Richard Taylor, Founder and Director of Graphic Strategy, shares findings from a recent survey of the lighting industry on the impact of Covid-19, and what it means for the industry going forward.
It is hard to imagine a more challenging series of events. Starting with modest concern over travel and meetings back in January, within 10 weeks our capacity to meet up, to visit clients and sites, to audit suppliers and at a more personal level, even to see family and friends or go to the supermarket to collect dinner has been dramatically altered. I appreciate that this isn’t the same everywhere, and of course hope, like quite a few million other people, this won’t last too long or the impact be too deep, but we have, unequivocally, entered a new era and with that, some very fundamental changes in the way we can, and very possibly also will do business in the future.
I’m an engineer, not a doctor, an epidemiologist, or a virologist. I’ve worked in and around the lighting industry from almost 30 years, and so whereas I can only report anecdotally about the Covid-19 situation, I can report, from the coal face, what’s happening and where people are looking. I had the idea, back in late February, to ask my network via LinkedIn and a few other channels, how they look at the situation, and actually wanted to get this article written much earlier, but as the situation evolved, I got more and more valuable insight that I would like to share today. More than 400 people got in touch with me, initially via the survey as well as by email and then more and more Skype, Zoom or Teams calls. The sheer volume of input humbled me, and I’m truly grateful to everyone who took the time to contribute. Your opinions have helped form this piece.
Why did I bother?
Honestly, I love numbers and current affairs! I was in China in early January this year, and by chance, managed, quite literally to “miss the boat” back from my location to Hong Kong airport for the flight home. Luckily I had a bit of time, so with the help of some Chinese friends, I was able to get a bus from the border to the airport. Unlike the normal process however, I went through three temperature checkpoints, and also a health checkpoint, and more people than usual were wearing masks. In the times of the SARS outbreak, when I was stationed in Hong Kong, I remember the measures taken, and these struck me as being similar. What surprised me was not the controls in Asia, but much more the complete absence of any controls upon my return to London later that day. When I got home, one of my first tasks was to work out how bad this situation could get and to order a few bottles of hand gel to go with the rest of my household resilience kit.
The lighting industry never gets much attention – we may be only 2–5% of the total investment cost of a building, but other sectors always seem to get more attention. I decided, therefore, that a lighting-centric survey to gauge the opinions, outlooks and thoughts of our branch would be a neat idea. I hope, as you read this, you agree!
Since there are a lot of statistics in the findings, I’ve tried to separate them instead of just showing a big Excel chart, so of the 403 respondents, where were you from?
Ensuring representative feedback is also good, so I then filtered the results to work out the backgrounds of the generous respondents, and ended up with what I hope is a good mix of people who understand the sector, and also understand what is happening in the industry.
Crisis or business as usual?
It would appear that the lighting world has gravitated into three main groups: optimism, resignation and despair. The timing for a global event on this scale is never going to be good, but the Christmas/Lunar New Year/Product launch/Covid cycle has hit supply chains especially badly. With roughly six weeks from the world’s lighting factory to the market, and approximately the same six weeks between the situation in Asia settling and that in Europe exploding, the logistics of light never had a chance. Some things happened as usual – I was actually at Euroshop and noted the occasional face mask but didn’t really see anything untoward during the trip – three weeks later, meeting some clients and friends over in Frankfurt, the situation couldn’t have been more different with deserted airport concourses and 80% empty hotels.
Above all, what is now common was already in the early stages – a sense of concern, even worry about speaking to the “wrong” people or being in the “wrong” place and risking exposure inadvertently to this terrible new-age pathogen. On the streets of the UK, and indeed from my network I believe many other cities around the world, there is a mistrust of “others”. Who has the virus? Who could infect me? Should they be out? Are they panic buying? Equally we see a lot of happy things, such as companies working incredibly hard with limited workforces to supply key projects, obviously at the moment especially in medical fields.
How long do people believe this will continue?
In honesty, those who answered early in the process were naturally more optimistic than those who were answering in mid-March! The government position of many European states was alarmingly relaxed until the numbers started skyrocketing back in early March. If I analyse the data as a time series, the curve looks quite similar to that of the virus, with the expected disruption share doubling in the “most of 2020” category during the past three weeks.
Disruption has many facets that are temporary and variable. At the start, it was the loss of freedom to fly, to drive, to travel. This has rapidly evolved to a more fundamental level of shops, bars, restaurants and “non-essential facilities” being closed down and the excitement isn’t buying a new outfit, but working out if your local store still has bread or salad on the shelf. When the winter weather is bad, and the police advise against all “non-essential” travel, the roads don’t look much emptier than usual, but adherence seems to have taken on a new level of responsibility, partly due to enforcement, but equally due to self-preservation instincts. Equally isolation-fatigue, even amongst some of my contacts, set in during early May and people are electing more liberal interpretations.
The disruption for lighting is also self-evident. Many of my dear friends, some of them ex-colleagues and some working for clients of mine are feeling personal disruption. Their places of work have shortened, in some cases radically, their working weeks. There are factory closures, extended home office demands, and, of course, some clear challenges to what the market needs and when. Building sites are suffering from massive disruption – many are still open, or soon will be, but recovery is slow.
As countries emerge from this crisis, one of the key areas of investment by the governments will be in infrastructure to help restart the economy. I’m not suggesting that this will lead to a bonanza of lighting business, but I do think that it’s more than plausible to expect businesses to think about how a facelift – for which lighting upgrades are a great idea – can help them appear as the phoenix arising from Covidian ashes.
Changes for the way we get information?
One issue which was significant was the willingness to go to the bigger shows.
Obviously we now know that Light + Building is not happening until 2022 and that the US LightFair is also off the cards now until it comes to New York in 2021. The other big Asian shows seem unviable due to travel restrictions and therefore people need to get their info in different ways.
What interested me was the clear shift that roughly half the respondents were willing to go to shows at a new time, and half were not, or were at least unsure. Mapping the data in this area against the background provided insight. The “show fans” were, to 84%, occupied within the lighting manufacturers, and so “must” go, whereas for those with a choice, the willingness to get on a plane and visit Frankfurt, Hong Kong or Las Vegas is extremely limited.
It has been reported on, comprehensively, that the silver lining of the Covid-19 cloud is a breathing space for the planet in terms of global emissions, and I do have to ask myself why people go to shows. Sure, they’re fun, and yes, people meet people and see new products. At the same time, some of the much smaller shows, such as [d]arc room, offer local venues and ways for people to connect in a much more meaningful manner than the big, noisy mega-shows that we have all become so used to visiting.
For the record, I enjoy Light + Building and think that Messe Frankfurt does a great job, but for a small business like mine, it’s a huge cost to go there, the hotels are notoriously expensive, and the quality time is spent with people. Now we have all got used to using Teams, Skype, Zoom and others, maybe we could start to wake to a new environmental responsibility, and participate in more virtual events rather than flying 1,000 or 5,000 miles to see a luminaire?
The future of travel, will largely be defined by how well governments manage their part in this event. Over 60% of respondents were unconvinced by their local government’s response in guiding and mitigating the effects, with some particularly harsh comments – I won’t share the details – about southern European, British and US institutional failings in preparing when they had a chance.
What are the current key disturbances people are worried about?
As is often the case in surveys, the category “other” revealed very useful comments such as:
• Challenges to complete necessary development projects
• Defocussing away from important innovations
• Urgent need to consider long-distance outsourcing and bring production back to base
• I’m worried that the market will only get cheaper and forget how important quality is
• Big and small innovators will all suffer disproportionately
• Further delays in projects completion
• Costing going up and the market will go down
On a brighter note, some of the individual conversations I had were a little more positive:
• This will lead to more innovation as “afterwards” people will need to focus on new, differentiated solutions
• The bulk and commodity model will be offset by investments into new technology, if companies are ready
• Lighting design will start to be taken seriously to create healthier buildings
• Building technology will play a role in suppressing future pathogens
There are also quite a few people who voiced concerns about media coverage and even that the whole “event” is a conspiracy and may not even be real:
• Scale of mass media conspiracy theorists and the unfortunate impact these evidentially have on the masses!
• Stupid decision made from fear and incompetence
In terms of mitigation, I hope that people will start to rethink lighting.
How can we react?
One final thing I really wanted to know was how people are reacting to the changing situation. The respondents were clear that travel is tough, at least internationally, and increasingly that national travel is also less desirable and in many cases not really possible. The answers are shown here:
What surprised me was how little, at least until the end of the survey period, people seemed to be considering where the future regions of interest may be. Sure, this is a global event and as such, everything is challenged but tomorrow is a new day. I’ve run my own small business since 2008 and there are good months and those when you start to question the decision to set up in the first place! A recent poll from the venerable “Business Traveller” magazine revealed that the recovery should be reasonably quick, but still 26% of respondents expect to travel less in the future.
It would be inappropriate to say “you should do xyz” yet I really hope that companies and individuals can find the time to appraise their existing business strategy and think about what the future can hold. Clear shifts are under way, right now.
1. The supply chain model with the just-in-time version followed by many suppliers is not resilient – a friend of mine told me recently that just-in-time is never resilient, but I disagree it’s about planning, cooperation and strategy.
2. Automation and configuration need to come of age. You can order a Tesla online, you can configure a laptop online, you can design a kitchen online, and the rest of each of those processes is fluid and interconnected right up until installation. Lighting products are not as complicated as a car and I really believe that we need to consider how lighting design, lighting technology, site management and product configuration can be programmed to work with each other.
3. Yesterday’s boom market isn’t tomorrow’s – there is a clear shift in applications that will make life very interesting for product and solution development over the next few months.
4. Some companies have adapted very rapidly – it’s definitely worth mentioning that quite a few operations have shifted from their usual business to supporting, in especially honourable cases, more or less at cost, the creation of additional medical facilities in various countries – it’s spectacular to see that even in these challenging times, the “greater good” has not been forgotten and well done to them all.
On a final note, one respondent did make a very salient comment about a missing option, so without naming him, I’d like to say obviously I agree, and that personal health, safety and wellbeing must always be the highest priority. What we can do in small, and what our health services do on a much larger scale deserves appreciation and especially for the latter, gratitude, respect and admiration.
There was a lot more insight and feedback as well as naturally my own personal engagement with many different industrial channels, so I’d be delighted to hear from any interested readers if you would like to know more. You can reach me at firstname.lastname@example.org. Many thanks for taking the time to read this. I wish us all strength, health, courage and vision now and always.