GE eyes retail shops to stay on top in the 'Wild West' of LEDs

GE LED retail lighting
Integrating LEDs into personalized shopping services could drive retailers toward more energy-efficient lighting.

"The LED world right now is like the Wild West," said Agostino Renna, president and chief executive of GE Lighting Europe, Middle East & Africa.

Growing competition in a rapidly expanding market is making it harder than ever for the company founded by lightbulb inventor Thomas Edison to stay on top.

"We have more entrants coming into the space from all over, thinking that they can essentially make lighting products because they can buy chips from China or Japan, make luminaires and sell them," he told BusinessGreen. "There's a lot of noise in the industry. A lot of people making claims that in a lot of instances they can't substantiate."

Lux Research has predicted the global market for LEDs will reach $25 billion by 2020, representing a 12-fold expansion over 10 years. Japan has seen particular growth, with nearly one-third of all bulbs sold in 2013 being LEDs. India's market is also set to expand rapidly thanks to a national rollout scheme that could see 3.4 billion bulbs sold next year alone, according to the International Energy Agency (PDF).

Lighting up with excitement

For decades, the energy efficiency market has complained that they are marketing an essentially invisible and unsexy technology, delivering huge gains on energy bills but little obvious benefit for people who use them every day.

The answer to this problem, said Renna, is to provide customers with a much more alluring product, and sneak the energy efficiency gains in through the back door.

This is one of the major reasons why GE announced a partnership with Qualcomm earlier this month, which aims to help retailers offer a more personalized shopping service to customers. Qualcomm technology will be placed in GE's LEDs in store that can track shoppers as they walk around and then send them personalized messages, offering discounts or advice.

Without giving specific details, Renna said the technology is already being piloted by a number of major brands all over the world.

Privacy concerns

The technology may sound like a worrying invasion of privacy for consumers, but Renna maintains it is merely levelling the playing field with online retailers, who already can track exactly what their customers are browsing and buying.

He also argues that the opposite of an invasion of privacy is true. For example, a young teenager in a pharmacy may be too afraid to ask an assistant about personal hygiene products and may be pleased to see the information pop up on their smartphone instead.

"I have an obligation to Thomas Edison to make sure I don't screw this up," he said. "We're trying to move ourselves into an environment where, yes, we deliver great lighting products, but predominately we deliver a set of services that jump off of this lighting platform to either drive productivity or enhance the quality of life of people that are in that space.

"I envision a world where we are basically a software and analytics services company and as a consequence to you buying those services, you also get a great lighting product and not the other way around."

Partnering to extend reach

Renna has plans for further expansion and for now, thinks collaboration with smaller tech companies will provide the path to that. He says partnering is much quicker and easier than GE developing its own version of the technologies or making acquisitions.

"If you're going to drive for first mover advantage, one of the things you're going to have to recognize is that you need to partner with firms that can fill in gaps that you're not able to fill in," he said.

But that also means playing nice. Something that Renna admits big companies like GE haven't always been very good at. It means accommodating the needs of a smaller company, listening to them and sometimes even doing what they say.

"You have to have a very humble approach," he said. "And at the end of the day if you focus on solving problems for the markets you're trying to serve, those issues generally solve themselves."

This article first appeared at BusinessGreen.