Flip the switch: light bulb rules hit retail
Aug. 1 was a fateful day for the lighting industry, marking the end of an era and the culmination of an energy-conservation-induced slow demise for the incandescent light bulb.
The new landscape presents an opportunity for dealers, according to lighting category specialists reached by HBSDealer.
Essentially, incandescent light bulbs—the vast majority of them, anyway—have been pulled from the shelves, thanks to a new efficiency standard that requires light bulbs to produce a minimum of 45 lumens per watt.
“Changes in the light bulb industry have been ongoing, with efficiency guidelines in place since the 2000s prompting a gradual shift away from older incandescent and halogen technology,” said Alex Burcham, a merchant from Orgill.
“Dealers should clear their shelves of noncompliant bulbs and consider transitioning to LED options or resetting their bulb program,” he said. There are plenty of replacements and alternatives. And there is a bright spot to the adjustment. “Generally, LED margins are expected to be higher than older technologies,” Burcham said. “Despite lower unit volumes, stores could see increased profits by migrating to newer, higher-priced technology.”
Orgill, as well as other distributors, have been working closely with retailers and the vendors to prepare for the Aug. 1 deadline. Burcham said Orgill began communicating light bulb replacement options in January, the same time it stopped ordering non-compliant items. The distributor stopped shipping them in May.
A similar effort had been underway at Fort Wayne, Indiana-based Do it Best since the announcement of the regulations in 2022. The co-op has worked closely with vendor partners to create updated assortments, said Ryan Stopher, Do it Best merchandise manager for electrical supplies. And the co-op has also offered members resources to navigate the transition.
“Since the announcement of the regulation, we’ve seen an increase in overall sales,” Stopher said. “Newer technologies like LED bulbs have played a significant role in our positive sales numbers over the last couple years. General use of incandescent bulbs have been steadily decreasing naturally over the past several years as new lighting technology is perfected.”
While much has been written and discussed about the transition, there is still uncertainty around the kind of penalty a retailer might face if found to be in violation.
“The specifics of enforcement remain unclear,” said Orgill’s Burcham. “Past examples of similar legislation suggest that enforcement may be inconsistent.”
Do it Best’s Stopher said: “From what we understand, the Department of Energy will proceed with random audits of retailers potentially leading to fines for each offending product.”
Perspective of a retailer
In an effort to clear the shelves of noncompliant product, Memphis-based CNRG took an aggressive approach to markdowns ahead of the Aug. 1 deadline. In doing so, the retailer had an opportunity to refresh its entire light bulb offering, according to CNRG’s Craig Cowart.
The situation created what Cowart calls a “pivot point” for retailers. He shared with HBSDealer the following insights:
“We began referring to this section of the store as “lighting solutions,’ as opposed to ‘light bulbs.’ There are fewer traditional items being available and higher price points on longer lasting products means planograms do not require as much shelf space vs. programs five or ten years ago.
“Retailers should look at their valuable shelf space and determine what lighting solutions they want to make available to their customers. LED technology now offers brighter bulbs in many color choices, something we’ve seen customers request.
“We have also viewed the carrying capacity of high volume skus in our sets to ensure we represent enough stock on the shelf to handle more than 1-2 customers buying bulbs in a weekly order cycle.
“Lastly, trends point to customers wanting totally different lighting solutions—strip LEDs, string lights, decorative & vintage bulbs, under cabinets, and smart home options. All are excellent options to go along with the LED bulbs updates we are executing now in stores.”
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According to Stopher, information is the key to success in the business of selling light bulbs. High performing Do it Best members have the right mix for their customers, as well as POP materials and an educated sales staff to help customers make the right decisions.
“Watts, lumens, etc. are terms the everyday consumer does not understand,” he said. “Correct information and proper education will help everyone understand the long-term benefits of the new regulations.”
