Service Dealer hosted another of our regular calls with senior representatives of manufacturers, suppliers and business service providers this week. 

Having not caught up with this side of the industry for a little while, it was valuable to hear their perspective on how everything is panning out. As ever, we thank them all for their time, frankness and insight.

Supply

As you can probably imagine there is one topic that is paramount on everyone's agenda right now. Manufacturer, dealer and customer alike are all impacted by the disruptions to the global supply chain and the subsequent delays on delivery.

Whilst it's probably no surprise to anyone, the news on this front is that it's not going to get substantially better any time soon. In fact, people are now talking about 2023 before the market begins to see any sort of normality. I've also seen this timeframe mentioned by industry CEOs in the United States.

All of the widely discussed reasons that are leading to blockages and hold-ups in the system, are serious problems. We were told they are not matters with easy, quick fixes that can be resolved in a few weeks. Dealers, we heard, will need to accept that this is the way things are going to be for a good while. It's a case of making the best out of a bad job.

Manufacturers are telling us they may have machines in the production process almost finished, but a lack of components coming through the system means they cannot be completed. Also there are still terrible problems with logistics, both in terms of the astronomical price rises on shipping, plus the unreliability of delivery. Once a container eventually leaves its port there's no guarantee when, or more importantly where, it will arrive! 

Communications

What we at Service Dealer have heard from dealers we have spoken to recently, regarding these situations though, is an acceptance that delays are of course inevitable. However, what we raised with the suppliers on the call this week, was that we had sensed a creeping dissatisfaction at some suppliers for not being as forthcoming with up-to-date information as dealers would perhaps like.

We were told that manufacturers are essentially in the same boat as their dealers in many ways. They are being provided with unreliable and changeable information themselves, not knowing from day to day if anything is going to arrive as promised. And if they don't know, we were told there's a limited amount of detail they can pass on. There is a commitment there to be as open as possible - which is crucial because keeping those communication channels is vital for all parties - it just seems like disruption and disappointment will continue to be the order of the day.

Marketing

Another channel of communication which came up during conversation was the manufacturers' marketing messaging to consumers. We were interested to hear if they had altered their promotional activities in response to stock availability?

Most agreed that it had been necessary to be flexible in their marketing approach. Some said that rather than promoting specific products they were switching to highlighting a range - giving a consumer choices about alternatives that may be available if their first choice wasn't. Others were talking about holding back on advertising as they didn't want to simply disappoint customers by promising products that couldn't be delivered.

Using more reactive and flexible communication tools such as social media platforms, we heard, is allowing marketing messaging to still drum up demand for brands, but hopefully manage customer expectations too.

Sandbagging

A concept that also cropped that I hadn't heard discussed before, was a longer-term concern held by some, regarding the notion of 'sandbagging'. It was felt that perhaps because stock is so scarce at the moment, orders are being put in for the manufacture of huge numbers of machines - and that once the market has leveled out again, dealers could find themselves having massively overstocked. Essentially panic buying.

It was feared that these overly-ambitious orders could then end up either being cancelled leaving manufacturers with unsold machines or dealers would have too much stock, leading to market saturation and freefall. Despite a situation such as this being a long way off, a note of caution was needed to be struck some felt.

Product trends

Looking ahead in a more positive fashion, the talk turned to what the manufacturers saw as the emerging product trends.

As well as hearing that zero-turns are gaining in popularity, it was unsurprising perhaps that the continued and expanding electrification of outdoor powered machinery, across the spectrum of domestic, commercial and agricultural applications, was expected to only become more significant. Tied in with this was the feeling that robotics, again across all sectors, would gain more traction.

This is not to say that traditionally powered machinery would fall out of favour overnight. We were told for example at the moment in the commercial sector, councils are asking for quotes for both the greenest and cheapest cutting options - and they are mostly opting for the cheapest! Which right now is still diesel.

But there is an acceptance that things are evolving - and not just in equipment power sources, but in business practices also. The major manufacturers are buying into or investing in new tech start-ups left and right. Avenues such as A.I are being explored. Companies may find themselves approaching their businesses in ways they never would have explored previously, we heard.

Meeting up

In terms of the industry starting to get back together, we were told that this is well underway right now. Reps are out on the road again visiting dealers for example - albeit with pre-arranged appointment times rather than just dropping in. Also several companies have been holding roadshow-type events this month, which have been going down well with both their dealers and customers

The consensus seemed to be, that however wonderful and necessary video-calls have proven these past 18 months to get us through the crisis, so much more could be achieved in face-to-face environments. People seemed delighted to be back meeting colleagues.

There was a need to remain vigilant mentioned though by some, in regards to industry events taking place indoors in the coming months. There was a desire that anything that happens inside during the late autumn / winter period, takes its Covid security measures seriously. Having lots of people gathered in an exhibition hall in November, is a lot different to smaller groups outside in a field in September, it was said.

Bumper years

Finally though, almost to counter any doom and gloom that may have crept in, it was pointed out that this industry has been very lucky throughout the pandemic compared to many other sectors. Several manufacturers have had some truly bumper years, meaning of course that their dealers have also fared well.

As one manufacturer put it, "We could all be sitting here looking for customers. As it is, there are too many!" Which of course, is a privileged position for a sector to find itself in.

We would be interested to hear whether our readers agree with this sentiment, that despite everything, 2021 has been a healthy year for dealerships. As such, we are running our annual survey today, asking you how your various departments have fared this year?

We'd very much appreciate your input and we'll be publishing the results plus a selection of your comments in the next edition of Service Dealer magazine. Thanks in advance.

TAKE THE SURVEY.