Thoughts on Retail, Cont'd

I've made this point before, but posted this in response to someone on the Yahoo Message boards who thinks iRobot shouldn't emphasize direct sales because it would hurt channel partners:

The point that you need retail to sell product and show the product, which remains a foreign oddity to most, is absolutely true. The problem is that iRobot's retail partners almost never show the product working. I remember Scooba demonstrations that lasted maybe two weeks at Brookstone, and that was it. (Even when Demos were set up, the batteries were often dead). Otherwise they just sit in a box and look like an expensive toy instead of the "real" vacuums that come in bigger boxes and suck 12 amps.

Apple faced this problem with the Mac. They could get retailers to stock them, but not to sell them properly. They didn't know how. Clerks were ignorant, selection spotty. CompUSA came the closest to a decent experience, but they still relegated Macs to a tiny far corner of the store that was only likely to appeal to the narrow slice already looking to buy one.

That's why iRobot needs its own stores. They wouldn't just have to sell iRobot products (robot toys come to mind), but there are a lot of iRobot products already available. Roomba, Scooba, Verro, Dirt Dog, Create, 2 New Mystery Products this year, Mowba next year. You could easily fill a store, and it would be one cool store. Kids would want to check it out. They'd drag their parents inside. Adults would check it out. They'd see the Demos, they'd see that the darn things work. They'd learn how to care for them. They'd buy. (Or go home and search where to find it cheaper).

Will this hurt relations with existing retailers? Sure, to an extent. But it will also force those that remain with you to upgrade their experience, and there will be spinoff benefits to the expansion of the brand to people who would never have considered buying a robot vac, etc., until they walked into the store. Apple reports 50 percent of the Mac buyers at its stores are new to the platform. (And it's easier to upsell in person than online.) I bet iRobot store customers would have a much higher percentage of converts.

Ultimately, if your product becomes a mass market hit, it is irrelevant that you are competing with your retail channel partners. Does Target refuse to stock iPods because Apple has stores? Of course not. (And you couldn't get much worse placement of iRobot products than the tiny shelf slot Target gives to Roomba.)

iRobot has found some success with the infomercial format, which I applaud them for, but even an infomercial isn't as useful as a physical store in a high-traffic mall for convincing the casual buyer to drop some dough. There is also a danger in infomercials in that the products invariably get tagged by some viewers as a gimmicky infomercial product. But there really is no other quick option for iRobot -- it's the only way to guarantee quality exposure of its product to new customers beyond the free media coverage that they have earned in the past.

Moral of the story: Open up some stores. Preferably in the same malls with Apple stores. (Apple has already done the market research for you). Start cautiously but do it right and there will be big rewards.