Service Dealer hosted a video conference call this week, once again with senior representatives of manufacturers, suppliers, business service providers and trade associations.

We haven't run one of these for six weeks or so, having conducted them regularly throughout the stricter lockdown period. So it was interesting to catch up with everyone, to find out how business had been progressing and whether things had settled down somewhat.

Following the discussion, owner of Service Dealer Duncan Murray-Clarke said, "I think there is now a general consensus that the way we all work has changed forever. Homeworking flexibility has proven to be achievable for many and there is a saving to be had on the balance sheet with downsizing or removing the office.

“I believe that we are facing a similar shift with events. Many will return but will include a greater virtual element. There may well be fewer events, but those that do come back will offer exhibitors and sponsors wider audiences in total - both in the flesh and online”.

Sales

If one thinks back to how things were at the end March and into April, there was so much turmoil and confusion, the business world was in flux, constantly trying to keep up with guidance and regulations.

What we heard from the manufacturers and trade associations we spoke to this week, was that of course sales figures have been negatively affected this year - but seemingly nowhere near as bad as had been initially feared. The month of April was a big hit, but after that, it appeared that the ship was steadied. The consensus we heard was that many would be just behind, or in some cases, in front of where they were last year.

Just how well companies have fared, is of course dependent on what sectors they serve. As we’ve heard throughout this year, ag and garden machinery suppliers have managed pretty well, but it’s those providing machinery solutions for the commercial grounsdcare market who have faced a real struggle. As we’ve moved through the past few months, it has also become clearer that different areas of the commercial market are responding differently.

We heard that commercial manufacturers are finding that golf course and local authority customers’ spend is right down this year – but areas like wealthy homeowners, estates and schools are still choosing to invest in new equipment.

An interesting point raised, which many dealers might be experiencing, is with the rise in online selling which the past months have necessitated, upselling to customers is proving increasingly difficult.

Yes, there has been a surge in sales, certainly on the domestic side, with plenty of entry-level products flying off the virtual shelves. But without that in-person dealer-to-customer interaction, there hasn’t been those higher-ticket machines being sold in quite the numbers that the industry would hope.

Consumers are buying online in ever increasing numbers, with lockdown bringing into focus the convenience of these transactions. Dealers who were able, switched on to this trend quickly – but going forward, the key will be how do we turn these online entry-level sales into more expensive items that offer greater margins?

We heard more than one manufacturer saying that their focus for the foreseeable future will be investment in helping dealers with online sales resources, such as video content, to enable these up-sales.

Investment in business

It’s not just the manufacturers who are investing in the future of their businesses though – we were hearing from the providers of specialist software for dealerships on the call, that many dealers have been investing in their products in recent months.

The representatives of Ibcos, Catalyst and Evopos all seem to have had similar experiences with their dealer customers. They were telling us that the conversation lately has not been along the lines of ‘what will this cost me?’ – moreso ‘how will this investment benefit my business?’

Dealers are taking the opportunity to reengage with their customer base, we were told. Innovative marketing initiatives to let their local communities know about all the services that they can provide have been proving invaluable. One key message which is being spread is that the dealer is not just there for breakdowns. They should always be in the minds of customers who own expensive kit, that they want to keep performing at its peak.

For some dealers there has been a real change in mindset over this period, with many taking the opportunity to invest in the business to push it forward and hopefully future proof it.

Brexit and shows

A couple of other subjects were raised during the call this week. Firstly, everybody’s favourite discussion pre-March, Brexit!

Talk of this has obviously been on the backburner for a while – we had other things on our minds! But with the date looming, manufacturers are having to spend time considering its effects once again.

Although that’s the major problem at the moment – no one knows exactly what it is. Government is spending time and money telling business to prepare for Brexit, but as it stands, how can a company prepare if they don’t know what the trade deal actually is?

Also, it is still unclear what the impact of Brexit will be on the markets which our industry serves. Until that becomes known, everyone is in the dark somewhat.

What was agreed though, is that dealerships themselves are pretty much a step away from any Brexit effects. It is more their suppliers who will feel its impact. Dealers don’t seem to be talking about Brexit much and are waiting to see how the companies they deal with react.

And finally, shows.

With the news last week that AGCO were pulling out of a major European show and choosing to do their own virtual thing, we gauged the thoughts of the manufacturers on the call about shows in the early part of next year.

From what I could gather, there is still in theory the desire to physically exhibit in front of customers at shows. There is a genuine benefit to most manufacturers in doing that. However, the sense I get is that these companies are conflicted over whether the early part of 2021 is the right time to be doing so?

What will have changed by then, was a question posed? Because the biggest concern all these guys have is keeping their staff and their customers safe.

Also, similar to Brexit, the uncertainty surrounding all events at the moment, simply isn’t helpful. The 'will they, won't they cancel' question hanging over every show means these exhibitors are forced into an awkward position of hedging their bets. Do they commission stand builders? Do they book hotels? These matters, plus all the other logistics surrounding attending a show, are up in the air.

Shows are no doubt important - but are they vital in 2021?