“Most companies are built to execute today's business model, not discover tomorrow's.” — Scott D. Anthony
The impact of the global pandemic lingers today, with persisting shortages and price surges in the spare parts sector. While this continues to create significant challenges, new solutions are emerging to help manufacturers develop resilient and sustainable management practices.
At the 2023 Spare Parts Business Platform Virtual Academy hosted in November, keynote speakers from Coveo, Positec Germany GmbH, MARKT-PILOT, and Carraro have gathered to draw a forward-looking roadmap for industry players navigating the landscape, pinpointing three major areas of interest.
- AI Is Revolutionizing Spare Parts Management – Customers shopping for spare parts in B2B online stores are bringing their B2C expectations with them, creating quite a challenge for organizations. Furthermore, the lack of alignment between business needs and the data available and between sales and e-commerce channels is adding an extra layer of complexity. To change this, AI emerges as a solution that can help organizations simultaneously address customer needs and business outcomes at scale. B2B businesses adopting a hybrid business model empowered by AI capabilities have been proven to outperform others, witnessing significant increases in revenue compared to single-channel approaches.
- The Pricing Strategy for Spare Parts Needs to Change– Lacking a well-defined pricing structure can have costly consequences for spare parts organizations, including low profit margins, irregular supply, and a noticeable gap in overall sales. To address these challenges effectively, experts advise to implement several strategic measures, including classifying parts, benchmarking against industry standards, establishing tiered pricing structures ranging from consignment to end-users, adopting dynamic pricing, and setting up a webshop. Organizations that have implemented these steps are seeing significant revenue growth from the webshop and an overall increase in revenue compared to last year.
- Market-Based Pricing Is the New Cost-Plus – Experts have deemed cost-plus pricing unfit for current market dynamics due to its lack of market orientation, disregard for customer perception and value, and limitations in capitalizing on premium pricing opportunities. Market-based pricing, which relies on real-time market analytics, mirrors market dynamics, facilitates data-backed pricing decisions, and promotes sustainable revenue growth. To successfully implement this pricing model, data collection must become a priority in order to generate insights that truly align with customer value, dynamic adjustments, and a thorough assessment of the competitive landscape.
All this and more is now available on demand for your convenience. Thank you to everyone who attended and made the 2023 Spare Parts Business Platform Virtual Academy a true success!