Every CE pro knows that traditional consumer electronics retail is laden with the skeletons of failed companies, from Circuit City to Tweeter to perhaps even HHGregg soon. Today, the most successful retail business model in consumer electronics is when a traditional custom installation company opens up a storefront with limited walk-in hours.
But one veteran integration company — System 7, along with its sister company Boston Shade Company— is launching a new variation on retail… one with a focus on smart lighting fixtures. The CE Pro 100 company and 2015 Consumer Technology Association Integrator of the Year announced last month it is merging with longtime Boston-area lighting fixture retailer Wolfers Lighting, which has two large retail lighting fixture storefronts.
With the recent failed track record of CE retail, why make this move? It all has to do with the phase out of incandescent light bulbs in favor of LEDs that has spawned a myriad of unanticipated incompatibility problems among all the various trades involved in specifying, installing and controlling lights in the home.
In fact, the lighting control situation might best be described as the proverbial “there are too many cooks in the kitchen.”
For example, more often than not on a single residential project, the architect will spec the various can lights needed throughout the home, the interior designer will spec several decorative fixtures, the homeowner will select some of the lamps, the builder will buy the fixtures, the electrician will install them, and the integrator will attempt to control them. With so many different trades touching this single aspect of a new construction project, the opportunity for error and incompatibility is rampant. The end result of all the turmoil is often an unhappy homeowner, especially when they discover their lights buzz or hum when dimmed, do not dim smoothly, or in some cases they can’t be dimmed beyond 10 percent.
Those all-too-often common problems are among the primary reasons System 7 and Wolfers merged.
“LED lighting is what brought us together,” says Gerry Lynch of System 7 bluntly. “We are constantly encountering fixtures that have been spec’ed and installed that don't match with the LED bulbs. This means the light flickers, does not dim smoothly, or sometimes cannot be dimmed beyond 10 percent.”
He adds, “In my opinion, there can no longer continue to be a separation between lighting control and light fixtures. It has to be coordinated, spec’ed and installed by one company.”
Large Retail Showroom Draws Trades, Consumers
Wolfers’ main showroom in the suburban Boston town of Waltham was built 1971 and overlooks the busy I-95/128 loop freeway. A major remodel was done on the facility two years ago.
The facility has a 6,000-square-foot showroom and 20,000 square feet overall, including office space and warehouse. In total there are more than 700 fixtures on display in the showroom. A second showroom is located in Allston, closer to Boston. There are also three warehouse locations located in the Boston area.
The current foot traffic in the store is about 40 percent consumers and 60 percent trade, including builders, architects, interior designers, according to president Steve Brand. The bulk of Wolfers’ current business is driven by projects, not one-off sales of fixtures.
That makes the combination with System 7 even more ideal. Many of its current clientele are electricians. But according to Brand, combining System 7 with Wolfers will not alienate any of its electrical clientele.
“The electrician will still be selling the lights and earning his markup. But now Wolfers and System 7 will be spec’ing the lights so there is no chance of incompatibility between fixtures and bulbs,” he says. Today Wolfers only occasionally sends staff into the field, so adding that installation component will be a totally new service for the retailer.
System 7 currently earns 3 percent to 5 percent of the revenue from a typical project on lighting design, according to Lynch. The integration company currently has 15 technicians and three project managers. The company will continue to maintain its warehouse and rack-building facility in nearby Danvers, but it will soon be integrated into the Wolfers’ showrooms. Meanwhile, Wolfers currently has 15 salespeople in the retail space, and all of them will be retrained to be able to sell System 7 installation services.
Both companies have Lutron as their go-to brand. System 7 is a longtime Lutron integrator that earned $5.3 million in revenue in 2015 on 80 installations. Meanwhile, Wolfers’ location was named as a Lutron 5-Star Showroom in 2016.
These are showrooms that provide an immersive experience for customers to see and feel Lutron products, and categories are arranged around the lighting control manufacturer's various product lines. To be considered a 5-star Lutron showroom, associates must be proficient in six Lutron product categories:
- Fashion finishes: Satin Colors, metal, and glass finishes
- Control of LED light sources
- Energy-saving solutions – sensors and timers
- Caséta Wireless systems
- Whole home solutions: RadioRA 2 and HomeWorks QS
- Sivoia QS shading and Triathlon battery-powered shades
- Ivalo high-performance LED lighting
Both System 7 (via the custom installation channel) and Wolfers (at the retail channel) recognize the benefits of maintaining solid relationships with their manufacturers such as Lutron. Those partnerships are even more valuable today now that home automation can be attained by more homeowners at any price point via multiple channels.
“Lutron has been working with Wolfers Lighting since the earliest days of architectural lighting control, introducing the benefits and value of simple wallbox dimming, fluorescent dimming, and single room systems to their metro Boston residential and commercial customers,” notes David Weinstein, vice president of residential sales at Lutron. “Over the past several years, our affiliation with System 7 to jointly promote the aesthetic and precision control of electric light and daylight using Homeworks QS lighting controls and Sivoia QS shading systems has translated into significant category growth for both companies. Together, our combined affiliation with Wolfers Lighting and System 7 will create value-added synergy, and support the markets emerging need for smart, connected home solutions using the latest high performance LED drivers, fixtures, and controls.”
Showroom Remodel To Bring ‘Smart Fixtures’
Remodeling of the Waltham showroom is just getting underway. In the end, about 20 percent of the existing showroom will be altered to accommodate System 7 and its installation capabilities, according to Jeff Seigal, vice president and general manager at Wolfers.
“The plan is to bring the world of smart fixtures to the showroom,” says Lynch.
The first thing a patron encounters when he or she enters the showroom is a giant wall of LED lighting. The rest of the showroom is set up with various dedicated Light Labs meant to emulate areas of the home, along with more traditional retail displays.
Instead of aisles of fixtures, the showroom has “interactive cloud” areas. The clouds are rectangular areas are organized by fixture type (i.e., chandeliers), by finish (i.e., brass) or by manufacturer. The areas allow customers to “float” around the displays, which include 12 fixtures each. The areas also each have a hard-button interface that allows the customers to select which fixture he or she wants to illuminate. As part of the System 7 integration, many of those podiums will change to iPad touchpanels.
There is a giant wall of glass at the front of the store that has Southern exposure, so lots of sunlight is pouring in through large panes of glass that stretch floor to ceiling. The windows currently have old (and noisy) motorized shades on them that will be changed to accommodate new, quiet Lutron automated shades. This area is where System 7’s sister company Boston Shade Company will be showcased. Remodeling this shade area is first on the agenda and is due to be completed in April.
Right next to that shading area in the store will be the Technology Design Area that will include an interactive planning table where System 7 team members can meet with clients. The table will have the ability to scan in architectural blueprints for digital display to discuss whole-house integration. Architectural loudspeakers, thermostats and other control devices will be introduced there.
“The idea will be also to show clients concepts of what is possible,” says Lynch. That is the area where whole-house music will be introduced.
In all, the store will have 10 distinct Lighting Lab vignettes where clients will have the ability to see and “feel” lighting. They will be able to see various beam spreads, wall washes, angle lighting, color temperatures, color changes. Several of the labs will be automated with full control, including the addition of in-wall touchpanels and controls, occupancy sensors, and/or iPad controls. The remodeling is due to be completed by Q3 of 2017. There will also be an area of the showroom dedicated to smart bulbs.
Among the Light Labs are:
Living Room – This area showcases bookcase lights, wall washes and art lighting
Closet – Night light ribbons, lighted rods, and illumination on shoes and clothes are among the features.
Kitchen – A modern white-cabinet kitchen includes under-cabinet and in-cabinet lighting, RGB color change capabilities on backsplash. According to Brand, customers are asked to bring in samples of their granite countertops so they can see how the light reflects off the surface.
Bathroom – This mock bathroom showcases can lights, linear lights for toe kicks, pendants and other lamps.
Outdoor Area – This vignette includes a small porch with landscape lighting and porch lighting. (Outdoor AV will be incorporated into this area.)
Large Can Light Space – The largest of the Lighting Labs has dozens of canned lights of various sizes (2-, 4-, 5-, and 8-inch) in a drop ceiling. The cans include various bulb types including halogens, LEDS and incandescents (yes, they still exist). The totally white ceiling, walls and floor allow a customer to see different color temperatures and beam spreads. Lynch says this area will be re-organized by price and fully automated.