Like the Co-Op, the idea of a retail buying group makes such good sense that you wonder why there are so few successful ones.
In fairness, though, the UK’s MI industry has had two in recent years – Rocktronic and Euromusic – and if neither has made publicity its main priority, both are widely known for doing a good job for their members.
Now, as revealed in MI Pro in March, the two are merging, though keeping the Euromusic name. Now the potential is there for an even stronger body – not just developing negotiating muscle, but expanding into new areas.
Historically, Euromusic emerged from SMIRA, the (largely) Scottish-based buying group, while Rocktronic was formerly known as The Firm. Given their origins, it’s no surprise that the former was largely Northern-based and the latter more rooted in the South – though there are some geographical exceptions among the members.
Rupert Bradbury of the leading North East retail chain JG Windows is chairman of the new company and says he can see a lot of potential for the expanded company. That said, he was keen to stress when we spoke that a lot of ideas for Euromusic are still ‘work in progress’ pending meetings to hammer out the final shape of the new alliance.
First of all, why now? What was it that had brought Rocktronic and Euromusic to the altar?
“There have been on and off conversations about the two groups joining forces for some time and there have been joint deals done in the past where we have worked together, so there’s always been a very good dialogue between the groups.
“But in the current economic climate it kind of seemed inevitable that at some point it would make more sense for there to be one buying group, rather than two. It had never made its way to the top of the agenda before, but in the Summer of last year it started to come together.
“Both groups had identified that there isn’t really space for two buying groups in the UK industry and the model that Euromusic has works very well, so the agreement was that Rocktronic could transfer its assets into Euromusic and Rocktronic members could apply through the normal route or get approval as members of the new group and by the end of February, that’s where we had got to.”
Following the merger, Euromusic now has around 90 members, making it a very useful potential customer for suppliers. Bradbury says members are spread right across the spectrum in terms of size.
“The whole point of Euromusic is to enable independent retailers to purchase at better prices – enabling everyone to make more money. JG Windows is a larger retailer and we still benefit from it because we use it to import products. But a smaller dealer, with perhaps only one shop, who wants to buy, for example, an SM58 microphone which you would usually have to buy in large quantities to get a good price on, can buy it through Euromusic and actually make money on the product.”
How do suppliers view Euromusic?
“Some see it as the best thing since sliced bread, get right behind it and we come to all kinds of interesting arrangements, but others probably still see it as a little bit of a threat.”
That threat mostly comes from areas where Euromusic imports its own brands – products like its successful On Stage stands. “If you’re someone who imports that sort of product then perhaps you might see it as competition, but most people have pretty broad shoulders and there isn’t too much of an issue there,” Bradbury says.
It is here that the future holds serious promise, one can’t help feeling. As discussed in MI Pro recently, there is a class of what are considered ‘boutique’ brands (notably, from the USA), whose manufacturers fail to build-in a margin for distribution, which means if they are ever to export to the UK it has to be direct to individual retailers.
While that works well enough in small volumes, having just two or three specialists selling your products is never going to amount to huge business – and if the inhibiting factor is the lack of a distributor margin, a group like Euromusic could offer the perfect solution – a distributor that doesn’t need to make traditional margins to operate, but can provide access to up to 100 retailers.
“In a sense we already do this, with Deacon as an own-brand on guitars and we are also the UK distributors for Peerless guitars, which is a brand I feel will particularly benefit from the amalgamation,” Bradbury says. “So, yes, I think this is an area we can explore and there are already some products in the guitar effects pedals category that we’ve been looking at that fall in exactly that kind of area.
“We’re also interested in getting suppliers more involved in ideas like affiliate membership, so it’s not just about companies supplying us with product – we could actually supply them with products in some cases.”
Another area of potential development is common branding and marketing – a tactic well deployed by the white goods trade consortium Euronics.
Bradbury says that this is another area that’s currently up for discussion. “We don’t do it at the moment, but we do think it’s the sort of thing that we should be doing. We also think there’s room for us to offer training opportunities for members and I’ve recently been talking with a web optimisation company about just that.
“I remember when I worked for Roland, there was a feeling from some retailers that, generally speaking, the big dealers got all the best deals and the little guys were left out. If people are willing to get together to buy better and more competitively, this is the opportunity to do that.
“With the MIA looking after the ‘political’ side, for there to be a body that looks after the commercial side, as Euromusic does, can only be a good thing for the industry.”