SAG_Manufacturing_Predictions_Twitter_880x440px_Nov20As manufacturers continue to adapt to Covid-19 realities, they are realigning their organizations to quickly adapt and stay competitive in 2021.

Choppy demand, broken supply chains, urgent changes to work safety environments – these are just a few of the challenges facing manufacturers, forcing them to reassess their operations and business models.

Next year, and for years to come, they will need to remain agile to respond quickly and remain relevant, no matter what is thrown at them. Here are the three major trends I see for 2021:

Trend #1:  The digital customer

The customer journey has been transformed, driven by a new desire for touchless, digitally enabled buying channels.

Digital enablement is a top commercial priority for manufacturers, but many will struggle to implement digital tools and sales channels in their environments. Once implemented and staff is trained, these new digital tools will help customers to not only understand their initial product acquisition costs, but also implementation, utilization, and any other post-sale requirements.

This is a balancing act for manufacturers as digital enablement must take place while they remain “easy to do business with" for customers.

Trend #2:  Revenue resilience

Manufacturers are transitioning to innovative selling models such as Anything as a Service (XaaS) and outcomes-based offerings to create recurring revenue and improve revenue resilience.  

Both offerings allow companies to stay connected with customers throughout a product’s subscription life, typically three years or more, and increase the total customer lifetime value. 

As they expand the sales of these integrated products and services, they are tasking distributors to help originate and support software solutions. But, although these offerings benefit customers by reducing their capex costs, manufacturers are finding it difficult to articulate the full value – finding them a hard sell.

Trend #3:  Evolving channel strategies 

As face-to-face customer contact diminishes, manufacturers are re-thinking their channel strategies – both direct and indirect.

With noted success in virtual selling, manufacturers will continue to increase their digital investments to stay in contact with their targeted customer base, while balancing the safety needs of their employees. 

Despite the rise of digital channels, manufacturers are not moving en masse to purely direct selling models. Some manufacturers have their own ecommerce channels, while others prioritize distributors with full online capabilities. With direct channels, manufacturers are expanding enterprise programs and increasing efficiency with sales specialists and hybrid inside-sales roles.

Conclusion

In 2021, while most will have recovered from the initial economic shock of Covid-19, manufacturers will still be learning to operate in an uncertain, remote environment.   Face-to-face interaction is still required for longer and more complex sales cycles, but their success is also dependent on wary customers - who are slowly and unevenly allowing more access to outside sellers.

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