Impact Analysis of Covid-19
The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.
Market Insight- U.S. Lighting Product Market
Lighting products or lighting fixtures are products used for deliberate illumination of light to achieve aesthetic and practical results. Lamps and lighting fixtures are artificial lighting products that are used in residential, commercial, outdoor, and industrial settings. Lighting fixtures such as ceiling fixtures, recessed lighting fixtures and strip light fixtures are widely used among different end-use application, in the U.S. The recent past has witnessed an increased use of LED lamps and bulbs in numerous countries, owing to energy-saving efficiency and extended operational life span, which is around 10 years. LED lamps are being used in almost every application across the U.S.
The U.S. Lightning Product Market was accounted for US$ 221.8 Mn in terms of value and 4,829.5 Mn units in terms of volume in 2019 and is expected to grow at CAGR of 4.9% for the period 2019-2027.
Market Dynamics- Drivers
- Growing adoption in non-residential building construction is expected to drive growth of the U.S. lighting product market
Rising demand for lighting fixtures among building contractors for hotels, offices, and commercial structures are expected to drive the market growth. Non-residential construction accounts for the largest amount of lighting products consumption in the U.S. and is one of the most promising segments for the growth of retail lighting product sales in the U.S. According to the U.S. Census Bureau published a survey named - The Value of Construction Put in Place Survey (VIP) that provides monthly estimates of the total dollar value of construction work done in the U.S., the VIP for non-residential building construction was US$ 430,053 Mn, from US$ 393,934 Mn in 2015. Hence, these factors are expected to drive growth of the U.S. Lighting product market during the forecast period.
- Increasing demand for LED lighting fixtures is expected to propel the U.S. lighting product market growth over the forecast period
Adoption of LED lighting in the U.S. has increased significantly in the recent past. This is owing to high energy-efficiency and extended life span of LED lighting fixtures. Moreover, LED lightings are brighter and more aesthetic as compared to conventional lighting products. LED lighting can be used in a variety of buildings such as commercial, industrial, and residential. Moreover, they are now being used for streetlights, in order to save costs and energy. Thus, these factors are expected to support the U.S., lighting product market growth over the forecast period.
Market Dynamics- Restraints
- Significant decline in new residential constructions is expected to hamper the U.S. lighting product market growth over the forecast period
In 2016, new-home (residential) construction in the U.S. unexpectedly declined. According to the U.S. Commerce Department report, housing starts, which is an economic indicator that reflects the number of privately owned new houses, dropped 3.8 % to a 1.1 million annualized rate, from a 1.14 million pace. This slowdown in residential construction is expected to reduce the demand for lighting fixtures and thereby hinder the U.S. lighting product market growth in the near future.
- High initial cost of LED lighting fixtures is expected to restrain growth of the U.S. lighting product market during the forecast period
Although there is high demand for LED lighting fixtures, the initial cost for installation of these products is significantly higher than conventional lighting products. It is also true that LED lights have an extensive lifespan, small business owners are still unwilling to adopt LED lighting products due to high initial costs. Thus, these factors are expected to hinder the U.S. lighting product market growth over the forecast period.
- Advent of solar-powered lighting product can present major growth opportunities
Introduction solar-powered lighting products have started to gain traction among end users, owing to significant cost-savings. Solar-Powered street lights are being deployed and tested in parts of the U.S. For instance, Las Vegas plans to utilize renewable energy throughout the city by using solar and kinetic powered street lights. Many key players in the market are focused on capitalizing on this opportunity by providing a range of solar-powered decorative lighting products such as lamps and decorative fixtures. Moreover, the U.S Federal government’s continuous efforts to minimize energy consumption is expected to give a boost to solar-powered lighting products in the country.
- Introduction of smart lighting offer lucrative business opportunities
Smart lighting refers to the technology that includes automated controls and high-efficiency fixtures that make proper adjustments suitable to surrounding conditions such as occupancy or daylight availability. Smart lighting is typically installed to save both energy and costs, thus it has gained significant traction in various industry verticals. Residential as well as commercial building owners are adopting smart lighting, in order to provide better aesthetic view and reduce energy consumption.
Source: Coherent Market Insights
- Rising adoption of outdoor LED floor lights
Floodlights are used in commercial applications to light things like parking lots and property grounds to deter potential theft. More and more business owners turned to LED bulbs for these lights in 2015 in the U.S. Rising energy efficiency standards in the U.S. has increased the adoption of LED light in outdoor facilities, which subsequently has limited production of standard incandescent bulbs. Moreover, LED lights are weather-resistant and are unaffected by temperature changes. Low maintenance required for LED bulbs and tubes is expected to drive the market growth in the near future.
- Growing trend of customizable lighting fixtures
Customization in terms of shape of lighting, color and more importantly the quality of light is being witnessed by the retailers in the lighting market. Moreover, geometric lighting fixture that has minimalist aesthetic is also in trend among firms. Since it offers modern as well as a contemporary look to the room or a hall it is liked by most of the professionals. Moreover, big or oversized fixtures are in trend where they act as centerpiece of the room and provide the entire room more attractive ambiance.
Value Chain Analysis
- The supply chain management plays an important role in growth of the retailers operating in this market. In order to get more productivity and better gross margin, efficient supply chain management particularly inventory management is essential
- Warehouse is the backend support of the retailers. Continuous examination of the warehouse to check the availability of stock is vital for the retailers to competently meet the demand for the products. Various software are deployed to manage the warehouse. Software helps improve the process of moving freight off trucks, into receiving areas and from receiving areas onto customer-facing shelves
- For instance, Home depot is one such retailer that strongly focuses on its stock. Each Home Depot store stock about 30,000 to 40,000 different products and provide an enhanced selection of about 700,000 products that is available through company's website. Moreover, in order to speed up order pick up time and save on storage and costs the company launched two major programs, including buy-online ship to store and buy-online pick-up in store
- Nowadays, retailers are adopting omni-channel distribution network. They distribute products through brick and mortars stores, online-stores, various clubs, contact center and on-site platform. The omni-channel distribution network help the retailers to efficiently meet the demand for the product and thereby remain competitive in the market.
- Value can be created at each step of supply chain management. From procuring quality products to stocking them and making it available to the end-user, each step is important for the retailers and value addition at each step, makes the whole supply chain competent enough to accommodate the demand
In forward and backward integration scenario, backward integration are often adopted in order to improve efficiency and cost savings.
In U.S. Lightning Product Market, by Application, Residential Lighting sub-segment dominated the U.S. market in 2019, accounting for 45.7% share in terms of value, followed by Android and Windows respectively.
Source: Coherent Market Insights
Major companies operating in the U.S. lighting product market are Menards, Acuity Brands Lighting, Inc., Signify Holding, LSI Industries Inc., The Home Depot, Costco, Lowe's Companies, Inc., Wal-Mart, Sam's Club, Target, and Bed Bath & Beyond.
- Major companies involved in the market are focused on mergers and acquisitions, in order to enhance the market presence. For instance, in September 2019, Acuity Brands Lighting, Inc. acquired The Luminaires Group, a provider of specification-grade luminaires for institutional and commercial markets.
- Key players in the market are involved in merger and acquisition activities, in order to gain a competitive advantage in the market. For instance, in March 2020, Signify Holding acquired Cooper Lighting Solutions to enhance its position in North American lighting market.