A Robot Store in Every Mall? IRobot CEO Discuss Firm’s Efforts to Boost Retail Sales
Who couldn’t use a robot or two to help with household chores? To make finding that robo-helper easier (and to boost holiday sales) Bedford, MA-based iRobot (NASDAQ: IRBT) announced last week it was opening a kiosk in the Burlington Mall that will show off its Roomba robot vacuum cleaners and other bots for gutter cleaning, floor washing. The kiosk opened on Saturday and will close in mid-January.
A kiosk opening isn’t something we normally cover in Xconomy. But especially since the head of iRobot’s home robots division left last May–in what seemed to signal a shake up in the company’s consumer business—I wanted to know more about what the mall outpost portends for the future of home robots, both at iRobot and more broadly. To that end, I spoke with iRobot CEO Colin Angle, who sketched a vision of robots transforming household drudgery in much the same way (although he didn’t draw the exact parallel) that electric appliances revolutionized things like dishwashing and laundry a few generations ago.
“As we roll the clock forward you’re going to see more and more home robots…and the concept of a robot store is going to be something that every mall is going to want to have,” Angle says. IRobot’s kiosk, he says, is “one of the first practical robot stores ever to be in existence that wasn’t focused on meeting the needs of the hobbyist. I think it is an important milestone in our industry.”
In Angle’s world, there are two types of people: “those who own Roombas and believe, and those who don’t own Roombas.” On the home side of the business (the company also has a big military division), iRobot’s challenge has always been reaching that second group, and convincing people that “practical robots are here, and they can be saving you time and giving you more control over your home.”
Enter the kiosk. As Angle puts it, “nothing can convert a skeptic into a believer like a live demonstration.” The company has been thinking about a retail presence for quite a while, he says, “and felt like we now have a broad enough array of products that we could at least justify a kiosk.” Staffers will experiment with direct sales of a few items, but will mainly demonstrate products and help customers order online as the company tests its messaging, training, and so forth. And while the kiosk will shut down in mid-January, says Angle, “Certainly if it goes well then you have not seen the last of kiosks for iRobot.”
But what about the bigger picture? IRobot recently released positive third-quarter numbers that showed sales up 45 percent over the same period last year, with the home division driving the revenue increase. But margins can be tight in consumer products, and it’s not clear how much of the third quarter’s small ($3.9 million) profits, if any, came from the home division. In any case, the division seems to be in the midst of an overhaul. In May, the company announced the departure of home division president Sandra Lawrence. Since then, the home business has been led by interim general manager Jon Elordi, who previously ran the firm’s international business. IRobot also hired an operations chief from Gillette to improve supply chain efficiency and gross margins. But the company is still running in the red for the year, and Angle acknowledges the economy isn’t helping the overall picture. “Right now we’re in a period of great uncertainty in the economy, and it’s impacting consumer-facing businesses in other industries throughout the country and throughout the world. So there’s a lot of wait and see,” he says.
Despite my best efforts, I don’t feel like I got a detailed picture from Angle of what is going on right now in the consumer division. But the iRobot CEO seemed generally positive about the longer-term future—and especially the growing consumer presence of robots. “The Roomba has shown that there is a very interesting and exciting market for robots that can deliver the goods,” he says. “This is here to stay.”