Taking a step ahead from selling regular lighting fixtures, the Philips Light Lounge has made it possible for consumers to ‘see, touch and feel’ a vast range of decorative lighting. Now 4 years since its inception, the Philips Light Lounge has opened its 87th retail store in Bengaluru and has seen a growth of 45 percent year on year. Rahul Taneja, Business Head, Philips India, discusses the need for such a concept and tells us how it has worked wonders for them.
Products
Unlike any average lighting store that fails to provide customers a free hand in making their own choice of lighting, the Philips Light Lounge (PLL) offers the freedom to experience the designs in the brand’s vast range of decorative lighting. PLL offers products under the range of Living Colours, Ledino, Classic, Ambiance, Ecomoods, Kidsplace, and Aquafit, which can fit into any space including the living room, bedroom, study, dining rooms, kitchen and bathroom.
Says Taneja: “What’s interesting about this concept is that you can see a product before you opt to purchase it. For consumer decision-making, we have a wide variety of concepts on the wall. We have heritage, contemporary, modern and sleek looking products. Our product categories are broadly classified into wall lights, ceiling lights, wall lamps, table lamps, accessories, hangings, chandeliers, etc.”
The products are priced between Rs. 575 and Rs. 60,000, and target a large audience who can make a choice between what is affordable or stylish. Focusing on quality as one of their main factors that sets the brand apart from other lighting products, Philips has product innovations that help the brand to steer way ahead of competition. Taneja points out that PLL has a huge experience across the value chain. LED is the current trend in the market and more than half of the business at PLL comes from their LED products. Apart from the fact that LED is environment friendly and energy efficient, it lasts for 20,000 hours compared to the average light that lasts only for 2,000 hours. It also has other features that allow light to take shape, whether for chandeliers or wall lights.
He adds: “All these products cannot be found anywhere in the market, irrespective of the kind of budget that they might have. All the products are put through a quality process and tested in such a way that no harm can be done to the consumer. If you look at the market, people are selling products of one particular kind of style. We have a wider range and therefore cater to everyone. So, one of our USPs is the wide range of products that we have on offer.”
Some of PLL’s recent product innovations include the lamp that can change between 16 million colours according to the mood of the consumer. Targeting people who are moving into new homes or who are renovating their homes, the store also offers expert advice in choosing the right lighting design solutions for a consumer’s home according to their tastes and preferences.
Bringing almost 40 percent revenue, Contemporary is one of the biggest styles in the brand. Modern has also made it big with more LED ranges, which is minimalistic and almost industrial in style. The Expressive category is a lot more colourful as consumers like to put a spray of colour in their homes.
Taneja elaborates: “We come out with new designs every six months. We have design teams in India, China and Amsterdam. The design team in India is specific for the Indian audience, which designs products that are not available anywhere else in the world. Now we have specific categories designed for Asia, which is designed out of China. The designs that sell across the world are all done in Amsterdam. Almost 40 percent of our products are designed and produced in India.”
Franchise
A format for a flagship store is around 2,000 sq.ft. in area; otherwise, the company operates on a 700 sq.ft. to 3,000 sq.ft. area in franchise model. A PLL store would require an average operational expenditure of around Rs. 2 lakh a month, which includes rental, electricity and the staff. A franchisee would have to invest on stocks and basic interiors like floorings and ceilings. The designs and layouts are done by the company. A separate team goes out to generate leads in the market and advertise on a national level but some of the local advertising is carried out by the franchisee themselves. Proven to be an effective model, PLL has partners who have opened multiple stores.
A PLL would take anywhere between 6 and 8 months to break even. Taneja explains: “Finding partners is not just about getting a place to sell but this is also something that will help them grow. For any store to break even, it has to be situated in the right location so it attracts maximum footfalls. So, now we have franchisees who are opening multiple stores.”
Challenges
According to Taneja, one of the biggest challenges is that many consumers still don’t know that Philips is in the business of an exclusive lighting lounge. The brand emerged only 4 years ago and consumers generally do not look for big brands in terms of lighting. He stresses that it has become important to build a good relationship, not only through advertising but also by setting up lounges like PLL at prime locations. Another major challenge is the price. He says: “If you compare us with unbranded products, our quality of products are a lot different but it takes a lot of convincing in order to make consumers understand that.”
As opposed to the unorganised market, which he finds comprises as much as 90 percent of the total market in India, only 10 percent is organised. The market for decorative lighting is Rs. 25,000 crore.
Marketing
Relying mostly on print advertising in relevant newspapers and hoardings, PLL also tries to create awareness through social media formats like Facebook. The brand’s business development team also reaches out to influencers like interior designers and architects, who actually engage with them to keep them updated with the latest trends.
Expansion
PLL’s best performing city so far has been Delhi, probably due to the fact that the brand had started operations there with 5 stores and plans are set for another 2-3 in near future. Taneja is confident of Bengaluru as a very high potential city.
PLL also has 1050 SIS formats, which has been the first step in terms of retailing, but an SIS can give a consumer a very limited range to experience. Mostly present in cities like Bengaluru, Mysore, Mangalore or Ooty, where the brand sees a lot of consumption and spending power, PLL has plans of expanding to 150 outlets in the next one year.
