Slicing and Dyson

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\"RROK, here’s today’s retail quiz: How many companies that make household appliances have opened up their own stores on one of the most expensive retail shopping streets on the planet, New York City’s Fifth Avenue?

OK, time’s up.

The correct answer is zero…until now. This fall Dyson, the British company that continues to turn the appliance business upside down, will open its first U.S. store – technically it’s called Dyson Demo Fifth Avenue – down the block from such high-rent stalwarts as Zara, Uniqlo and Victoria’s Secret…not to mention only a short walk from another vendor-owned showplace, a little place run by a company by the name of Apple.

But vacuum cleaners and hair dryers on Fifth Avenue? Who does such a thing? Dyson does. As Steve Jobs was to Apple, James Dyson is to his namesake company, the heart, soul – and brain – of an enterprise that while privately owned, reports annual sales in the $3 billion range and employs some 7,000 people. Founded in 1987 by the itinerant engineer-slash-tinkerer, Dyson made its original claim to fame with its legendary vacuum cleaner and has branched out to a variety of home and commercial products including fans, heaters, hand dryers and its most recent introduction, a home hair dryer that retails for upwards of $400.

Not that high price points ever stopped Dyson. When it first introduced its vac, it sold for more than $400 when the best-selling products in the market from well-known brands like Hoover, Bissell and others barely broke the $100 mark.

Dyson came to market with what it claimed to be a better product and it put a huge marketing effort behind the launch.

Within 18 months, Dyson was number one in market share in dollars and by the end of its third year in the US market it was the leader in units too.

Dyson was a disrupter before we knew the term even existed.

Which makes betting against Dyson Demo Fifth Avenue a foolish wager. Even with rents reported to be in the $3,000 a square-foot range (at just over 3100 square feet you can do the math), the store is just another piece of the Dyson strategy to differentiate itself from its competitors.

And this will be Dyson’s second store, the company having recently opened one in London with a similar strategy of exposing its products to locals and tourists alike.

Of course, one can’t forget the entire history of suppliers opening their own stores. Apple has certainly been hugely successful with its efforts on both the sales and marketing fronts. But does anybody remember when a former competitor, Gateway, opened its own stores with an odd farm theme, right down to the cow décor? If you don’t recall them it’s because they were a huge flop and Gateway itself is long out of business. Microsoft has made a modest effort with its own stores and others, like Samsung, have dipped their chips in retailing with mixed results.
But again, a household appliance company? To those who are skeptical, you can make the case that this is exactly what home furnishings vendors should be doing to create experiential environments for shoppers. And for retail landlords, this is the kind of place that will get people off their phones and back into physical stores.

I can’t wait to see Dyson Demo Fifth Avenue. It may be the first store in retailing history that will suck…in a good way.

Warren Shoulberg is a journalist specializing in the home furnishings industry, now serving as a contributing editor to several Progressive Business Media publications. And, yes, he has a Dyson vac…and believes it is worth the money.



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