Traditionally, OEMs set a high list price which was gradually discounted at the different sales levels, until the consumer haggled for the best deal at a retailer of choice. Now the industry faces three major challenges at once that are having powerful implications on pricing: e-commerce, direct sales and electric vehicles. The combination of these megatrends is profoundly disruptive and, as a consequence, pricing practices need to be revamped even faster than before.

Based on these six premises, we developed a transformation roadmap for pricing in a world of omni-channel direct sales. We examine in detail the roles of price strategy, data and analytics, as well as IT and technology. We then suggest how OEMs can enhance their pricing strategies.

With these three megatrends collectively impacting the industry, traditional pricing practices need to be revamped faster than ever. OEMs must gradually centralize all pricing activities and fundamentally innovate their pricing strategy and models, as well as their data and IT landscapes. Cumbersome price negotiations, gratuitous special discounts from salespeople, or staggered pricing approaches at different sales levels will become a thing of the past faster than most might anticipate today.

To keep up in today’s ever-changing marketplace, OEMs need to embark on a pricing transformation journey. It will be fueled by the advantages of e-commerce and direct sales, such as higher data availability and quantity. Advanced analytics and state-of-the-art software solutions that use this data will bring pricing to the next level and help OEMs better manage margin-volume trade-offs and win the customers of tomorrow.