When it comes to identifying changes in our industry, Electrical Contractor likes to go straight to the source. That’s why between Aug. 26 and Oct. 16, 2003, Electrical Contractor—in conjunction with Renaissance Research & Consulting, a New York marketing research firm—surveyed a random sample of 420 contractor subscribers in order to understand the role lighting plays within contracting firms.
Respondents were asked about experiences with the specification, sales and installation of lighting products and controls. (For survey purposes, “products” include lamps, ballasts, luminaires, etc., while “controls” exclusively deals with dimmers, timers, etc.) While these questions yielded an assortment of answers, one thing is for certain: many changes are taking place in the industry.
Two become one
Thought of as separate entities by manufacturers and their advertising agencies, lighting products and controls are melding into one. A whopping 86 percent of those surveyed said that at least some of their lighting work involves both products and controls, and 13 percent have a separate division specializing in lighting design and engineering.
When separate lighting divisions do exist, engineers are more likely to head them than other professionals (see Figure 1). Separate divisions are common in larger firms (10 or more employees) than in firms with a staff under 10. These firms typically do the work in-house, rather than subcontracting it out (see Figure 2).
In terms of types of lighting projects—products and controls, products only, and controls only—61 percent work on both products and controls. Half of that (31 percent) deal with products only, while only 8 percent deal exclusively with controls (see Figure 3).
Previously, manufacturers and advertising agencies viewed lighting products and controls as “two separate and very different markets.” However, as the study indicates, contractors see these as integrated markets.
Most specifications are for multiple brands rather than for a single brand. The study found that 35 percent or fewer of the specifications received by contractors are for a single brand (see Figure 4). This allows contractors to have wide discretion in brand choice for lighting products and lighting controls. Name, however, is important when it comes to specifying a brand of lighting controls.
For maintenance, service and repair work, and in new construction, electrical contractors play a major role in lighting product selection. They also play a major role in lighting control selection for these areas, although brand influences in maintenance, service and repair work is slightly higher than in the case of new construction.
One thing everyone can agree on are the reasons for originally specifying and substituting a brand for both lighting products and controls. These are:
Energy efficiency, distributor recommendation and warranty were the three least important factors for both (see Figure 5). However, the study found that distributor recommendation is important when a brand of lighting controls needed to be substituted, though not in the initial specification.
Two major differences emerge with regard to lighting products: availability and quick delivery is an important consideration when making a brand substitution, but not as much in the original specification. In contrast, reliability and reputation is a more important consideration in specifying lighting products than when making a brand substitution.
Lighting roles within a firm
In the near future, contractors expect lighting to play a greater role in their business overall. The study provided a list of four major project types—lighting products in general, lighting controls in general, security lighting products and controls, and safety/emergency lighting products and controls—and asked respondents if these areas would increase in importance.
Forty-five percent expected the importance of these project types to increase “a little,” while 25 percent expected their importance to increase “a lot.” Larger firms were more likely than smaller firms to predict that most of these types of lighting will increase in importance “a lot” over the next few years.
The study also found that high intensity discharge (HID) fixtures play more of a primary role in outdoor and roadway applications than in indoor lighting. Respondents reported that 62 percent of the fixtures they purchase, specify and install for outdoor applications are HID. HID fixtures are used for roadway applications 42 percent of the time and 23 percent of the time for indoor applications.
In addition, half of the sample expected the proportion of HID fixtures for indoor and outdoor applications to increase over the next three to five years (see Figure 6). At this point, HID use is higher in larger firms than in smaller companies.
On average, the study found that lighting products account for more revenue than lighting controls, at 30 versus 15 percent respectively.
Similarly, at the same percentages, indoor work accounts for a larger percentage of revenue compared to outdoor work. Interestingly enough, lighting has more influence over revenue for lower revenue firms than those with annual revenues of $1 million or more (see Figure 7).
Lighting for new construction plays a bigger role to firms with annual revenue of $1 million or more, compared to firms with less revenue. However, lighting for modernization and retrofit and maintenance, service and repair plays a larger role to lower income firms than to their higher income counterparts.
As for as lighting maintenance projects, only one-third of firms said they had any at all, and these on-going projects are being conducted in larger-staffed firms.
A changing industry
The electrical contractor used to be thought of as an installer only, but now it is clear that the contractor is also specifying. Contractors are integrating lighting controls with other building controls—50 percent of those surveyed said they “occasionally” integrate, while 14 percent said they “often” do.
Contractors are more involved in residential projects than ever. The study found that firms derive an equal percent of revenue from residential as from nonresidential controls projects.
Contractors are also willing to spend money to save money. Fifty-one percent said they are willing to pay up to $90 for a lighting product if it would save them $100 in labor costs.
The role of the electrical contractor is changing; hopefully this survey has provided some insight into how. To ensure no one is left behind, Electrical Contractor will soon be updating the lighting survey. Stay tuned. EC
HAYDEN is a former associate editor of ELECTRICAL CONTRACTOR.