Trends in the commercial lighting market

The commercial lighting market is a core of the industry. Offices, meeting rooms, hospitality, facades, and education facilities are a handful of the applications, with a vast number of luminaires available to fulfil the demands. Within each application, there is a strata of price points and expectations for luminaire performance. The commercial market is one where profitable niches can be carved, alongside lighting majors.

The pandemic has changed the way that commercial spaces are being used. Shifting to hybrid working patterns, alongside the increase in permanent work-from-home arrangements have increased as firms have responded to public health advice. The acceleration in the use of digital technology has meant that firms have understood how to service their customers remotely and keep employees engaged and connected. This does, however, mean that the office spaces are left underutilised and often firms find themselves in long term leases, unable to move or amalgamate sites considering these changing patterns.

The changing nature of working patterns sees the offices being used to have client meetings, collaborate on projects, and have face-to-face discussions on more complex problems, with remote working being used for independent work. More meeting space, breakout rooms and collaborative environments are being built, with current offices adapted to cater for this change. This means that the changing needs of the building will also alter the lighting requirements.

The new BS EN 1264-1:2021 regulations have made modification in how indoor workspaces should be lit. it asks lighting designers and specifiers to consider natural daylight more and requires three times more lighting on the walls and the ceiling. The purpose is to increase wellness when working and considers children’s ability to learn in education settings, with a requirement for 500lux for task lighting in children’s lighting settings. This will significantly alter demand levels of the commercial lighting product portfolio mix.

Raw material prices, combined with shipping cost, has increased the cost pressure on larger luminaries like panels and battens. These product ranges were already low margin for manufacturers, and the issue has been exacerbated in the prior years. Price increases are generally kept as late as possible and to a minimum level, however manufacturers are hurting with squeezed profitability. The total weighed cost price now makes localised manufacturing and modular construction a more attractive option for firms. We expect to see commercial lighting products with these characteristics launched into the market with increasing frequency.

There are plentiful opportunities available to enter this market and to grow market shares profitably. Focussing on the changing nature of demand, combined with how to differentiate products in an environment of increasing cost is where many are focussing their effort. There is still a place for standard luminaires, but it is becoming increasingly important to complement these with higher margin, differentiated offerings.