FILLING THE VOID LEFT BY INTELECTRON'S EXIT.
Industry executives attribute Intelectron's demise to its losing battle with cheaper imports. While Intelectron's goods were manufactured in the Far East, as are most lighting products, the company had allowed too much of its business to be done in the low-end goods, where profit margins are razor-thin or nonexistent, sources said.
To be sure, the security lighting market is a competitive one. But survival of the players depends upon how well they develop the wider-margin, higher-priced segments of the business.
The two largest suppliers of security lighting, Heath/Zenith and Regent Lighting, are specialists and have invested heavily in product development and feature-rich merchandise. Other companies, recognizing opportunities in the market, have entered the business with single items or small programs. They include Catalina Lighting, IDC and Satco, among others.
The overall residential security lighting market, which includes motion-sensing lighting, decorative motion sensors and dusk-to-dawn lighting, is between $250 million and $300 million at retail, according to industry estimates.
The motion-sensing security lighting category is relatively young, having evolved over the past decade. Market penetration is still low, estimated at 33 to 35 percent.
The fastest-growing segment is the decorative motion-sensing area. Suppliers have found ways to hide the motion sensors in decorative fixtures, and developed innovative features such as a dim mode for accent lighting, override switches, power outage protection, and easier installation.
"I think the category will continue to grow at double-digit rates in the next five to ten years," said Phil Cole, president of Heath/Zenith, based in Bowling Green, Ky. "There's ample room for growth and if you look at the new housing market, there's another area that's opening up to this segment."
Regent Lighting's consumer research showed that consumer confidence had declined as a result of low-end, low-quality security lighting that has infiltrated the market, but that consumers were looking for better quality merchandise and would be willing to pay more for it.
"Our product development efforts are focused on innovative, unique features that will allow the retailer to make more money and better profit and provide the consumer with better-quality product," said David Springstroh, vice president of marketing for Regent Lighting, based in Burlington, N.C.
"We're investing in the business and can offer full lines of product, supported with good packaging, merchandising and retail P-O-S material to step the consumer up to higher price points and better features," Springstroh said.
He pointed to feature-rich products at retails in the $59 to $69 range, whereas the commodity merchandise hovers around $10.
Earlier this month, Menards advertised Intelectron -- an open-bulb motion-detector light -- for $9.72, and a shielded bulb motion detector for $17.49. The same week, Builders Square featured in its circular Regent's open-bulb motion-activated security light for $10.99 and shielded-bulb security floodlight for $23.99.
In the mercury vapor security lighting segment, which had become a loss leader for retailers who sold it for a couple of dollars below wholesale, Regent Lighting developed a good, better, best program. Where there had been very little choice, the company now offers high-end, industrial-quality mercury vapor with protective shield, adjustable photo control, and other features not previously available.
Where the old traditional mercury vapor lights retail in the low $20 range, the new merchandise commands retails of $60, with wide margin for retailers, Stringstroh said.
Heath/Zenith's strength is in the motion-sensing and motion-sensing decorative segments, and is focusing its efforts on enhancements in that area, according to Cole.
"Consumers want designs and colors that blend in with the decor of their homes, from traditional lanterns to more ornate fixtures," Cole said. Over the years, suppliers have stepped in with more compact fixtures, halogen bulbs, concealed sensors,
Some of Health/Zenith's products have a "dual-bright" feature that turns the light on dimly at dusk to accent the house, and goes on fully when it detects movement in its sensing range.
At the National Hardware Show in Chicago in August, the company will unveil a line of low-voltage landscape lighting with motion sensors, and ones that easily mount under eaves for decorative sidewash accent lighting.
Regent and Heath/Zenith said they've picked up sales in retail accounts formerly serviced by Intelectron. But so have other suppliers, such as IDC, Catalina and Satco.
"The security lighting product line is a growth area in the market and it's one of the niche categories we're trying to build," said Brian Brandes, vice president of Satco Products, based in Brentwood, N.Y.
The company's first venture in motion sensor lighting, unveiled this week at the Dallas Lighting Market, is cast aluminum halogen flood lights in single-light and two-light models, in mini and large size, with a variety of features. The mid- to better-quality line has such features as hinged frames for ease in installation and bulb changing; delay and daylight controls, manual override, and other features.
"We addressed it with a full family that is packaged with 4C graphics, destined for the retail showroom business, where we have strength," Brandes said. "The bottom line is that Regent and the others are specialists. That's all they do.
"We put a line together and can give retailers a variety of lighting products, from track to domes, desk lamps, and electrical accessories," Brandes said.
IDC, a low-cost lighting importer based in Fort Worth, is also bringing to market value-priced motion-detector lights for home center retailers. The company will show merchandise during the lighting market this week.
Catalina Lighting's marketing manager Bruce Monahan said: "We've always had a few items in motion. We've picked up some of that market share.
"Because of the basic nature of the commodity business, we've haven't gone into it in a big way. We haven't taken it to the next level to develop new items. We didn't invest anything in new molds."
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|Title Annotation:||security lighting market|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Jun 22, 1998|
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