“A small independent retailer has got to be the buyer, the seller, and supply their own marketing,” Kelly says. “NMG lightens that load through the services we provide our members.”

For more than 30 years, NMG has been working to make business easier for independent retailers in practically every aspect of retail that does not involve the sales floor. From hiring and training to marketing and advertising, NMG covers a lot of the areas that can give independent retailers headaches and take their eyes off the customer. Kelly says he sees NMG not just as a provider of services to its members, but as an extension of their operations.

“We want to be the back offices of the independent retailers,” Kelly says.

Independent retailers face a lot of issues today. Increasing costs, competition from national big-box chains and shrinking visibility in the face of those chains’ advertising blitzes, are among the pressures independent retailers struggle against. With the number of services NMG provides for its thousands of members nationwide, they can at least find some comfort in knowing that there is a support network dedicated to helping them stay competitive.

Weisner says there has never been a more treacherous road ahead for the independent retailer than right now. Their market share has diminished, competition is fierce and customers don’t even have to leave their houses to shop anymore.

“Years ago, most of the independents – when the independent segment was about 55 percent of the business – they did not have companies such as Circuit City, Best Buy, Lowes and Home Depot that they were competing against,” Weisner says.

“Customers are also using the Internet to shop; there’s so many choices that a customer can make and I think that’s the big problem.”

Today, he adds, independent retailers make up only 33 percent of the business.

“The good news is that we are picking up market share in recent years,” Kirk says.

Where NMG differs from other purchasing groups is in the additional services it offers in areas such as marketing, consulting and human resources. Kelly says that although other groups stress that they are “buying” organizations, NMG is a “selling” organization, meaning that it helps its members sell as much as it helps them buy.

“Originally, we were a purely buying organization, meaning we negotiated the deals and that was 100 percent of the services we provided,” Kelly says.

“We became involved with so many other aspects of the business that we formed what I would call a marketing organization that also buys. We never left the buying.”

The changing nature of the industry means that many of the services independent retailers used to count on from their vendors and suppliers have been reduced or eliminated completely, Weisner says. “Suppliers used to be able to come in and work with the retailer and train people, set floors, etc.,” he says. “Those services have mostly vanished.”

Purchasing Power
Purchasing was NMG’s original service, and the company still provides members with group-negotiated pricing from the world’s leading manufacturers. Kelly says the group’s distribution provides an advantage to members allowing them to purchase only what they want, so they are not restricted to the manufacturers’ requirements for shipments.

“You must buy a solid truckload, and an independent retailer in a small market cannot afford to buy solid trucks of one brand,” Kelly says. “[Our distribution centers] can deliver multiple brands within 24 to 48 hours and can get to about 85 to 90 percent of the country.”

Kelly says the group plays a significant role in the inventory of its members. “We actually touch about half of the independent retailers’ volume,” he says. “We influence it in some way, whether it is through negotiations or it comes through our warehouses.”

Beyond saving them money on their merchandise, NMG also lends members a helping hand through financial services. Kirk, who oversees the group’s financial services, says retail credit programs were one of the first ways in which NMG branched out beyond purchasing.

Among financial services, NMG provides its members reduced rates on credit card and bank card processing from Chase; insurance programs; health insurance consulting; and inventory financing from General Electric. In addition to these, the group utilizes its relationship with vendors to create promotional calendars that members can use to plan sales events.

Financial help is another back-office role that NMG offers its members, Kirk says. “Pretty much anything that a CFO from a company would get involved with, we touch in some way on the national level.”

The Public Image
NMG works hard to make sure its members get the best deal possible on merchandise, Kelly says, but the group’s efforts don’t end there. Backing up its purchasing capabilities is a network of support services that cover many, if not all, of the business tasks that are essential for independent retailers to thrive but aren’t always affordable or possible for them to achieve on their own.

Perhaps the most prominent of these value-added services is the creation of advertising and marketing materials, ranging from print ads to TV commercials.

“One of the important issues that retailers face today is how they get their advertising voice lifted in the marketplace,” Weisner says. “It’s very difficult for our member today to be that voice in the marketplace.”

Many of NMG’s members do not have the resources to produce top quality TV commercial and print materials. In the print arena, the group produces tabloid ad circulars that can be placed in local newspapers. The value of having a full-color, multiple-page insert can be huge for an independent retailer.

“If you saw 12 pages of exciting products in a tabloid vs. a half-page ad in your local paper, what would be your perception of that store?”

Best Face Forward
NMG helps to improve the image of its members in the media, but it’s also developing new ways to make its members look good in their own stores. The group already provides interior design and merchandising services for members, giving them the tools needed to build a new showroom or remodel their existing stores.

Weisner says this is beginning to work in independent retailer’s favor, as national chains like Sears have been losing market share due to out-of-date stores and less foot traffic in shopping malls. When presented with a choice between a dingy national retailer and a clean and up-to-date independent, consumers most often choose the store that’s the most professional-looking.

However, NMG is also looking beyond the interior design of a store to find other ways to make its members’ showrooms and merchandise stand out. Kelly says one of the biggest problems with TV showrooms is that if all the televisions are tuned to a regular channel, there’s a chance that at some point they’ll show something unappealing, boring or, worse, a commercial for a competitor.

NMG has developed a service for its members called MemberNet TV, that eliminates the potential problem and gives members greater control over the display of their merchandise. “We have developed and are launching a whole new model,” Kelly says. “For less than $1,000, a dealer can control his entire TV wall.”

Members will be able to log into the group’s intranet and call up whatever movies or other programming they wish to have displayed on their showroom TVs.

“If he calls up and says, ‘I want Niagara Falls or butterflies up there tomorrow,’ we’ll download it for him,” Kelly says, “If they would rather have something more serene playing, NMG can provide that, too. It protects their stores’ environments because they don’t want competitors’ commercials playing up there.”