Dyson's Magic Carpet Ride
By Beth Carney
In the 1980s, when British industrial engineer James Dyson first tried to interest appliance makers in the bagless vacuum cleaner he had invented, no company was willing to license his product. Retailers doubted the upright vacuum with its clear canister and bright-colored parts would sell, the brand was unknown, the machine "strange looking," and its price tag high. As Dyson admits, "it didn't have much going for it."
Eventually, a few retailers agreed to stock the Dyson cleaner and, in two and a half years, it became England's best-seller. Recently, Dyson announced a new milestone. Three years after its U.S. debut, his creation became the market-leading upright cleaner, according to 2004 fourth-quarter sales figures. Selling 891,000 units, up 350% from the previous year, Dyson captured 21% of the U.S. market in dollar terms, beating traditional leader Hoover, which claimed less than 16%, according to market research company NPD Houseworld.
The English company, based in Wiltshire, is entirely owned by James Dyson, who says worldwide sales last year grew 54%, to $798 million, and that profits more than doubled, to $192.80 million.
What lies behind the success of the Dyson cleaners, especially given that they're anything but cheap? Priced from $399 to about $590 in the U.S., a Dyson costs more than twice as much as most rival models. Moreover, the marketing campaign for the cleaners has stayed decidedly low-key. Straightforward TV commercials feature the 57-year-old Dyson in his lab, calmly explaining how his frustration with ordinary vacuum cleaners prompted him to create a better machine.
According to Dyson, superior technology explains his brainstorm's popularity. Traditional vacuum cleaners collect dirt by sucking debris-filled air into a bag -- and clean air out of the bag. The problem, Dyson says, is that dust quickly clogs bags and filters, reducing suction power. Without bags or filters, Dyson vacuums employ the "cyclonic action" of centrifugal force to draw the dust into the clear canister. Because there is no bag or filter to clog, his cleaners stay powerful. "They maintain constant maximum suction," he says. "All the time it's working to full efficiency, cleaning your home."
Independent product reviews of the various Dyson cleaners on the market, however, have not always brought raves. In February, Consumer Reports tested Dyson's DC14 Complete upright, one of the top-of-the-line models, which comes with the patented RootCyclone suction technology, found in all the inventor's models, and a feature that allows users to easily remove the suction wand for cleaning hard-to-reach places. The publication concluded that the $570 cleaner, "proved very good overall, but neither as good nor as low-priced as plenty of other vacuum cleaners we tested."
Good Housekeeping magazine's October test of the standard $399 Dyson DC07 determined that it "had the best pull" but "didn't suck up debris nearly as well as the winners."
WORKS? FUR SURE!
Yet the Dyson has developed an intensely loyal following. The company's research in Britain found that 70% of all users bought the machine after recommendation from friends. In a survey last year, Which?, a nonprofit British consumers association, named Dyson upright cleaners as the brand most likely to need a trip to the repair shop -- yet it also revealed that owners were likely to recommend the brand.
Even a brief look at Dyson users' reviews on Amazon.com (AMZN ) reveals, in many cases, a level of enthusiasm rarely associated with household appliances. Among the headline comments: "I LOVE this vacuum!" "Believe the hype!" "WOW."
The gushing online reviews persuaded Ann Vick, an owner of two dogs, to pay upward of $500 two years ago for the premium Animal model, specially designed to pick up pet hair. Though she describes herself as frugal and cynical, Vick transformed into a believer the first time she used the machine and saw exactly how much debris its clear canister collected. She now extols the vacuum to her canine-owning friends and even gave her best pal a Dyson as a wedding present.
"Nothing else compares to this thing. What comes out of my carpets is absolutely terrifying," says Vick, a 33-year-old sales representative for a technology company in Seattle. "I just tell people I know, 'You've got to get this vacuum.'"
Tim Calkin, professor of marketing at Kellogg School of Management, says Dyson has succeeded by bringing something new and innovative to a market that had focused exclusively on price. "They certainly have set themselves up as a superior vacuum cleaner," says Calkin. "They've almost made it an aspirational purchase, but people who buy Dysons really like them. People take pride in their vacuum when they own a Dyson."
Indeed, Dyson cleaners have benefited from some glamorous associations. They've appeared in episodes of TV shows Will and Grace and Friends (used by Courtney Cox's compulsively clean character Monica) and were included in the presenters' gift bag at the last Academy Awards ceremony (see BW Online, 2/11/05, "Shmoozing Celebs Is a Whole New Bag"). Their distinctive styling and bright colors, originally considered a drawback by retailers, have acquired cachet. The cleaner has appeared in exhibits at New York City's Metropolitan Museum of Art and London's Victoria and Albert Museum. Last year, fashionable mannequins wielded them as props in a window display at high-end Manhattan clothing store Barney's.
To Dyson, such honors for a humble cleaning machine seem highly appropriate. A graduate of the Royal College of Art in London, he designed and sold a wheelbarrow supported by a sphere rather than a wheel, before shifting his attention to vacuum cleaners, which he admits have fascinated him since the late 1970s. The vacuum cleaner "had gotten into a big rut," says Dyson. "It had become a rather boring, unloved, inefficient object, but I found it a rather interesting challenge."
STILL EATING HOOVER'S DUST.
It took five years and 5,127 prototypes to come up with his first bagless cleaner, which started selling in Japan in 1986. Since then, Dyson has expanded the business to 37 countries, shifting his factory from England to Malaysia. Still, he continues to develop the technology. About a quarter of the 1,300 employees at Dyson's headquarters work in research and development.
Hoover, however, points out that Dyson has a long way to go before dominating the U.S. market. Although Hoover acknowledges that Dyson captures the greatest dollar share of uprights, the Maytag-owned (MYG ) brand, which features uprights from $60 to $389, still beats Dyson in unit sales and also leads in broader categories of cleaners. "Hoover does remain the market leader in the overall floor-care category in the U.S.," says Hoover spokeswoman Kelly Womer.
Dyson, however, wants to expand. Although his outfit now sells only upright cleaners in the U.S., it plans to introduce updated canister cleaners. Last month in Britain, Dyson unveiled "the Ball," a new vacuum that will eventually roll out in the U.S. Starting at the equivalent of $600, it replaces wheels with a ball to allow easier movement.
"We are getting better and better at collecting dust," says Dyson. One thing is for sure, his outfit is certainly cleaning up.
Carney is a correspondent for BusinessWeek Online in London
Edited by Phil Mintz