The mattress business has Casper and Purple and a whole host of direct sellers. Warby Parker reinvented the eyewear industry with its direct-to-consumer model. And in home textiles, companies like Boll & Branch, Parachute and others are following the same business strategy.
But in lighting? Surprisingly, perhaps, the business of selling lamps and lighting fixtures has yet to attract a high-profile direct-to-consumer seller.
The lighting business has not been disrupted…yet.
As DTC (direct-to-consumer) sellers increasingly gain share and popularity throughout the retail world, lighting has so far been spared the kind of disruption that is redefining the way many products are bought and sold.
All of these direct business models essentially work along similar lines: a company sells its own proprietary brand of product with some sort of distinctive “unique buying proposition” such as better quality materials, a more eco-friendly back story or a Made in the U.S. heritage. Sometimes the company is arranging manufacturing itself, other times it is working with suppliers in the field.
For the most part the products are not necessarily less expensive than similar products sold through more traditional channels though often the sellers do tout a value aspect in their marketing.
All of these sellers begin online where start-up costs are lower and many, like Casper and Warby Parker, then move into physical store operations. The latter, which expects to have 100 stores by the end of the year, has said in interviews that it now gets more than half its sales from its stores rather than from online.
None of these disrupters are to be confused with two other types of online sellers. E-commerce companies like Wayfair and Lightingdirect.com sell a variety of brands but don’t represent themselves as vertical companies bringing a new twist to the marketplace. And lighting suppliers who sell their own products directly – in addition to selling through conventional third-party retailers – are pursuing a different game plan.
Why the DTC model has not turned up in lighting may be due to several factors. One is that lighting remains a SKU-intensive business and most of these start-ups have very narrowly focused product line-ups. The absence of brands may also come into play. Finally, when it comes to hard-wired fixtures, the open-the-box-and-use-it mentality that dominates these other product categories may not translate as easily to lighting.
With home furnishings in general being one of the more undeveloped business categories online – an estimated 13% of sales were done through e-commerce last year, versus 24% for apparel and 53% for office supplies – it stands to reason that at some point lighting will come into play for DTC disrupters.
In a recent article in Adweek, marketing exec Katherine Hays laid out why it’s inevitable…and what existing companies should be doing about it:
“Big brands who still rely on traditional marketing tactics should take a page from the DTC playbook to ensure future success.
“You need to build your own audience instead of relying on third-party platforms to do it for you because that’s just not sustainable long-term.
“You can then re-publish user-generated content (which we know out-performs brand content by up to 350 times) and engage with it on your social channels, using the social networks primarily as distribution channels to bypass the platforms’ back-end data monopoly.
“Finally, you can collect data on the users sharing content to help build one-to-one relationships and sell directly to your current customers, which will drive direct sales through consumer sharing.
“Brands of all sizes can learn from upstart companies hanging the game. By pivoting their marketing strategy and building sharing seamlessly into their products, controlling brand content and taking ownership of the critical first-party data, big brands can still thrive in today’s digitized world.”
In other words, go direct…before somebody else does.