There’s a feeling of déjà vu for Warwick Grey as we meet to discuss the brand that’s had chins wagging furiously since The Channel first broke news of its emergence in July. Wind the clock back 21 years and the sprightly former nurse was only too happy to shout about the small, new-breed software company he and his brother Trevor were engineering from the ground up. They would call it Renaissance, award an Auckland University of Technology student $250 for her eye-catching logo design, and long would that distinctive red ‘R’ be embedded in our consciousness from that day on.
There’s no shortage of that energy in Grey’s voice today. He’s eager to kick speculation to the curb and satiate an industry hungry for a tell-all on Renaissance’s new identity, ‘yoobee’ – that off-the-wall name channel insiders have criticised for being Americanised and gimmicky, but a name for which Grey and CEO Richard Webb harbour desires for brand excellence reminiscent of Branson’s Virgin. Why don’t we ‘get’ it? What’s been lost in translation?
That’s the crux of this interview, because months of defensive PR fuels talk that Renaissance has been feeling decidedly fragile of late, following a spate of headline-making departures by high-profile members of staff, not to mention the loss of exclusivity on three of its major distribution accounts – Apple being one of them. Noise made about gratifying contract wins, including Fuji Xerox, Penguin Group and Micronet, has been muted by news of those accounts lost or divided.
Dismissive and sometimes inconsistent "no comment” responses to our press inquiries have raised eyebrows and fired up fierce reader reactions to subsequent news reports on TechDay.com. Whatever their reasons for the hush-hush approach, or at least the perception of it being that way, it’s not been easy to buy into the yoobee vision, as so many perfectly reasonable questions have gone unanswered.
Why did they rebrand the rebrand, with the release of a new logo just four months after version one was unveiled? Why are so many staff packing their bags and trooping off to the competitors? What products can we expect to see branded yoobee?
Selling the "story”
Webb is noticeably absent. Instead the roundtable line-up features Communications Manager-cum-Channel Marketing Manager Joanna Burgess, Director of Sales Brett Hjorth and Grey, who has been reincarnated as Chief Marketing Officer having grown and then sold Renaissance, as it was, to investors in the mid 90s. Grey has since built his reputation as an experienced strategist, with companies including Microsoft, Corel and most recently Hewlett Packard, where he worked with Burgess. She joined Renaissance seven months after closing the door on a 15-year role as HP’s Channel Sales and Marketing Manager. Hjorth joined from Kyocera and he, Burgess and Grey have all been with Renaissance less than six months.
"Richard’s really done a lot of talking lately, so we’d rather try to get the people who are actually relevant to the channel to talk about it,” said Grey, as he recalled interviews in which Webb had whimsically alluded to Yoobee’s role in marketing futuristic home automation products like internet-connected light switches.
"I felt up until now there’d been far too much focus on the brand and on Rick and not nearly enough on the fact that it’s business as usual for us.” Yoobee is "just a new name for our business; it’s not a new concept”, said Grey, aware that "if you don’t hear the story, then people obviously just seal over and think ‘what the hell’s that?’”.
"We’re just trying to put everything together to make it link to a single story of what Renaissance is. The overall strategy is to diversify and that’s what has been going on for the last five years, with the Natcoll purchase, the MagnumMac purchase, Insite. That’s led to Conduit for e-commerce development, which has led to a need to bring it all together. Enabling creativity is what Renaissance has always been about. It’s Apple, it’s networking and peripherals, it’s products, new appliances from Insite, it’s training, service support and app development. I can say that in a minute and it makes sense.
"Everyone buys IT products or services for a reason, and we’ve been looking at the item, not the reason. Yoobee is going to change that. We’re not planning to be the latest iteration of box pushers. Yoobee locations are going to be a mix of studio space, a café, ‘open mic nights’ and exhibitions.”
Yoobee is about doing something new, says Grey on his first blog post at yoobee.com, "it’s not going to just take over the suite of brands you know. Renaissance, MagnumMac, Student IT, Insite and Natcoll are not going anywhere for a while. Yoobee is a project, to see how we can make our dream happen. Someday, all of our brands may naturally fit within yoobee”.
A steady rollout
It’s largely the consumer retail side of the business that will, at this stage, see the change. Browse online for MagnumMac.co.nz and you’ll be redirected to new-look nz.shop.yoobee.com where customers can shop for items including mobile devices, accessories and software. Existing customers visiting MagnumMac.co.nz were encouraged to re-register, as their account details would not be transferred automatically. They had until December 1st to retrieve and record their sales history before their old MagnumMac account was deactivated.
"We will eventually change everything over and they’ll buy from yoobee, but that may not be for another 12 months or so,” said Grey.
"There’s been no real intent to hide anything; I don’t think we’ve done that at all. I wanted to have a full brand system and framework that made it more obvious, and it’s taken me some months to get that to evolve into a system that makes some sense, so some of that hasn’t been revealed yet. When we’re selling a training course it’s not sold as the Apple Mac training course; it’s sold as ‘Create, direct and deliver your movies’. It’s much better linked to what the customers need to do. Renaissance as a distributor wasn’t set up like that; it was set up to sell product and that’s not the environment we are in now.”
On Grey’s arrival at Renaissance, the yoobee name had been decided and some creative had been done, but he felt that in order to drive a much broader solution to the business issues, he needed the freedom to engage someone he believed "is the best strategist for that”: Brian Richards, who has worked with brands including Steinlager Pure, University of Waikato and Fisher and Paykel Appliances. "I was given the opportunity to do due diligence on what I was inheriting,” he said.
It’s about channelling a customer’s potential and showing them the scope of their ambitions, says Grey. "When I went through my own research and was asking people what they needed, it was really clear no one was listening to them about their needs. It was very much about what they wanted to sell them, so that’s why the yoobee logo changed. The whole logo is now made up of letter ‘U’s joined together.
"If you walk into a fashion store, you see everything set up on the model – the jacket and the shirt – and you think wow, that all goes together really well, that would look good on me, but if you go into a retail store, like a Harvey Norman or a Noel Leeming, or even to a reseller, you would never see the potential. They’re trying to sell you something off a price list. If you wanted to be a musician and you said ‘I want to see a Midi keyboard connected up to my Mac, can someone show me how that actually works before I buy it?’, it couldn’t happen. If you want to be a photographer, you see a Mac with everything a photographer might need around it somehow, because that is a retail experience not being had. That was what really drew me towards what Renaissance and yoobee can really be.
"With the economics of the MagnumMac retail experience married to this new way to present products,I think we’ve got an incredibly unique retail proposition that nobody else is matching yet.”
Channel confidence wanes
"Business as usual” for Renaissance has come with its challenges in recent months, what with the loss of Apple exclusivity to distributor Ingram Micro, and Ruckus Wireless and SonicWALL to Connector Systems. Channel partners are understood to have been frustrated with the constant state of change, and sought to find stability and superior service elsewhere. Not only that, but resellers have also questioned why they would continue to buy from Renaissance when the distributor is ambitiously pursuing a direct model. Is Renaissance cutting people’s lunch?
"We’ve talked about deal registration,” said Grey. "If they want to let Brett know that they’re working on an RFP, or that ‘these are my client sets, please don’t compete with them’, so long as they’ve got the competencies to service those clients, we won’t.”
"Our strategy is to offer greater value to the resellers,” continued Hjorth. "Distribution is a fairly traditional sort of business, so we’re looking at ways we can push the boundaries and do things differently. We add value to them, and give them opportunities to go into new markets and create revenue streams in other areas that they don’t traditionally do. I think that’s the key to getting them coming back and continuing to deal with us.”
"The channel business is still very important to us,” added Burgess. "It’s more than 50% of our business, so there is no intention to move away from our channel business; in fact we want to grow our channel business.”
The value-add is a something the Renaissance team feel it has real ability to deliver, particularly with training. "People don’t do it well,” said Grey, "They don’t learn their products well enough. People need to get more out of their investments. If one of our resellers wants to be able to sell Canon cameras it would be great for them to be able to say ‘buy this Canon video camera and we’ll give you a discount off this course at Renaissance training’, to show them that we’re also wanting them to get the most out of their client relationships.
"And while we do have a direct strategy, it’s not at the expense of the channel at all; in fact we’d rather the channel thrived on all these things as much as possible if they would be open to that. If we’ve got gaps 24 hours before the course starts, we’ll let you go on it for free.”
Renaissance has two training rooms on-site, catering for up to 40 people at any one time. Another niche offering is the newly-opened 24/7 contact centre at the Onehunga head office in Auckland. It’s currently taking over 600 calls a day as a result of consolidating all individual business unit phone numbers into one single 0800 number, implemented for training and monitoring purposes. "It is a value-add that we can say ‘we’ll answer your phones for you after hours and at weekends’,” says Grey. "If it’s an emergency, we can alert your engineers anywhere in New Zealand. We can back-end those services and resellers can sell them.”
A bite of the Apple
Speaking of the percentage of the New Zealand Apple business Renaissance expects to keep with the dual distributor arrangement, Grey asserts that Apple’s market share here is at a record 11% and that’s something they’re keen to retaina piece of. "Clearly another distributor adds choice to the market, but we really want to try and keep the customers we’ve got for as long as we can with all the value-add services that Brett and the company offer.”
It’s important to remember that Renaissance has generous Apple technical expertise, having worked alongside the brand, understanding "their logistics, their promotions and their processes”, for more than 20 years, says Burgess with notable confidence.
"Having choice is important for the channel. It’s a very big leveller. I was quite pleased to be able to say that finally, when they have choice, they buy from us because they want to, not because they feel that they have to.” Being an Apple Authorised Service Provider and an Apple Authorised Training Provider gives Renaissance a leg-up over Ingram Micro, which "is not any of those things” according to Grey.
"All our people think of us mainly as the Apple distributor. The other parts of the business that are good are really good. They just need a bit more profile I think; certainly the services and the app development. Bidvest have processed $750m of orders on our e-commerce platform. My Secret Diary is a consumer iPad app – that’s had 100,000 downloads. We’re developing a new journal for men. Any business problem that people want to solve on mobile devices, we are the partner for that.
"The fact that we can do app development and Google Android development: resellers should love that. It’s not a sale if we don’t ask our clients if we can offer them some development services as well.”
There’s always churn with vendors, continued Grey, so while some of the networking products have gone dual-distributor, as Apple has, others "have come to us and said they want us to be exclusive because of the value we can bring. Micronet is wireless networking. It’s lower priced than competitors, it does a function and audio quality is the same. Probably the value and volume of that is bigger than many of the others we’ve got”.
Plans floated that suggested yoobee might develop a rival tablet to the iPad were quickly dismissed by Grey when brought up, and attention was drawn to an impending roll-out of yoobee branded laptop bags, accessories and peripherals – things known to have better margin than Apple products. "Can we offer it through our channels? That’s big criteria for us.”
He didn’t rule out his interest in probing further into discovering how exactly to compete with Apple in future, however. Others, like HP, have dabbled via Windows 7, but we’ve yet to see a launch of a device that could catch the leggy Apple iPad in its stride – largely, Grey believes, because there’s no match for the ability to connect to the "amazingly rich software called iTunes, or to app stores where you can download anything”. Apple has a global monopoly that is strangling product development.
The economics of retail is about the upsell, and you can only do that by knowing what a customer does, says Grey. "We will never ask in a retail store again: what do you want to buy? The question is always going to be: what do you do? What do you want to do, what do you want to be? We’re trying to get everybody into that.”
Despite the obvious enthusiasm and engagement in the room today, there’s a distinct impression that much of the intents and purposes of the forward-looking strategy have hurtled right over the heads of long-time Renaissance employees, flagged by the mass exodus of some 26 staff members in this year alone – a figure Burgess suggests is a mere blip when there are more than 400 people working for Renaissance.
Although the number is certainly high, it’s more the calibre of the departed, and their chosen allegiances, that have prompted gasps from onlookers, thrusting Richard Webb firmly into the public’s gaze since his appointment to CEO in January of this year. He joined Renaissance following the high-profile resignation of Paul Johnston, now Managing Director of Simms International Ltd. Webb now appears to be battling with a popularity crisis as a result of the big brand reveal.
Waning staff buy-in and personality clashes aside, little more than six months into his role Webb announced that the company had reported a 150% profit increase for the first half of 2010 compared with the same period in 2009. Top-line revenue grew 7% and net debt had reportedly been slashed from $3 million to less than $500,000.
"I did get some flack at the beginning because I talked about people not really getting the vision, which is partly my fault because that’s how I saw it,” admitted Grey, as he addressed the issue of leader loyalty. "I think it’s about the company needing to change quite a lot, and that has created attrition for the people that weren’t willing to go along with the changes. With jobs comes accountability, and you’ve got to be accountable for the actions.”
It opens up the door to new talent, agreed the team. "We’ve asked everybody in our company what their passion is,” said Grey. "We’ve asked them to tell us which of the creative endeavours they feel most excited by, and each of them will create and be a part of the individual communities that will evolve around things like photography, filmmaking, music, design and fashion.
"I hope we’ve dispelled some myths. I don’t think we’ll have finished with people leaving us, because that happens in every organisation, but I’m hoping that they’ll stay within the ecosystem. We’re bringing in people we know. A lot of it is word of mouth, but there’s certainly been no shortage of applicants.”
Whether new brand yoobee can shake off the stigma that’s plagued the company this year is a matter for ongoing debate, but perhaps with Grey and Webb’s buoyant vision of a creative, self-managed community and a unique market proposition that’s not been tried before, we might see the company’s fortunes turn. Could we eventually witness a litter of copy-cats tip-toeing up the rear? Watch this space as their story continues to evolve.