First of all, being able to pick the products in a do-it-yourself (DIY) package from a regular retailer/supermarket makes it clear that we are indeed getting closer to affordability that we think. And this is not just facilitated by innovations and LED suppliers’ strategies. Initiatives from retailers are equally important to make this happen. Let us take the example of IKEA for instance. Walking through the nearest IKEA store, we have all probably heard their public announcement system from time to time blurting out their commitment to sustainability, and that they are revamping all store lighting, as well as retailed lighting products to LEDs by 2016. Not surprising that in the last one year I have seen more LED lighting options within attractive price points at IKEA that I have felt compelled to purchase. They are aesthetically appealing, consumes fewer than 5 watts in actual consumption, and best of all DIY. The life cycle cost is next to nothing when I consider what standard halogens or even CFLs would entail.

But a $10 price tag on a retail store LED product may make IKEA LEDs seem like a premium option. In early March this year, North Carolina-based Cree, Inc. announced that it has finally broken the $10 barrier in LED pricing with its 40-watt equivalent warm white LED ($12.97 for the 60-watt warm white replacement and $13.97 for the 60-watt day light). These bulbs reportedly save 84 percent energy compared to incandescent, come with a 10-year warranty and are exclusively available through the Home Depot. Clearly retailers like Home Depot are taking a diligent step to work with their manufacturing partners to help consumers make that switch. And at a price point of $10, it is not just an experimental switch, but a reason to upgrade the billions of energy wasting light bulbs currently in circulation.

And just this month, Walmart announced that it is introducing its Great Value line of high-efficiency LED light bulbs for under $10 in its U.S. stores and online. The array of products includes 26 different types of bulbs, with the least expensive – a non-dimmable 60-watt equivalent – selling for $8.88, and the dimmable version for a dollar more. In addition to the Great Value line, Walmart is also offering a new dimmable GE LED for under $11. The Walmart and GE LED offerings will certainly help broaden the market for cost-effective LEDs along the lines of what IKEA, Staples-Philips, and the Cree-Home Depot partnerships are expected to do.

The $10 price point for North American consumers may seem attractive enough. But when you consider the millions of consumers in the developing world, some of whom are yet to switch on their first light bulb, and where LEDs hold tremendous potential for bringing about change, affordability would take on a whole new definition. The innovation in design, output and components of LED hold far bigger promise for such consumers. And suppliers are taking full advantage by combining these with the affordable mass manufacturing capability of designations like China. For instance, the online, as well as brick-and-mortar retail market for LED products in South Asia offers extremely affordable prices. The appeal factors do not differ much in those products from their branded North American counterparts – legacy look and feel, easy installation, extended life with virtually negligible total cost of ownership. Massive government push and proactive support from not-for-profit agencies are helping fulfill the lighting dream in remote parts of Asia, thanks to breakthroughs in LED technology. For the general consumer there, finding an affordable and more efficient replacement, which also resembles existing products makes LED replacements a lot easier. Local hardware shops and small lighting specialty stores make up for the absence of the giant big box retailers. But the variety in products and price points makes for little comparison to the limited repertoire of alternatives available in the North American context. Let me illustrate this with my personal experience. The range hood over the kitchen cooktop of my secondary home in Goa, Western India, needed its standard halogen bulb replaced. After searching for months for a replacement in the local market, my house caretaker finally found an exact LED 2-pin replacement for just $3 at a local hardware store. It would certainly do the same job as its branded counterpart sold in a large North American big box retail store. This convinces me beyond doubt that no matter how affordable we think we are getting to LED price points, there is still room for more. And that manufacturers need to look at best ways of marrying the technology innovation aspect of LED with smarter manufacturing and channel management to allow consumers to reap the lasting benefit of switching over to LED.

For North American consumers who are comfortable buying products online, the price points are certainly getting more attractive. Lemnis, for instance, unveiled three new lines of its Pharox LED replacement bulb. The 200-lumen Pharox BLU is priced at $4.95, and the 350-lumen Parox Blu for $6.95, sold exclusively through the company’s website. Like Lemis, there are several others in the no-frill, non-dimmable consumer LED category that are available at highly attractive prices online. Though, it may take a little while for average consumers to order an LED replacement bulb online, just as easily as they would order other replacement products for the home, such as appliances. The alien aspect that I alluded to earlier which most consumers associate LEDs with, could continue to work as a deterrent. And that makes the off-the-shelf versions far more within their accessible range, allowing them to see, feel, and question someone at the store before they buy.

A recent U.S. Department of Energy forecast predicts that LEDs will represent 76 percent of the general illumination market by 2030 in North America. At the present rate of innovations and price competitiveness, it may not be surprising to surpass that target well within the next decade. Either way, it appears that the time of the LED light bulb is finally here. Karl Braun may have discovered the semiconductor by mistake. But breaking output, quality, technical, and most importantly price barriers in LED are outcomes of far more planned and serious initiatives to achieve each of these breakthroughs by industry participants, who clearly understands how LED fits into the vision of the future of this planet. Their ability to fit in the last link – bringing consumers closer to the product, is perhaps by far the most rewarding achievement of these initiatives.

Comments:

It's Lemnis, not Lemis.

Posted by Veljko Roskar | 18 Dec 2013

 
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