Not exactly sure what vertical integration can mean for your business, or how it fits into the wider market? Well, the good news is that below you’ll find a short, snappy overview.
It’s an important topic too, though one that can sound highly complicated. But get it right and you can experience a range of benefits, as this type of integration is also:
- Becoming a core way to differentiate your dealership – to stand out from the crowd
- Helping to shape customer expectations for how they buy refrigeration capabilities
- Providing an opportunity for dealers to grow revenues and find new customers
Exploring the opportunity
Customers are increasingly expecting suppliers to offer one-stop shops for ease and convenience – and ‘total transport solutions’. This is essentially what vertical integration is. It means adopting a wider service portfolio in relation to the temperature control value chain.
Vertical integration has always been around. Find some inspiring stories and opportunities below, divided into three broad areas:
One: the build
This section covers the physical design and build of the vehicle, involving everything from chassis OEMs and box builders, to tail-lift companies and inclusion of a cooling unit. Vertical integration here is seeing a gradual removal of ‘traditional’ lines of ownership.
For example, OEM Vehicle manufacturers are partnering with refrigeration experts to sell ready-to-go temperature control technology.
While for equipment manufacturers, vertical integration is helping boost their day-to-day activities through faster lead times and more competitively priced products.
Two: the act of purchasing
It’s here that you can attract and win more business by offering financing packages for both direct sales and leasing options, as well as warranty packages.
From hire purchase agreements to finance leasing, a growing number of dealers and body builders are benefitting from helping customers fund their next equipment purchase. This can be a deal maker or breaker for those fleet managers / operators who might not have the time to shop around for the best package.
Three: post sales support
These are activities that go ‘beyond the reefer’ to offer customers access to specialized capabilities such as telematics and sensor technology – as well the reassurance of maintenance support, repairs and training.
As many dealers are already finding out, providing support and service on site and in the workshop opens up a number of new sales opportunities. And by making sure the uptime of equipment being supplied is as high as possible, they can also be part of on-going planning and efficiency conversations.
Keeping up with the market
As for how the market is responding to the ‘vertical integration challenge’:
Large partners like Lamberet are teaming up with suppliers like Thermo King to offer ‘all-in-one’ bodywork + refrigeration solutions’.
While Thermo King dealers continue to lead the way in new vertical services, including Fleet Management, Automated Service Delivery, and Weight Testing.
Similarly, Thermo King’s competitors have been busy ‘getting vertical’ – for example Danfoss have announced new collaboration centers with OEMs to develop innovative solutions – a move that fits with the wider industry trend of offering customers a ‘one-stop solution’.
