The global industrial maintenance, repair, and operations (MRO) market looks rosy—but distributors still face pricing pressure. Relying on scale and SKU count alone won’t help them avoid the commoditization trap. Rather, they’ll have to distinguish themselves from rivals—by putting customers’ priorities at the center of their competitive strategies.
At a glance
- Increased scale and SKU count don’t predict profitability for MRO companies—even for the biggest players in the market.
- It’s more important that they understand the forces affecting their gross margins and operating cash flows—like pricing transparency or use of remote equipment monitoring.
- They must excel at operational and technical innovation—with an eye toward boosting customer lifetime value.
- By learning more about customers’ challenges and goals, they can provide value-added offerings, like running a customer’s MRO inventory ordering and management processes
- Using e-commerce could further boost MRO distributors’margins—helping them achieve more efficiency and giving them easier access to target markets.