It was another fantastic year for NMBS in 2019, as the Buying Society continued to grow despite a challenging market. BMN spoke to Managing Director Chris Hayward to find out more.

The merchant industry faced many challenges in 2019, with a difficult economic climate and low public confidence leading to an uncertain year for merchants and suppliers alike.

From its position at the heart of the independent merchant sector, National Merchant Buying Society (NMBS) was well placed to support its members through these challenges, while also striving to meet its own development targets. So, did the Buying Society achieve everything it set out to do during the year?

“We succeeded on all our key targets, which included over 8% growth in turnover compared to the previous year,” said Managing Director Chris Hayward. “This was a great achievement in what was an uncertain year for everyone. We also consider it a good indicator that independent merchants are still looking to grow their market share.”

In fact, NMBS welcomed 60 new members and 30 new suppliers to the Society during 2019, which is a clear sign that the independent sector remains in good health despite the wider economic outlook.

As well as encouraging new merchants and suppliers to join NMBS, the Buying Society was also busy completing new initiatives and developments to help make life easier for its existing members, including laying the foundation for some major IT projects that will be completed over the coming months. Many of NMBS’ IT systems will be moving to be Cloud based, while a new CRM system and EDI platform is almost ready to be launched to the market.

Moving forward, NMBS is continuing to develop a complete B2B marketplace that will allow its members to order products from suppliers online, seamlessly and at their convenience, whilst enhancing the invoice to payment process to bring even more efficiencies to the industry supply chain.

Chris explained: “Much of what we will introduce in 2020 will involve digital and e-trading improvements for our members, as we firmly believe we can harness this technology to make our members’ lives easier. More details on the changes will be published later this year, but NMBS is determined to help drive down costs for both our merchant members and suppliers – and to add value in the supply chain.

“The option to easily manage product data and speed up the payment process will add enormous benefits to everyone and, more importantly, will help future proof our industry, especially in the area of online trading. Independents are becoming key exponents of the one-stop-shop, so we must improve our offer to support them to easily sell any product to their customers and deliver it the next day.”

To ensure that it is introducing new features that its members are keen to see, NMBS encourages continuous feedback on its service proposition, and asks members to highlight what new benefits they want NMBS to provide.

NMBS measures this via the Net Promoter Score (NPS) system. The NPS index is a number, ranging from -100 to 100, which measures the willingness of a company or organisation’s customers to recommend their products or services to others. It is used as a proxy for gauging the customer's overall satisfaction with a company's product or service, as well as of the customer's loyalty to the brand. A ‘positive’ NPS score of 0 or above is considered ‘good’, 50+ is seen as excellent, and above 70 is considered world class.

Chris said: “In 2019 our Net Promoter Score increased to 45.99 from 40.09, which is a great result and testament to the fact that we are committed to continually improving our service proposition.”

The feedback gathered from NMBS members throughout the year reveals that members want access to good product data that they can use to update their own back-office systems and eCommerce sites.

“They also want good access to trade credit that is not easily withdrawn and that will give them good continuity of trading,” Chris said. “NMBS has taken big steps at the end of 2019 to double the amount of credit cover it can write, backed by non-cancellable credit limits from its own captive credit insurance facility, supported in turn by Euler Hermes.”

This means NMBS members can plan their trading options and target new growth without having to worry that their credit could be withdrawn with little warning, which has happened in the past when the major credit insurers reduced limits often without any notice.

Growth despite a flat market

Forecasts from the Construction Products Association (CPA) predict that the construction sector will remain flat in 2020, however NMBS remains upbeat and hopeful about the future.

Chris explained why: “The strength of the independent merchant is their ability to tighten their belts when things get tough and weather any storm that may come their way. Clearly there is still quite a lot of uncertainty related to Brexit, and this can be seen in the forecasts from the CPA. However, many of our members remain upbeat and optimistic for the year ahead.

“At NMBS, we are still budgeting for growth beyond simple price inflation. We are determined to add even more new members and fill any gaps in our supplier portfolio, to ensure we have deals with all the major suppliers to our industry.”

Chris also pointed towards the NMBS 2019 figures as proof that the independent sector is doing better than was perhaps feared, though he did acknowledge that some of this was dependent on the geographical region.

He said: “The NMBS turnover growth is above the norm, but we saw new turnover spikes towards the end of March and October of 2019 related to the aborted Brexit dates, as members looked to stock up prior to any change, which were often incentivised by suppliers. The good news was that much of that extra stock did sell through and reach the end customer.”

Chris was clear that there is much the industry needs to do as it continues to  modernise and welcome the new digital age and the opportunities that this technology can bring. He added: “We are pleased that the BMF has adopted the ETIM UK initiative, which will help drive product data standards, and we sincerely hope that all merchants and suppliers will support it.

“Yes, there will still be uncertainty related to Brexit in 2020, however we are hopeful that this does not provide too much of a drag on business activity and that the Government makes a sensible trade deal that acknowledges the importance and needs of the construction industry.

“Online trading will continue to grow and both merchants and suppliers must look at working together to service this extra channel to market, and to fight off any threat from the likes of Amazon-type companies.”

2020 Vision

Looking ahead for NMBS itself, 2020 is going to be a busy year as the Buying Society prepares for its annual NMBS Exhibition and Gala Dinner, which takes place on 21-22nd April at the Ricoh Arena, Coventry. As the number one buying and selling event in the independent merchant calendar, the Exhibition will once again be a key date in the diary for merchants to meet with new suppliers and see some of the fantastic new products being launched on the day.

Spot deals and exclusive special offers available for visitors make the Exhibition a  must-attend event, and independent merchants can register to attend online at www.nmbs-exhibition.co.uk.

Also high on the agenda is the return of the NMBS All-Industry Conference, which is back for 2020 with another stunning Italian destination – Sorrento, on the Amalfi Coast.

The Conference takes place from 18-21st June, with the theme of 2020 Vision promising some fantastic insights for all the delegates to take back to their businesses.

Chris said: “2020 Vision is a term often used to express the ability to see better than normal. What better opportunity to get an insight on the future for our industry than by attending the NMBS Conference and listening to keynote speakers around innovation, IT, Leadership and Management. The Conference will give merchants and suppliers alike the chance to take what they learn back to the UK, newly-inspired and ready to implement new ideas in their own businesses.”

More information on the NMBS Conference can be found online at www.nmbs-conference.co.uk.