Why Did Savant Buy GE Lighting?
Savant President JC Murphy discusses the future of a ‘GE Smart Home’ brand, and how the buyout could boost integrators’ margins on Savant product.
It really came out of nowhere last week when Savant announced it was purchasing GE Lighting for an undisclosed sum. Savant has been very strategic in its acquisitions, which have mostly been in the lighting area: LiteTouch in 2012, NOON Home smart lighting earlier this year, and now GE Lighting. So what is the game plan for the Cape Cod-based Savant?
President JC Murphy spoke exclusively with CE Pro and discussed the synergies between Savant, GE Lighting and Savant’s sister company Racepoint Energy. One of the key elements of the acquisition is the ability to use the GE brand name, and Murphy hints that the power behind a potential GE Smart Home brand name could offer powerful consumer recognition.
CE Pro: What are the synergies between Savant and GE Lighting that drove this deal?
JC Murphy: One of the first synergies is being able to establish a very known brand in the Smart Home space. While humbly we are proud of the Savant brand and what it’s accomplished over many years in the custom luxury space, end users really don’t know the Savant brand name.
So this was an opportunity to acquire not only GE Lighting and its great people, manufacturing, operation and management discipline, but also the brand GE Smart Home. To be able to use the iconic GE logo, plus the nomenclature of GE Smart Home, will build brand awareness and recognition. The CI channel has been asking for new investment in marketing and brand awareness, so the channel has a household name. This will go a long way to doing that.
CE Pro: Clarify that for me… Is the Savant brand name going to merge into GE Smart Home?
Murphy: No. We don’t want to do any harm to each respective company’s individual channels. GE Lighting has an unbelievable consumer brand recognition in their core business. Savant has a very good brand in high end luxury.
We don’t want to disrupt any of that with name changes, but what we do want to look at joint offers, and combining great technology and capability from both teams under a newly branded offer.
CE Pro: You brought up the difference in the sales channels. What is GE Lighting’s sales channel?
Murphy: The GE Lighting product offering is the number one retail lighting brand in terms of shelf space. That’s where they focus the vast majority of their energy. Their primary market is the lighting aisles in all major retail outlets.
CE Pro: Do you see developing a GE Smart Home solution that’s really Savant products in retail channels, or do you see GE Lighting becoming accessible to the customer installation channel, or both?
Murphy: We’re evaluating both, but the easiest one is when you look at the current Savant lighting lineup, we really start at specialty wired lighting with the breaker companion modules and we move into a wireless mid-market solution with our Echo wireless lineup. We really don’t have a broad market solution right now. The C by GE Lighting solution is a perfect fit to be integrated within the Savant lighting offerings for custom installation. That’s really a straightforward awesome fit. Conversely, very confidently I think the answer is ‘no’ to seeing Savant-branded product in retail.
CE Pro: Will we see a GE Smart Home-branded product that’s driven with Savant technology?
Murphy: That is the great insight… that’s exactly it.
CE Pro: Is GE Lighting primarily a fixture company or a lamp company?
Murphy: It’s really a lamp and bulb company, and over the past couple years it has added a lineup of smart plugs and smart switches.
CE Pro: Does this have synergy at all with Racepoint?
Murphy: Yes, absolutely, and specifically Racepoint’s breaker companion modules. There are two use cases for those: One is as a foundational element for energy management and lighting control, and the second is using those modules in a relay configuration as an energy management modules. There’s a wide application for utilizing this GE Smart Home brand across the Racepoint product line.
“Given the scale of GE and their ability to provide buying leverage for core components and do a lot of the manufacturing work for Savant, we clearly see a way to be able to deliver better margins to the dealers.”
— JC Murphy, Savant
CE Pro: Does this acquisition affect your relationship with USAI Lighting?
Murphy: It really gives USAI Lighting and Savant what we’ve both been needing, which is the breadth and depth of brand recognition and market share. USAI has such an awesome full featured lineup in architectural fixtures, and we just need more jobs with lighting control to deliver more RGBW and the tunable wave lighting technology into the custom installation channel. This will give USAI a big boost for sure.
CE Pro: For integrators who might be looking at this acquisition as a departure for Savant, can you talk about the big picture perspective of how important lighting is for integrators and why this is more of a fit than a departure?
Murphy: Great question. I’d take that in three pieces. First, if you look at GE lighting’s iconic legacy, they were the first in multiple categories on the evolution of light. They moved into the Smart Lighting Control space with their C by GE offering, and they were the first to introduce a light controlled by Google. Lighting innovation is a core capability that they’ve had for a long time obviously.
Second, this acquisition does a lot for the CI channel from a brand and recognition perspective. We will soon become the first full service solution provider under a GE Smart Home brand. Think about walking into a home today where it’s fully equipped with GE appliances. Right? One-stop shopping for all your appliances and smart home technology. There’s a big vision that brings smart home to homes all across America under a GE Smart Home brand.
Third, we’ve got scale from a manufacturing, quality and cost perspective to drive those solutions much more broadly in the market.
CE Pro: What does this mean for dealer access to products and product margins?
Murphy: Given the scale of GE and its ability to provide buying leverage for core components and do a lot of the manufacturing work for Savant, we clearly see a way to be able to deliver better margins to the dealers. That’s always been a part of the equation for integrators… the sustainability of the channel is built on margin.
CE Pro: Will this give the Savant authorized dealers preferential access or pricing to GE Lighting lines?
Murphy: Yes, I would expect it to… it’s a very broad lighting offering. We’re putting a team together to look at the key products that we want to bring to the CI channel and to our distribution partners, both domestically and abroad.
