Article: BPGI relocates to Europe
| 22 January, 2016
BPGI CEO Barrie Hayes: “BPGI has opened up membership to include independent resellers outside of dealer
BPGI was formed back in 1996 to maximise buying competitiveness for independent dealers through their dealer groups. In 2015, BPGI’s three Australasian members ended their purchasing agreement, which left a core membership of European dealer groups. BPGI CEO Barrie Hayes spoke to The Office Times about the association’s new structure and its plans for the future.
What were the major decisions taken at the AGM in Lisbon?
One of the fundamental decisions was to transfer BPGI from the U.S.A. to Europe. BPGI is currently being registered in the U.K. as a Limited Liability Partnership working from one of its members, Integra Office Solutions. The new organisation reflects the European-centric membership and avoids costs relating to currency fluctuations between the euro and dollar and the difficulties of management.
Another key decision from Lisbon was to open up membership to independent resellers outside of dealer groups. For example, a large, warehouse-based contract stationer or wholesaler could now potentially become a member of BPGI. Under the new Chairman leadership of Aidan McDonough we are keen to develop the benefits and opportunities for membership and vendor evolution.
Do you see this as helping expand membership in important European markets such as Germany?
Germany is a very large market for office products, but it is necessary to have the right kind of membership that is compatible with the goals of our organisation. There is not a plethora of dealer groups in Europe, so our change in policy concerning membership profile now allows us to talk to more companies in Germany than was previously possible. Elsewhere, we see opportunities to expand in the Nordics and Eastern Europe.
How do you account for the reduction in membership over the last few years?
Membership has retracted for a variety of reasons, but not because the BPGI is no longer relevant or offering value. Vendors have organised purchasing agreements for a number of years on a regional basis rather than globally. Therefore, once one member decides to leave BPGI, the others in the same continent tend to follow suit. This is what happened in the case of Novexco in Canada, which maintained its presence at BPGI until it became clear that it would be the only remaining North American member. We have seen a similar situation this year in Australasia. Office Brands, the largest Australian dealer group, is still continuing its membership, but its purchasing agreements are now outside of the BPGI framework. Despite this reduction in membership, there remains a core of major European organisations that see significant value in BPGI. In addition to purchasing agreements, it offers a platform for networking and best practice, which is why Office Brands decided to continue its membership.
What is the feedback from vendors concerning how BPGI is changing?
Vendors understand that the market is changing fundamentally for everyone. Amazon is continuing to grow and there is also still a possibility the Staples-Office Depot merger will happen and remove a major player from the market. Vendors are looking to expand geographically and increase their presence at every level. The dealer groups that are represented by BPGI have members that are primarily involved in the SMB sector. This is more brand-oriented than the market for larger companies which have moved more to private label. Therefore, BPGI remains an important outlet for vendor brands and we are still seeing growth with a number of members.
Is having your own private label still up for discussion?
Ideally, it would have been better to create a private label brand 10 years ago before certain members had invested in their own brands. For example, Makro is currently developing a chain of retail shops based on its private label range in Spain. Also, in some countries, such as the U.K., we have multiple members that need to offer some kind of differentiation. This means that I can’t see a BPGI badged private label on the horizon. However, we are looking at how we can reduce costs and add value in other ways. For example, there are gaps in some markets that could be filled by products from members in other countries. The key point is to understand what the demands are in terms of quality in each market and agree on that going forward. The best-practice aspect of BPGI has already been proven to help members save money.
What aspects of best practice are currently most relevant?
Sharing information has always been an important benefit of BPGI and this year members are focusing on IT in terms of sales and marketing and also database marketing. It is an area where some members are far more advanced than others. The discussions are based on best practice and how to reduce costs. In the past we have looked at topics such as training and warehouse management. An umbrella group such as BPGI will never play the same role as a local dealer group, but over the years we have created an important list of areas that members can tap into. It is hard to quantify financially the benefits of this aspect of BPGI, but as mentioned previously, it is one of the reasons that Office Brands continues to be a strong supporter of the organisation.
How confident are you for 2016?
The current members that met in Lisbon for the AGM are all on board for 2016 and endorsed the organisational changes we are making to simplify the structure and reduce costs by bringing BPGI to Europe. Also, by changing the membership criteria to make it more attractive to different company profiles outside of dealer groups, we will be in a better position to expand in and around Europe. All our vendor agreements for 2016 are in place, and the majority of those have already signed for 2017. Once the new structure is in place it will enable a strong platform for BPGI to move forward.