Traditionally, buying groups have played an important role in retail. Edeka, for example, dates back to 1898, when it was founded as a purchasing cooperative of colonial goods traders in Berlin. While the initial aim was to bundle the purchasing power of small and medium-sized retailers to assert themselves against the newly established department stores, the alliance groups’ central offices later developed further services for their members. These include financing, logistics, marketing, market research, shopfitting, or IT systems. Individual buying groups act under one brand towards the end customer, e.g. Rewe, Intersport, Expert, and Hagebau. Other buying groups are unknown to end customers, e.g. EK Servicegroup or VME Einrichtungspartnerring.
Today, with digitalization and increasing competition from online retail, buying groups face the challenge of offering their members viable solutions. There is a dilemma between the sensible focus on a central online sales channel and the members’ independence. The latter often prefer decentralized solutions, which often do not deliver reach and success due to the individual retailers’ limited resources. Some trade associations try to solve this problem through a marketplace approach, reflecting the decentralized DNA of the trade associations. However, only a few concepts have shown real success. And many buying groups have yet to offer their members any answers or solutions to the challenges and customer expectations in the age of digitalization.
The threat today is no longer a department store but Amazon. But the relationship is double-edged because, as a retailer, Amazon is one of the biggest competitors. As a marketplace provider, Amazon provides small and medium-sized retailers with a massive digital reach and sales opportunity. Simultaneously, with payment, storage, logistics, hosting, and technology, the integration level offers added value to many small competitors. The rapidly growing share of sales from the marketplace and service business at Amazon should alarm buying groups. Meanwhile, Amazon is expanding its service portfolio to stationary trade with offers like their “Just Walk Out” cash register technology based on Amazon Go.