Buying groups in the bedding industry are known for discounts, rebates, special deals on exclusive lines and offering smaller retailers access to bigger brands like Serta Simmons Bedding and TSI.
However, after speaking with several executives at various buying groups, it became clear that there may be a need for more education on what services these groups offer and how they can be more helpful than simply discounts and rebates.
Adam Fain, who recently began a role in member services at Nationwide Marketing Group, says buying groups are a community that retailers can turn to when they need help with many aspects of their business.
“The biggest reason people join a buying group is because they get access to products that they otherwise couldn’t,” Fain says. “But that’s the least important reason to join. What a lot of people don’t realize about buying groups is that they’re also marketing groups and we can all share ideas. These groups collectively put these services together to maximize back-end margin preservation.”
He adds that services like marketing can give retailers valuable time back and prevent them from having to hire a marketing team.
“We know retailers don’t have time for these things, which is why most of them have inadequate websites,” Fain explains.
Tom Bennett, president of AVB BrandSource, says that because each retailer has different needs, buying groups can fill as many or as few needs as the retailer wants.
“Some people might have a young person in their business that’s excellent at some of those things, and others don’t even know what SEO is,” Bennett says. “Retailers can hand it over to us, and we can take the reins. The two things members need are time and money. If we can save them time with services that we offer, then we can help these hard-working people maximize their return on profits.”
Chad Fischer, director of bedding at AVB BrandSource, says that while some members join only for the rebates, other members are seriously diving in and utilizing buying groups for everything they have to offer. Part of that is because of Covid.
“We found many prospective retailers that were still not finding websites to be important because it’s another cost that they didn’t want to pay,” Fischer says. “But it accelerated during Covid, and the good retailers asked for help in how to navigate this. The buying group channel was able to provide insight, assets and resources to help retailers. Covid made retailers realize the importance of digital marketing websites.”
Bennett adds that websites are the No. 1 store for most BrandSource members — with one member seeing 90% of its customers going to its website first.
“If the website is not the retailer’s No. 1 store, they need to look at it and treat it like it is. The customer is very educated by the time they get to your store. You need to have a good website.”
In fact, a recent study by Google found that a significant majority, around 83% of shoppers, research a store online before visiting in person.
“We invest in things that we can’t monetize because our members need it, and that’s what makes it more like a community,” Bennett says.
That community element is what drove retailers Greg Jent and Steve Houk to form the Mattress Industry Dealers Association, which Jent says is not a traditional buying group.
“We’re an association because we’re working for the members all the time,” Jent explains. “Our goal is not just the rebates but strengthening the retailer’s business. But the real advantage is the community we’re building among independent dealers. A lot of times buying groups chase after the big guys, and our focus is on that small dealer, typically five stores or less. We aim to build a community where we’re all looking out for each other, sharing best practices with each other and communicating what works and what doesn’t work in an independent store setting.”
The group is focused on mattress retailers, which helps narrow down and pinpoint problems that similar smaller retailers are facing.
“Some rebates from other buying groups are showing up six or nine months after they’re earned by the dealers,” Jent says. “We’re committed to paying them within 45 days. For us, it’s about best practices when it comes to education, marketing, merchandising and much more. That’s the benefit of having mattress retailers involved in the process and with the group being so niche. ”
Fain concludes that competitiveness in the industry has turned a lot of retailers to buying groups and that there’s an opportunity for the bedding industry to collaborate.
“If we can kind of soften our approach and work together as an industry, we’re all going to do much better,” Fain says.
