Roy Bingham from ReNew Life – Podcast Transcript

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Shaun Ryan:  Hi, I’m Shaun Ryan from SLI Systems and this is the “E‑commerce Podcast.” Today I’m talking to Roy Bingham from ReNew Life. Welcome, Roy.

Roy Bingham:  Thanks very much, Shaun. Nice to be here.

Shaun:  Now Roy, a traditional question to get us started. What was the first thing you ever bought online?

Roy:  That’s a good question. I think it was probably a medical book on Amazon. I can’t tell you which one, exactly, but I work in a field of natural health care and some of the books are fairly obscure. Suddenly this thing appeared about 10 or 15 years ago and I could suddenly find any book I ever wanted. In fact, I think what got my attention was someone sent me a book from Amazon and said, “You’d better read this.” And that got me going.

Shaun:  So you saw the possibilities.

Roy:  Oh, yeah. Yes. Actually, I became an investor in some online businesses that sadly crashed when the market crashed, the dot com bubble burst in 2001, but I was bitten by the bullet at that point and was passionate about the potential. It was just that we were a little bit too early to the game then.

Shaun:  OK, interesting. So what was your most recent purchase?

Roy:  The most recent big one I can think of was a refrigerator. And then, we’re constantly buying things because my kids have access to my credit card so there’s iTunes transactions taking place every day.

Shaun:  Yeah, that’s just dangerous, isn’t it?

Roy:  Well, sometimes the only way I know is when I see the statement.

Shaun:  So ahead of the refrigerator…Where did you buy the fridge from?

Roy:  The fridge was eventually from a company called ABT. Actually, my wife completed the transaction, but she found it online; there was a particular one that she was looking for. They said they had it; interestingly, they didn’t actually have it in stock in the end. She completed the transaction online then I did the terrible thing that no one in a marriage should ever do which is I went online and searched for the exact same item and found it cheaper somewhere else…which is a really bad thing to do, but then I texted my wife and said, “I just found it at Sears for less money.”

She did it the old fashioned way. She called this company, ABT, and they gave her another $200 off. So in the end it all worked out and our marriage is still sound, or at least sound as it ever was.

Shaun:  [laughs] That’s a happy story, and the fridge was delivered, and you’re now using it?

Roy:  No. Actually, it is supposed to arrive on Friday, because it turns out that it’s a new inventory item and they didn’t actually have it in stock. But, they schmoozed her enough to keep her satisfied, so it’s coming this Friday.

Shaun:  You touch on a few interesting topics in eCommerce there, in terms of clearly communicating stock availability, pricing, competitive pricing, and how you respond to competitive situations. They all get touched on in that one transaction.

Roy:  Yes. Obviously, there is no capital item now that I wouldn’t term search for online. In fact, our last car pretty much was all negotiated online, again, by my wife, who got thousands off the sticker price by having identified other vendors, local vendors, who had online pricing. I just can’t imagine why anybody wouldn’t shop around online once they’ve identified what they want, or in order to do the research and identify what they want.

Shaun:  It also shows some of the challenges of being in the retail industry. So can you give me a little bit of background about yourself, Roy, and about the company?

Roy:  Yes, absolutely. Well, I’m English originally, so we have similar but different accents. I grew up in London, and my first career was in banking and finance. I became a corporate treasurer in London. Then, in 1993, I decided to move on, and I came to the US. I went to Harvard Business School, did my MBA there, and then I became a kind of consultant. I worked for McKinsey, the big consulting firm, for a couple of years, very much on big picture strategy consulting, which, it turns out, I didn’t really love. I wanted to get my hands on and make things happen, so I then went into the deals business, but with a specialism, and the specialism was the nutrition, or natural healthcare, industry.

I liked being in a place where I actually had something to say in those meetings based on my experience, rather than on knowing a methodology about how to do strategy consulting, and also my background was more deal‑oriented, so I founded a firm called Health Business Partners.

We became the leading mergers and acquisitions advisor in what we now call the nutrition space, and got involved in the infrastructure of that industry, creating newsletters, websites, summits, meetings, and that sort of thing, and pursued that for about 10 years.

It was at the end of that period that we started making investments into online businesses. As I said, we sort of lost our shirt. One in particular, called more.com, which looked like it was going to be great until the whole Henry Blodget thing happened, and I then went back to a little bit of deal making, and then started my own business, which was an omega‑3 fish oil business, and building a brand online, selling direct to consumer.

 

And then five years ago, the owners of ReNew Life, who I had known for 15 years, invited me to come and build their direct‑to‑consumer business, which did not exist at that time. That was a complete departure for them.

I saw the advantages of being with a brand, with an existing business, with already hundreds of thousands of customers who were buying the company’s products at that time in store, or through e‑tailers, and was delighted to jump onboard, and since then, have been building this direct‑to‑consumer and direct‑to‑professionals, what we call the direct division of the company.

Shaun:  Interesting. So can you give me a little bit of background on ReNew Life? How long have they been around?

Roy:  It’s a fascinating story. The company’s been around about 17 years. It was founded by Brenda Watson. Brenda Watson’s…you can go on YouTube and look for Brenda Watson. You’ll find a very interesting history of her early life. She suffered from a number of health problems, mostly digestive‑related health problems, as a teenager, and she went on a mission to try and solve those problems. Eventually she became a colon hydro‑therapist, and she’s a serial entrepreneur as well, so she had a chain of five colon hydrotherapy clinics, where she was treating people with problems like severe constipation, including a lot of Vietnam vets and people with various injury‑related problems.

What she found was that there wasn’t a good-quality fiber, or a good-quality oil, that she could recommend to those people. And as a serial entrepreneur, she designed and had a product made, bought a few hundred units, put them in the trunk of her car, and starting calling on health food stores, which was the channel of stores that she knew, and the rest is history.

She’s gone on to become perhaps the best‑known person in the American natural healthcare industry, with the number one natural digestive care company in America, with the number one probiotics company in health food stores, like Whole Foods, or GNC, or all the independent health food stores. We’re number one in cleansing and detoxification in that channel as well.

About three years ago, we also expanded far beyond that, so being in about 6,000 health food stores, now we’re in more than 20,000 drug stores and grocery stores, in places like Walgreens, and CVS, and Walmart, with our ultimate flora brand of probiotics, and we have over 150 products now.

Shaun:  What size is the company?

Roy:  Well, it’s still a family‑owned business, family and private equity investors. We’re about 130 people. We don’t really talk about the numbers, but somewhere in the $50 to $200 million range, if that’s a big enough range.

Shaun:  [laughs] Yeah, that’s a big range, but it’s quite the story. You were brought on five years ago to start the online side of the business. Can you tell me about how that’s progressed over those five years, and what are the challenges you’ve seen?

Roy:  Absolutely. The very first thing was that we did have a website back then, Renewlife.com, which is still the core of our business. We really only had Renewlife.com, and we didn’t even know how many visitors were coming to the site, because we didn’t even have Google Analytics at that time, or any other kind of analytics software. The first question that people ask me is, “How many visitors do we have, and how many of them are likely to become customers?” I say, “Well, we better get some software in place first before we start addressing that question.” It turned out we had about 10 or 15 sales and monthly visitors to the site who were coming for informational purposes, and we decided that some of those people would likely want to shop.

Now, that was a fairly controversial decision for us because, of course, we are very loyal to the health food stores themselves, and they’ve been very loyal to us, so for us to then sell directly to consumers might have seemed a bit disingenuous, but we’re also doing a lot of promotional work at the time, with Brenda Watson being on TV. She does PBS shows, educational shows, but they’re not allowed to mention the name of our brand.

We were driving people into the stores anyway, and the health food stores’ owners realized that, and realized that there was a symbiotic relationship with us. And the other thing is we said, “We’ll have a map policy on pricing, so we won’t undercut the health food stores.”

At the same time, our products were already offered by several dozen e‑tailers, and they were the people that we needed to control on pricing strategy, so we said, “We’ll try to take control of the pricing and we’ll sell direct,” and our partners, the retailers, have been very cooperative over time, and understood that that makes sense, that the channel is a very different channel.

People are walking into stores, and if they are served well within that store, will shop within that store still. That might not be true for large capital items, as we discussed earlier with refrigerators, but it still should be true when it comes to dietary supplements.

Shaun:  Yes, because it’s not like you’re necessarily price shopping for those, necessarily. [laughs]

Roy:  Yes. Yeah. The business has grown very nicely since then. Somewhat the surge is in growth, somewhat dependent upon our other promotional activities that we were doing, so we’ve had years when we grew nearly 100 percent, and then we’ve had other years where we grew at 10 or 20 percent, and on average, after the first full year of operation, we’ve grown a little over 30 percent each year. But we’ve done it very much in harmony with our multi‑channel presence, so there’s no attempt here to go out and cannibalize our retailer partners’ customers, merely to take our share of the people who are looking to buy online and looking to buy direct from the manufacturer.

Shaun:  This is a common problem that manufacturers have, how do they sell online and compete with their channels, but it sounds like you’ve got a nice balance. You have the policy of not undercutting them and of having, you said, maps, so you can drive people to the closest physical store where people can purchase them physically, right?

Roy:  Yes. We also very quickly put up a directory of all the stores, so that people can go and find someone in their ZIP code or in their geographical region, and we actually put links up to other vendors, other online vendors as well, on our website, and they’re still there to this day.

Shaun:  After you got the analytics onboard, and you got the directory up, I presume you had to get an eCommerce store in place. What technology did you use? What did you put in place, and are you still using that?

Roy:  [laughs] Well, that’s a very good question. Actually, the head of IT, before I joined the company, was a sort of hands‑on IT guy who had a bit of a hacker mentality, I think, so he had actually had someone build a store for him, which I would not have recommended. That’s what we used as our platform for the first 18 months or so. It had a lot of challenges associated with it, in terms of every time we made a change, we had to get the guys who programmed the site, an independent firm based in Miami, to make the changes for us, including very basic things like adding new products, adding prices, changing prices. And improving processes was terribly difficult and cumbersome, and cost us a lot of money every month in terms of development expenses.

I had had experience with my previous companies in using third‑party software‑as‑a‑service platforms as well as third‑party stores altogether, so I knew there was probably a better way. We set out on a project to…we came up with a 20‑item checklist, and did quite a lot of work, actually, at one of the Internet retailer conferences, where there were a number of platforms that were available, and we chose Magento in the end.

This was in the early‑ish days of Magento. We chose Magento’s enterprise edition, and I think we were one of the first 20 or 30 people to select the enterprise platform.

Shaun:  How’s the Magento experience been? You still on that platform?

Roy:  Yes, so we’ve been on that platform for over three years now, and I would say…people ask me this question, and the answer is it’s sort of a mixed relationship, kind of like a marriage. Mostly it’s very good, but every now and then you have frustrations. I think the cost of ownership for us with Magento has been a little higher than I expected it would be, in the sense of the ongoing development and maintenance costs have been a bit higher than I thought they would be. The original development and implementation was not too bad, but we took some decisions along the way.

We use a piece of software called Simple Configurable Products, which those who use Magento may be familiar with, and now every time we do an upgrade or a significant change to the site, Simple Configurable Products looms, and makes our life more complicated and difficult, yet we haven’t wanted to completely rebuild the database in order to get around SCP.

Shaun:  It just sounds like they should take the “Simple” off the name.

Roy:  [laughs] Well, unfortunately, it’s not even supported any longer by the developers who created it, even though it was a popular plugin. Yes, so I’d love to have a more reliable alternative, but we recently made a decision not to replace it yet, actually, and we’re just on the verge to upgrading to Enterprise 1.13, and sure enough, Simple Configurable Products has made that process much more difficult for us. In general, I would say we’re pretty content with Magento. We feel like we’re close to the forefront for a mid‑sized eCommerce company, but next time I come to evaluate, I will be looking – now that we have a fairly substantial profitable business – we’ll be looking at a full range of alternatives, including Magento.

Shaun:  Right, and do you use a third party for your Magento work, or have you developed that experience in‑house?

Roy:  That’s a good question. Yeah, we used Gorilla in Chicago originally to develop the site, and then we identified another development firm, originally called JFC, to be our contract developers, I suppose is the way to call it, where we had purchased a certain amount of hours, and that has evolved and is now called MagentoSWAT, so MagentoSWAT is the firm that we’re using for the ongoing maintenance and development.

Shaun:  So you’ve got Magento. Are there any other tools that you’re using that you would recommend to our listeners?

Roy:  Yeah. We’re hosted on Linode, and that seems to have been a good arrangement, and has saved us a lot of money from their original hosting arrangements that we had with one of the very expensive hosts, so that’s quite good. There is a lot of software, most people know, running on these sites. Actually, when we were at Internet Retailer in Chicago two months ago, I think we counted 18 vendors in the room that we do something with, and that have something, even if it’s just a pixel on the site. We use a firm called OrderGroove for auto ship capability, which is quite important in our industry.

When people start a regime of dietary supplements, it’s important to be consistent with it, so about 10 percent of people who come to our site opt to have a monthly shipment of the product, and OrderGroove gave us a lot of other capabilities so that they could have it every two weeks, every six weeks, one product but not another product.They could go in, and edit, and all sorts of other things, so it’s not one of those forced shipment auto ship programs, and the only way you can get off it is to phone the 800 number that nobody ever answers. It’s nothing like that.

We use BlueHornet for email. We’ve used BlueHornet for a great many years. Of course, we have all of the security stuff like McAfee, VeriSign, BuySAFE, and of course we do a significant amount of marketing with PPC, SEM, affiliates, a little bit of social media with some applications running, some display campaigning, and we now have about 20 different sites that are on particular topics, that end up feeding into our main site in one way or another.

Shaun:  So these are more content sites, are they?

Roy:  Yeah. We have about three Magento eCommerce sites, because Magento gives us that capability to do that under the one foundational license. The others are around the books that have been written by our founder, for example, or about particular products or sub‑brands that we have, and even some informational topics.

Shaun:  Is this one of the ways that you’re getting your 30 percent growth? Is it through this content? Is that what’s helping to drive the growth of the online business?

Roy:  Well, I’d like to think so, Shaun, yes. We have a lot of content. I don’t know that we’ve yet done a terrific job of formatting, presenting, syndicating, making that content interesting, but we have it in audio, video, written, just about any format you could imagine. We have our own TV recording studio here, so it’s relatively easy for us to make additional content, but I haven’t quite figured out how to cost effectively get new people, who are not familiar with natural digestive solutions, to see that content in large quantities. We probably haven’t had as much impact as, say, one Dr. Oz show in five years of trying.

Shaun:  [laughs] Something like a Dr. Oz show, or Brenda doing some promotional activity, that’s one of the things that really drives the traffic to your site, is it?

Roy:  Well, yeah. Brenda doing TV usually drives traffic to the brendawatson.com site that we created for her activities, so people will go to the web during the show, and very often will see a big spike in activity when she’s on PBS, and they’ll Google find her site. Go have a look at her site. From that site, there’s a relatively easy passageway to Renewlife.com and to a shopping process, so that’s one of the ways that that will happen. You know, Dr. Oz, I joke about it, but Dr. Oz, about five or six weeks ago, started talking about acacia fiber on his show. We didn’t know he was going to mention it, but he’s been doing a number of features on natural digestive care over the last few weeks, and we happened to be the number one acacia fiber company in the US.

All of a sudden, we saw a big pickup in traffic to this site on the term “acacia fiber,” and then, because we have SLI within the site, we saw searches within the site on acacia fiber, and we didn’t necessarily have a great landing page for them on the first day, but because of the flexibility of the SLI console, we were able to tweak the results, tune the results, and come up with a decent landing environment for people within a matter of a couple of hours on acacia fiber.

Since then, our sales for acacia fiber, in stores and online, have gone up about seven or eight times, which is kind of exciting. It wasn’t a huge seller for us, but it still illustrates the power of TV, as my colleagues say. Being more a digital marketer, I like to talk about alternative ways to advertise other than TV, but TV is still very powerful.

Shaun:  It just has the volumes of people watching it, doesn’t it that it’s difficult to get otherwise.

Roy:   Yes.

Shaun:  What do you see as the biggest opportunities going forward?

Roy:  Well, for us, it’s really about awareness. People in the US are not that aware that there are natural solutions to digestive problems. Only about three percent of the US population ever actually goes into a health food store, so only about three percent of the population is thinking about food and dietary supplements as solutions to prevent sickness and to improve their overall health. A big part of it is saying to people, “What you eat does matter, and there are supplements that can improve your digestive health,” and the other part of that is, and this is only something people usually become aware of when they turn about 40, is that if your digestive health is not working, everything is in danger, and if your digestive health is working well, then you’ve got every chance of being fit, and healthy, and having a good, long life.

When people make that connection, then they discover us, and of course, our job is to be in the right place with the right information for those people who are becoming aware.

Shaun:  That’s the opportunity to…

Roy:  It’s the other 97 percent of people, Shaun, yeah.

Shaun:  That’s a huge opportunity, isn’t it?

Roy:  It’s about 290 million people. It’s a decent opportunity.

Shaun:  Is your business just in the US, or are you selling internationally as well?

Roy:  It’s mainly in the US and Canada. We have a Canadian subsidiary that’s done very well. It’s been in that country for about 12 years. The brand has some awareness overseas, but we do not sell overseas through our eCommerce business because there are a host of regulatory challenges associated with that. Our products have to be registered in most countries in order for them to be offered. We have distributors in a handful of countries around the world, but if there’s anybody listening who’s interested in becoming a distributor and going through that regulatory process in their country, then please let me know.

Shaun:  It’s a good opportunity, and actually, that touches on something that we haven’t really talked about. The website’s primarily for business to consumer, but you’re also selling to your channel through the online side as well?

Roy:  No. That’s a very good question. At present we are not, no. We like to have contact by telephone and in person with the individual health food stores, and with the food/drug/mass stores. A major part of what we do is education within the stores, so we have over 60 people who are either here in our office, in Clearwater, Florida, or out in the field, educating and serving those stores, so the bulk of that is done direct one‑to‑one. Obviously, people come to our website. Our retailers come to our website and get information all the time from the site, but they’re not placing their orders through the site.

Shaun:  Roy, this has been a fascinating conversation, but I think we’ve probably used up our time. We’ve gone a little bit overtime now, but I do want to thank you very much for your time today, and for sharing the information. As I said, it’s been very interesting from my point of view, and I’m sure the listeners will have appreciated it too.

Roy:  Well, it’s my pleasure, Shaun. Thanks very much for having me. I hope people enjoyed listening to these two strange accents on the phone, and I hope it’s been useful, and to everybody listening, check out Renewlife.com or brendawatson.com, and look for us, Google us, and you’ll learn a lot more about what we do for natural digestive care. [background music]

Shaun:  Excellent. Thanks, Roy. That wraps up another eCommerce Podcast. I’m Shaun Ryan from SLI Systems. Tune in next time.