LED invasion changes the pattern of big stores in the lighting industry

[Source: Gaogong LED 's " LED Lighting Channel" magazine, 2013 , issue 3 (Total 39 ) reporter / Zhou Jianhua]

Increased polarization

"Commercial cooperation pays attention to the door-to-door, the long-established big store is not fast-changing or scrupulous reputation may not find new LED brand cooperation, but the big store controls the local high-quality display and distribution resources, always the middle and high-end LED brand can not be bypassed by local Threshold." Wang Wanchuan, general manager of Xiaobailong Lighting said. Needless to say, the combination of LED and big stores has had a huge impact on merchants, stores, manufacturers and even the entire lighting industry.

With the continuous development and penetration of LED lighting, the brand awareness of cooperative merchants has increased, and the gap between businesses has become larger and larger. The stronger the strong, the weaker the weaker, the stronger the merchants operate in the mode of multi-brand experience of the big store, increase the competition for the market, form a powerful scale force, and pose a strong threat to small and medium-sized businesses. Some weaker and poorly-operated businesses are caught in the situation of customer loss, or give way to “strength” or force themselves to grow bigger. It is natural that some small stores face elimination or being annexed. This has further led to a more serious business polarization.

The big store is making a move, and the small shop is profitable. Dealers who can operate the LED multi-brand experience model are not making a small profit, but relying on strong strength to win more benefits. The store is bigger, and it can stand out in the same industry. It reflects its status as a river and lake. The LED brand gathers more and can dominate the upstream brand resources, and it is easier to profit from the competition in the engineering channel and win the favor of more consumers. Seize a larger market share.

“The big store has a sensational effect, which can attract customers' eyes wide and gain sales while gaining sales. At present, in addition to engineering, LED retail sales and circulation products are becoming more popular. Can form a strong channel effect, can seize the opportunity in the invisible channel, occupy more and more market share in the local area, and gradually form a monopoly, monopoly resources, monopoly channels, etc." A distribution of research on the big store model Business evaluation of the benefits of LED into the big store.

Some powerful merchants saw that some merchants tasted the sweetness of big stores, and they also actively went to the operation of Ma Dadian, embarked on the road of scale expansion, and established the status of “one party overlord”. In the product line exhibition extension and corporate cooperation, LED is the most preferred.

“The traditional business of crystal lamps that we used to do will not fall, but the added LEDs will expand the storefront to integrate resources. We also hope that the store area will be bigger and the market influence will be stronger.” Jiangxi Nanchang Fu Shi Lighting The person in charge told the reporter of "Lighting Channels".

Stimulate the store upgrade

Big stores and stores are also winning by scale, with large areas and complete products. But the two rights and responsibilities are different. The former's powers and responsibilities are dealers, mainly operating products; the latter's rights and responsibilities are the stores, to provide business platforms, earning rents and management fees. With the gradual enhancement of the strength of the business, some businesses call the board store to operate the big store in the hypermarket mode. Whether it is renting a large exhibition area in the store, operating a big store, or building a big store outside the store, it has a certain effect on promoting the development of the store.

In 2012, Shandong Linyi Tianma Lighting re-installed a large exhibition hall of 3,000 square meters, officially launched the channel chain brand strategy. At present, more than ten LED brand enterprises have signed strategic cooperation with them. Others such as Chongqing Lampat, Achao Lighting, Zhemeng Chain dealers, Hongli Lighting, Zhejiang Huace and other chain dealers, even Shilihe Lighting, Sichuan Quanli Denghuanggang and other large chain stores have begun to divide the area to introduce LED brand monopoly. Each terminal chain model is a 'sales dealer' of the provincial capital or even the provincial capital. There are thousands of distribution outlets for perennial cooperative transactions, so the deterrent power of its regional market to form an absolute dominant or even monopoly position should not be underestimated.

The emergence of LEDs has brought closer interest and convergence between big stores and stores. Some large stores choose to enter the hypermarket, which can promote the development of big stores to a certain extent.

“The role of the well-known big store in the store is even more powerful. It helps the store’s own brand to improve and the benefits increase.” The person in charge of the investment in Huanggang, Chengdu, said that for the store, the store has Great plasticity, strong channel effect, passenger flow, high profit and other advantages, can drive the flow of people in the store as a whole, and expand the visibility of the store; large merchants can help the store to gather people and business, drive the prosperity of the store, and the store After the boom, many merchants who have not been stationed before will see the strength of this store, and then choose to enter, this is the potential benefit binding point between the big store and the store.

At present, more traditional lighting stores are like the department stores of the year, the market entry threshold is low, the quality of the products being operated is uneven, the management is loose, the after-sales service is not guaranteed, and the awareness of brand promotion is weak. This is not the first choice for LED companies and distributors who are keen to create regional reputation.

Naturally, there are also many large stores in the markets across the country that avoid professional lighting stores. Some strength merchants will choose to build a 1-2 storey single store in a lot of people, and then divide the LED zone. Their complete products, special services, strong channel resources and high sales volume will naturally drive some merchants who operate the big store model, “depending on the gourd painting”, followed by avoiding the store and choosing to build their own stores. Bringing certain threats to the survival of the store.

In order to seek development, the store will upgrade itself to a certain extent. Moreover, large-scale advertising campaigns, brand promotion methods, and effective means of integrating resources will inevitably affect the operation of the store from the side, further promote the market positioning of the store and its norms in terms of services and business policies.

Manufacturer or more equal

In the past few years, some people have made such a hypothesis: domestic lighting dealers form a close-knit "China Lighting Dealers Alliance", they only need to tighten their belts for two years, two years, and China's domestic sales. Lamp manufacturers will fall into pieces. It is enough to see that dealers have a strong voice in the Chinese lighting market.

However, with the rise of LED new brands and the growing power of LED store operators, traditional lighting businesses have begun to weaken, and large stores have increasingly controlled most of the voice of the Chinese lighting market. At this time, the relationship between the manufacturer and the merchant has also undergone a fission.

In the early days of the lighting industry, merchants had a limited voice, and most of them were passive in cooperation with manufacturers. The relationship between manufacturers is mostly the relationship between buying and selling. The manufacturers are in a dominant position. Generally, what is produced by the manufacturers, what the merchants sell, and the manufacturers are different. With the increasing brand awareness of manufacturers, especially the large involvement of LED brands, manufacturers gradually set their sights on channel development and maintenance, and manufacturers have established a relatively stable relationship, but because of LED cost, product, technology, and even The brand itself is constantly changing, and the changes and developments of mutual interests between manufacturers may break at any time.

When the LED operation of the big stores is prevalent, the equal dialogue between manufacturers will be further increased. The original weak position of the merchants was reversed, and the cooperation situation of equal and mutual benefit and two-way choice of the manufacturers appeared.

For the merchants, the store is big, and in front of the upstream LED brand enterprises, they can also honor the position of the right to speak with respect and dignity, and can strongly control the upstream brand resources, and the independent choice of the merchants will increase; for the manufacturers After the expansion of the storefront, some start-up companies need to rely on the brand effect of the merchants and the monopoly of the resources of the industry as their own crutches to expand the development of the enterprise.

"Cooperate with the big store, it is a real strong alliance, and at the same time act as a number of powerful brands, can drive each other, and finally achieve a win-win situation." Lin Jilin, deputy general manager of Mulinsen Co., Ltd. said.

At the time of the surge of LEDs, the words of the manufacturers' alliances appeared frequently in channel strategies. Old-fashioned companies such as Jonson Lighting and Pinshang Lighting proposed this slogan at the marketing conference. The vendor alliance is also the integration of the interests of the manufacturers, that is, the manufacturers are loyal to each other, look to the future, consider each other for each other, and consider the interests of the other party to achieve a win-win situation. It is reported that some manufacturers in the industry have begun to seek all-round cooperation with merchants to jointly fund, jointly manage and jointly operate stores.

After the store's store area has expanded and its strength has become stronger, some businesses have begun to start a new stove and develop into the LED manufacturing field, which has accelerated the integration process of the industrial chain. The mutual penetration of industrial capital and commercial capital makes businesses not only merchants but also manufacturers. The cooperation between manufacturers in management, channel development, information flow, capital flow and other aspects is closer, thus forming a strategic alliance relationship.

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