Belgian-owned EMD has quietly manoeuvred itself into position as one of the industry’s most essential distributors, supplying quality low-end brands like Stagg that are among the most popular in their price bracket. Gary Cooper spoke to the firm’s UK manager, Tom Robinson, to find out how it does it….
Think of the giants of the MI industry and your mind inevitably conjures-up the huge American and Japanese brands that have dominated the trade for decades. But fast growing, almost invisibly so you might say, is the unobtrusive Belgian-owned EMD, which not only flourishes as a major distributor in many major European markets, but does extremely good business in the UK and, more recently, has begun making inroads into the US market.
This is all the more remarkable because EMD has achieved international prominence without the benefit of having a major 'professional' brand of its own. True, it distributes Remo in many of its operating territories but even without Remo, it is making progress in the USA.
The question we wanted to ask EMD's UK manager, Tom Robinson was, simply, 'how'? On the face of it, Stagg, EMD's flagship brand is an entry-level offering, covering accessories and starter instruments which shouldn’t be very different from the offerings of countless rival distributors worldwide - and one without the advantage of having a major brand name like Yamaha or Fender to help it on its way.
There is, it seems, no one single magic formula - rather a series of doing a lot of small things right, Robinson says. One of those things is offering a huge breadth of products, making EMD an easy one-stop shop for retailers to deal with. For example, the company has even launched into the bustling Pro Audio market and it was one the eve of September's BPM show when we spoke with Robinson, who was preparing for EMD's début there.
"We now have powered speakers, lighting and a big part of what we do is cables. In fact I'd stick my neck out and say that we are probably the UK's biggest cable supplier, from mic cables to guitar cables and everything else, including a range of digital cables that we're just launching. From pro quality looms and stage boxes down to mini jack to phono cables, we have them all."
So what is it that makes EMD so successful with retailers?
"The biggest thing we offer is stability within the product range, You can buy a huge range of products and know that you're buying from a company that stands behind all of them. It's quite easy to make up a carriage-paid order without making a gigantic commitment and have a range of products that have fantastic warranties, that you know if there are issues, can easily be replaced and which offer generally very good margins. From an investment point of view an order with EMD is probably the lowest risk investment any dealer will ever make."
Robinson is making a telling point. Pound for pound, the same investment made in slow-selling high-end guitars or drum kits, with all the margin issues from which major brand names can suffer, is never going to deliver the profits that having less price sensitive accessories on the wall, each of which can carry a thumping margin.
That said, a retailer has any number of accessory and entry-level brands to chose from and many of them offer similar profitability, so we still haven't found the magic bullet that explains EMD's success. Robinson says, it is a combination of elements.
"For example, we have something like 95 per cent fulfilment rate from Brussels across 4,500 products, so most of the time people get what they order."
It's true that, coming from Brussels means an order can take three or four days to arrive, but Robinson says the high availability offsets the delay. Having just 30 per cent of your order arrive 'next day' with the remainder on interminable back order isn't quite as good as a 'next day delivery' promise suggests. EMD was also one of the first in the UK to have a business-to-business website, though which retailers could see stock levels for themselves. It was another thing that helped make life easier for the hard-pressed music shop.
Then there is the main brand itself. Stagg may not be sexy, but over the time it has been in the UK, it has developed a reputation for being reliable, consistent and backed with an enviable willingness to go the extra mile should problems arise. Stagg has also invested in increasingly better packaging as the brand has grown, so that it looks good on the stand and, Robinson says, the company has taken on board some major international experts in individual product areas, so that while, for example, its wind instruments may be entry-level, the man behind them is a respected expert in the field.
The same is true, apparently, of Stagg's guitar amplifiers which, while they may not carry a brand name that customers will recognise from professional stages, have a returns rate of 1.6 per cent on a UK sale of several thousand items per year. Given the price range, Robinson points out, this is very important. If a low cost product goes wrong and creates problems, it is proportionately far more costly than a problem with a high profit 'pro' brand, where failure rates have been known to reach as high as 20 per cent in his experience.
"The average price of a Stagg amp last year was £41. At £41 you don't want it to go wrong. If it goes wrong, it costs money so we can't afford to have unreliable products," he says.
Despite that, Robinson understands that Stagg has an image problem among some retailers - in fact sometimes more so, he suspects, than it does with end-users. "Stagg is not cool, but we're not trying to be cool. We're about making a good quality product for a great price and offering the consumer great value for money. That's not necessarily cool, but it's great for a 45 year old mum buying a pair of hi-hats for her 14 year old son. In fact we get a lot of fantastic feedback from end-users who have used Stagg products in the past."
If Stagg isn't a 'cool' brand, neither does EMD or Tom Robinson subscribe to some of the 'cool' ideas in business. For example, EMD has seven reps on the road in the UK and Robinson himself spends a lot of time out of the office, visiting retailers. While repping has changed, with EMD's reps now being involved in helping retailers with their websites and store promotions, rather than simply lugging in a catalogue and letting them choose what they want, Robinson still believes a rep's relationship with a retailer is vitally important - as is his own, which is why he insists on visiting all his UK areas at least once a year. It means he is out of the office several days a week (he is also involved in establishing EMD's US operation!) but he considers it time very well spent, he says,
The same is true of in store promotions. With Remo, for example, EMD runs drum tuning workshops which on around 20 weekends a year, takes a show to a retailer, showing his customers the mysteries of drum heads and their tuning. "Guys get taught how to tune their drums and why drum heads matter to their sound. A lot of drummers will buy a kit and never change the heads but Remo says 80 per cent of a kit's sound is the head, so we're trying to encourage drummers to replace them more often. We've had stores selling £2,500 worth of heads when we've done one of these workshops, so it definitely works! We've done similar things on brass and woodwind and on our James Nelligan acoustic guitars and we hope to do them on cymbals too in the future.
"Because we're not specialists in any one thing, people can be put off by that, but what makes us special is that, though we act like a small company in the UK, in reality, we have great product development, with great people behind the products. The fact is we just do a very good job on all 4,500 products and that means a retailer can have confidence in whatever he buys from us."
It's hard not to think there must be more to it than that, but perhaps that really is the secret of EMD's success? This is an avowedly unflashy company that is easy to deal with pays close attention to every detail of its operation. Simple it may be as a business strategy, but apparently very effective.