Yesterday Service Dealer hosted another of our regular video conference calls with senior representatives of manufacturers, suppliers, business service companies and trade associations.

Once again, we thank everyone who took part for their willingness to talk openly about how they see the state of the industry at the moment and for their thoughts regarding where we might be heading. As ever, it offers us as a trade journal an opportunity to take a snapshot of some current thinking that we can pass along to you, our dealer readers.

Pricing

Still very much at the top of the agenda for both manufacturers and dealers is 2021's continuing problems with supply of wholegoods, parts and components.

The manufacturers on the call this week all had their own stories to tell regarding disruptions to their flow of goods. We heard them talk about empty warehouses and not even having a single example of core models at their disposal currently.

This raised the question, when do supply chain issues begin to effect costs? The answer of course, is that they already are.

It's not just to do with scarcity of inventory either. There is the worldwide steep inflationary rise in the cost of raw materials, shipping, logistics etc. to take into account. There are many factors all contributing to higher prices.

We were told that manufacturers believe that savvy dealers are already passing these costs on to customers - raising their prices and increasing their margins. Domestic machinery customers we were told, would be unaware of how much a mower has gone up in the past year due to them being such an infrequent purchase. They will simply buy whatever model they can afford.

On the other hand, professional customers who would be more aware of price rises through regular purchases, are at the moment prepared to pay what's being charged because they simply need to get their hands on kit. Scarcity of goods is driving demand and there is a willingness to pay almost anything within reason.

It was felt that dealers who haven't yet increased their margins by passing on higher prices to their customers, were missing out.

How long will this last though, isn't clear? Once supply is fixed, where will prices settle was questioned? It was felt that following sustained increases, prices were unlikely to simply fall back down again. Maybe there would be a few years where they held fairly constant? 

Digital vs face-to-face

Debate was also held over when life gets back to normal-ish, will we see a resurgence in the popularity of consumer face-to-face buying in showrooms? Here at Service Dealer we have heard some dealers believe this to be the case in recent discussions.

The consensus of opinion amongst those on supplier side on the fence this week though, appeared to be that whilst in-person interaction will come back, the importance of a strong online identity, including a fully functioning sales side, couldn't be emphasised enough. It was an absolute must they felt.

The psychology of how end-users purchase has been irrevocably changed over these past 15 months, we were told. The buying journey now very much kicks off with online research. It may perhaps end in store, but it certainly begins at home. Some domestic consumers will in fact place greatest emphasis simply on the convenience of ordering.

The advice to dealers from manufacturers would therefore be to get up to speed with your online offering - whilst in-store, don't be a collector of brands. Concentrate on a few premium makes and technologies, not confusing the consumer with a multitude of choices.

This is an argument we have heard before from certain suppliers of course, which does have its own sound logic. However, dealers will know what works best for their own businesses and customer base. At the same time, this year especially, dealers will know what it feels like to be let down by certain manufacturers in terms of supply and communications. Under these circumstances spreading the risk across several brands has proved helpful.

Events (again)

Related to this changed means of end-users researching potential purchases, was the much-discussed notion of the role of industry shows.

With both Cereals and BIGGA's Festival Of Turf confirming their intentions to take place soon, it seems that manufacturers are continuing to hold conversations internally about their value to themselves as businesses.

It was said by more than one that attendance at exhibitions would be by far their most significant outlay from annual marketing budgets. This doesn't sit well considering they know that nowadays they are acquiring far greater numbers of new customers online.

So why aren't they at least leveling up these spends, they were asking themselves? On the minds of several appears to be dedicating a greater percentage of budget to digital communications and a lesser amount to attending fewer shows.

It wouldn't surprise me if we begin to hear of a return to that policy from a few years ago, where companies chose to exhibit at the large national shows once every other year. Certainly as soon as one of the big boys announces a policy along those lines, be prepared for others to quickly follow suit.