How Philips Lighting mastered smart lights – and turned a $60 light bulb into a winner
SUMMARY: When is a light bulb not a light bulb? When it opens up a different way of thinking about lights (make that smart lights) – not to mention data.
Why the Internet of Things starts with lights
If you have a look around you, look up at the ceiling now and count how many light points are on there. There’s bound to be at least two, three or four, if not more. Lighting is the product which is the most distributed than any other thing across the world. It’s everywhere – where we shop, where we live, where we sleep and where we work, and so it is the perfect network that we can use to roll out value in Internet of Things.
Philips Hue is an Internet-connected light bulb that people use in their homes. It really changes the nature of the way you use light in your home. Suddenly, you want light to help you decorate your home. It’s an alternative to wallpaper or display cushions. It’s an alternative to a security system – it can simulate your presence when you’re away from home, and always welcome you with bright, welcoming light when you come back. You can even think of it as an alternative to having a coffee in the morning, because light has a biological impact on your body and can help you wake up, concentrate or even relax in the evening.
Charging $60 for a light bulb means reframing the core meaning of the product. How did Philips pull that off?
Light has always been viewed as a cost, a necessity. It’s something you have to have around you all the time, but you just want it to be as cheap as possible. Now, we’re not talking about only light to help you see, we’re talking about value beyond that. The thing you are buying is completely different, and you have a totally different perception of what it’s worth. That’s how we are able to sell the product which used to be a $2 cost – a product which we only thought about when it broke – and charge $60 for totally different reasons.
Enterprise smart lighting – a connected network
Since lighting is all around us, every one of these artificial light points can sense what’s around it. One of the things that we’re doing in retail places, and in shops and supermarkets, is we’re having the light there give you a kind of indoor GPS. Every one of our light points can send out a code hidden in the light which a human eye can’t see, but your smartphone camera can. We can use that to exactly position where you are in this retail space.
Shops can then use that to either to track your motion and behavior through the shop, or offer you contextual personalized advertisements and promotions for products that could go well with what you’ve already bought. These things are really proven to have a profound impact on shopper behavior, so people are really excited about what this can do for the retail experience.
Serving municipalities – outdoor lighting as a service
Cities around the world are managing every light point. The outdoor street poles are connected to the cloud. They each have cellular data connection inside, so that they can be remotely monitored and controlled from a central location. Municipalities can see at any point in time where they have lights that need maintenance, where lights are on, which parts of the city are consuming more than others.
But improved lighting management is just the beginning:
Where it gets really exciting: these light points are now able to sense what’s around them. We have this network of perfectly distributed lights all over the city, which can do things like track the air pollution, see if there’s been a traffic jam – all kinds of things that can be rolled out on top of this infrastructure which you have to have in your city anyway. What used to be an expensive dedicated sensor network is now just another service on top of your lighting.
Building a next-gen office with Deloitte
Last talking point: Philips has collaborated with Deloitte to build a next-gen office, from the ground up. The project is an example of how these lighting innovation themes can be pulled into one initiative:
All three things have come together in a project to design the office space of the future that we’ve done with Deloitte. Deloitte’s built an entirely new headquarters in Amsterdam and they’ve installed, together with us, the most state-of-the-art lighting system in the world. Every one of the light points in this building are connected directly via the power of Ethernet cables towards the IT infrastructure of the building.
Furthermore, they have this indoor GPS and sensors built into every one of these nodes. An office worker in this space can just pull out their smartphone and control the lights above where they are, to set personal brightness levels or temperature controls. The facility managers can see exactly how the building is being used, so they can plan their cleaning and expansion of office space more efficiently.
Final thoughts – “We’re not selling lighting anymore”
We don’t go to them anymore and just sell the lighting. We sell them a whole bunch of other things which they also want and desire, but now they can get it bundled together. In a lot of cases, the reasons we’re winning the projects is not because of the light we’re selling. It’s because of what we do with the lighting infrastructure. It’s totally transformed the way we conduct our business.
That same shift is felt on the customer side. It’s an entirely new customer interaction, and a good note to end this series on:
We always used to talk to the facility managers, and the only thing they ask us every year was, “How can we get the cost of this light down even further?” Now we’re talking to the CTOs and CIOs, and they’re excited about the data we’re generating, the new promotions they’ll be able to run, and the insights the products we’re selling them will give them.
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