How Bill Miller sold the concept of buying groups to the UK KBB market
Ten years ago, the well-established European model of kitchen and bathroom retail buying groups was dismissed as unworkable in the UK. But then Der Kreis came along with the KBBG and kicked the doors open for others to follow. For UK managing director Bill Miller, it’s been a decade of perseverance and persistence…
Q: The Kitchen Bathroom Group (KBBG) is celebrating 10 years in the UK, but a decade ago there were some eyebrows raised at the idea of a buying group in the UK. It was very well established as a model in Germany so why do you think it hadn’t taken off in the UK before?
A: There were a whole range of reasons I think. The Germans looked at the UK market and had seen some similarities, but had also found a lot of things they didn’t really understand. For example, German kitchens were very contemporary, and we had a lot of traditional shaker-style products, which they just couldn’t get to grips with. But the main reason was that distribution was still very strong in the UK and most independent kitchen and bathroom retailers bought the majority of their products that way. Back in the day, distributors were kind of doing many of the jobs that buying groups did, and that was fairly unique to the UK market.
Ten years ago, for a whole range of reasons, some of the distributors had left the market or had reduced in size. More retailers were looking to buy direct and that was starting to suit the buying group philosophy and concept more. Der Kreis had looked at the UK on many occasions over many years with a view to coming, but had always decided it wasn’t quite right, but 10 years ago they decided the time had come to introduce it to the UK.
Q: Given that it was a very new concept to UK retailers, how did you get it off the ground?
A: First of all we had to try and create at least some sort of portfolio of suppliers, because to go out to the independents and offer them a reason to engage, we needed the brands. That was quite challenging because we were going to suppliers with this idea and, quite understandably, they were saying ‘who have you already signed up? Who are the retailers that we might know?’ But at that stage I was pretty much saying ‘we have no retailers signed up but I still want you to engage with us. I still want you to give us some sort of preferential deal’. I’ll be totally honest and say some suppliers at that stage said, ‘not for us, come back when you’ve got your first hundred members’. But others, like JJO or Caple, said ‘we’re intrigued by this idea, let’s give it a go’.
Q: It’s interesting that the examples you use are both British brands, presumably you had some German names on board simply because of the relationship they had with Der Kreis at home?
A: Yes, but literally a handful, friends of Der Kreis so to speak – Nobilia, Miele, Nolte – but that was nowhere near enough to go to independents and put forward a strong enough reason for them to engage. It was clear we needed some UK suppliers. So the early portfolio was probably 10 brands and the next task was to get retailers on board.
My career: Bill Miller
Managing director, Der Kreis UK
2013 – Present
Sales and marketing director, Gorenje UK
2005 – 2013
General manager, Miele UK
2001 – 2005
Divisional sales director, PJH Group
1993 – 2000
Regional sales manager, Bernstein Kitchens
1990 – 1993
We took it one at a time, starting with the figurative Aardvark Interiors and made appointments, drove around the country and presented our case. And a fair number said, ‘don’t really get it’ but, again, a reasonable number said ‘it sounds interesting, let’s try it’. So our first 10 or 20 members were very much that entrepreneurial type and then the momentum started and it’s grown ever since.
Q: Was there a fear that they may lose some of the independence that defines them?
A: Yes, in those early days many said ‘I’ve been an independent for 30 years. I’ve been successful without a buying group so why do I need one now?’ But I think the real fear was losing that independence. They thought maybe that they would lose the ability to buy from whoever they wanted, or that they might lose control of the money or have to have signage and big stickers everywhere saying you’re a member of this group.
Actually, of course, you don’t have to do any of those things, so once we get in front of them and have a discussion, they actually realise that they keep all the good things about their business, but we can maybe help them improve on the bits that need it. So, all of
our members maintain their independence and can buy and sell from wherever they wish.
Q: And that concept you paved the way for in the UK is now well established and we’ve seen MHK, Sirius, CIH, IPG and others become a significant part of
A: Competition is good and, this may sound quite surprising, but I genuinely welcome it because one of the objections we got in the early days – and it’s a hard one to overcome – is ‘if it’s so good Bill, how come you’re the only one?’.
But now the landscape is filled with buying groups, and I strongly suspect that there will be more coming in. We really do welcome them as they all have slightly different models and, hopefully, dealers will find the right one for them. It should also be said that for some retailers buying groups will never be right and that’s perfectly fine too.
Q: For a quarter of your 10 years, everybody was dealing with Covid and lockdowns. Do you feel that positively affected people’s willingness to listen to something new and seek out groups of like-minded people? You see it in buying groups but also the rise of some franchises.
A: Yes, I think so, and it’s hard to put your finger on why that is. We’ve seen a massive spike in growth, both in terms of new members and turnover and it all coincided with the pandemic. Everything changed, even for the most experienced and successful retailers, and I think it just made everybody re-evaluate their business and their life.
Maybe being part of this bigger group feels a bit like a cocoon giving you some sort of protection. Whether you’re a dealer in Wales or you’re a dealer in Folkestone, you share exactly the same issues.
So I think this kind of collegiate sense of working together as part of the community is really important and our growth has dramatically accelerated by probably two years because of the pandemic.
Q: You’re predominantly a kitchen buying group, there is a limited bathroom offering with the likes of Sonas Bathrooms and Grohe coming on board, but what are your long-term plans in that area?
A: All of our members sell kitchens but half of them also sell bathrooms. I don’t really see that changing anytime soon as I don’t see us necessarily chasing pure bathroom retailers, probably because I don’t think the offer is particularly deep enough, plus there are other buying groups active in that arena.
However, as half our members do sell bathrooms to some extent or another, we’ve really worked hard over the past year to give a much stronger bathroom offer to them.
Q: How close are you to signing up more big bathroom names?
A: Just like with kitchen companies at the very beginning, there are brands taking a punt on us and others saying to come back when we’re more established.
I’m glad to say that they are coming to talk to us now and I wouldn’t be surprised if in the next six to 12 months, we added some very large, very well-known brands. We have a growing membership of independent retailers and think that can only be good for the market.