Manufacturers pursue growth amid economic uncertainty

In a collaborative effort between experience innovation firm Valtech and Copperberg, a new global research report has unveiled that, despite economic indecision amongst businesses, manufacturing companies are continuing to invest in innovative business models to bolster 'aftermarket' eCommerce and customer portals.

According to the study's findings, there is a progression in digital maturity pervading the entire customer relationship, with manufacturers prioritising growth within their existing clientele.

Titled "The Voice of Digital Leaders in Manufacturing 2024," this report delves into the digital decisions made by large industrial manufacturers worldwide. Notable discoveries from the research are that businesses relying on eCommerce for aftermarket services have seen a substantial increase from 7% last year to 15% this year. Moreover, 75% of respondents see eCommerce as the primary channel for revenue growth for 2024. Investments in customer portals have also surged, growing from a 50% investment rate to 66% this year. Additionally, 39% of survey respondents note their priority towards their data foundation and analytics, a vital aspect of both eCommerce and customer portals.

Mascha Tamarinof, Global Vertical Lead, B2B at Valtech, commented on these findings: "In today's economic and industry landscape, where competition is fierce and servitization is growing, many manufacturers see a massive opportunity in growing business within their existing customer base by upselling and creating digital services in the aftermarket." She added that their research found that the combined digital revenue from new product and equipment sales is 16%, but that figure rises to 26% for aftermarket digital sales, stimulating a shift in business priorities.

The study also pointed to an improvement in digital maturity among manufacturing organisations. While this year's survey noted that 30% of respondents ranked themselves ahead of their competitors in this area, that figure was only 16% in the previous year's study. Herbert Pesch, Managing Director, Valtech B2B, stated: "It's positive to see an upward trend in digital maturity as they begin to leapfrog the competition and benefit from the digital capabilities they invested in last year."

Even as manufacturers become aware of new business opportunities through aftermarket channels, the report concludes that they face challenges in seizing these opportunities. Predominant concerns circulating among manufacturers involve rising operational costs (51% of respondents), new market entrants disrupting business models (with concerns rising by 23% compared to last year), reluctance to embrace digital tools (49%), insufficient cross-department collaboration (46%), and the absence of local digital ownership (46%).

Addressing these concerns, Pesch added: "The results this year reflect a common organisational culture struggle [which] can be addressed with change management, collaboration, and a more cohesive approach to digital ownership. Overcoming these challenges is essential for industrial manufacturers to unlock the full potential of digital commerce and customer portals in the aftermarket."