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Adult Retail Meets Internet

Adult Retail Meets Internet

March 8, 2006
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" I see a lot of growth in brick-and-mortar. "

Over the last decade, adult retailers, like their mainstream counterparts, have experienced revolutionary changes in merchandising because of the Internet.

On the mainstream side, figures compiled during the holiday shopping season are a traditional indicator of consumer trends. For the months of November and December 2005, Nielsen Net Ratings, a marketing research firm, noted web purchases of $30 billion, with 33 percent of U.S. households making an online purchase, representing a 30 percent increase over the same period in 2004. (It is unknown whether Nielsen included adult retailers in their findings.)

Even with such stellar sales reports from the online sector, e-commerce still represents less than 7 percent of overall retail sales, indicating that online purchasing has become a part of the American shopping experience but has, by no means, displaced storefront retailers as the choice for where consumers spend their dollars.

Increasingly, adult product retailing also seems to be evolving into a more mainstream shopping experience for U.S. consumers. Before too long, upscale boutique-style adult retail outlets may find a market niche alongside recognizable brand-name retailers like Abercrombie & Fitch or Victoria's Secret.

And storefront adult merchandisers like Hustler Hollywood, Penthouse Boutiques and Good Vibrations are setting the trend by providing customers with a level of service and in-store ambience most shoppers find unavailable online.

Make it Personal
"We have a slogan," says Dan Quinn, owner/president of Horizon Media Group. "It's the MVC — 'Most Valuable Customer.'"

HMG is official licensee for Penthouse Boutiques, as well as parent company for In the Mood stores, a boutique-style adult merchandiser geared towards the women's market, and Erotic Zone stores, a traditional adult bookstore operation, all of which are located in Connecticut.

The staff at all of HMG's venues are highly trained.

"We've got to take care of our customers, so they're trained to give 110 percent customer service," says Quinn. "We do product demonstration and we also do in-house time for employees to sit down and actually have time with the product."

Jimmy Flynt, president of Hustler Entertainment, also emphasized customer service as a major enticement for over-the-counter sales at their Hustler Hollywood store locations.

"We understand that people come in, maybe it's a first-time shopper and they don't know what to really expect," Flynt says. "But once they get in there, we have staff that will show them around. We employ a lot more employees than any of our competition. In other words, we have a good size staff at any time during the day and that's what we're about: customer service."

Jonathan Plotzker, director of merchandising at Good Vibrations, a brick-and-mortar adult retailer in the Bay Area since 1977, says that well-informed, non-judgmental customer service helped to establish the company as a reputable industry brand name.

"Not only do customers deserve to be well-treated," says Plotzker. "We want our customers to come into our stores, or call us, or visit our website, and get the information they need in a supportive manner, finding the right product that fits their needs."

Penthouse Boutiques and Hustler Hollywood stores both offer customers a chance to preview DVDs and videos with special viewing kiosks, similar to audio CD-listening stations available at mainstream retailers like Barnes & Noble. The customer swipes a product's bar code at the kiosk and is allowed to view a scene from the video or a movie trailer. Such technology brings the best aspects of online shopping to the retail environment, thereby helping to level the playing field.

At Good Vibrations, incorporating mainstream sales techniques, such as complimentary gift-wrapping and sample giveaways, promotes customer goodwill and highlights the type of service customers simply can't get online.

By providing consumers with an opportunity for hands-on experience with merchandise and detailed product information, shoppers become educated and are more likely to be satisfied with their purchases, which can motivate them toward repeat sales. A low-pressure sales approach also encourages timid consumers who might otherwise end up ordering online.

Comfort and discretion are key factors in plotting the layout and product selection of upscale adult boutiques.

"When you come in the store," says Flynt, "we have a clean, well-lit boutique that is warm, inviting and people feel comfortable shopping in."

Use Feminine Touches
Describing the layout at the Penthouse Boutiques, Quinn explains, "If you walk in the front door, you see all the women's clothing, lingerie, shoes and everything that is very, very soft."

"As the store progresses past the dressing rooms, you get into areas with "how-to" books and DVDs. Then you get into the bachelorette area. As you continue, you start picking up pace into a little bit harder couple-oriented DVDs. Towards the rear of the store, you're getting into novelties and the full sex items."

"From the front to the back, all our racking and fixturing is matching," Quinn continues. "In most of our stores, we set up two revenue centers. In the rear of the store, where DVDs and other large items, dildos, vibrators, etcetera, can be purchased. You wouldn't have to go all the way up to the front of the store, though you could also purchase the same product if you were coming up front."

In addition to operating retail storefronts, Quinn's HMG is also a sole distributorship that offers a unique "plan-o-gram" service for wholesale clients that need help with merchandising formats and store layout.

"We're one of the few companies, maybe the only company in the industry that does do that," says Quinn. "We'll come out, plan out your store and your product selection."

With three locations in the Bay Area, Good Vibrations recently opened its first East Coast flagship store in Boston. Following the clean, well-lit formula for layout, Plotzker adds, "This was the first store completely built after our new branding identity was finalized, so that it's in our new colors, with proper colors and graphics in the window [signage] and throughout."

Brand Yourself
Both Flynt and Quinn agree that brand-naming is an important promotional tool for adult industry retailers.

"We have the number one name in the adult content business," explains Flynt. "Customers know that Hustler Hollywood speaks for itself and they know the merchandise we carry, which is everything from apparel to DVDs."

"Being a licensee of Penthouse," says Quinn, "it's such a strong brand. It really helps as far as bringing customers in the door, and it brings in such a great 35- plus crowd, male and female and couples."

Signing events and special in-store promotions are another aspect of brick-and-mortar retailing that cannot be duplicated online.

Good Vibrations features after-hours programs with visiting sex experts for lectures or classes, as well as "how-to" seminars covering a wide range of sexual preferences and diversity.

"We also occasionally have special events like community shopping nights, at our stores," explains Plotzker, "where members of certain local not-for-profit groups can take advantage of special shopping hours and a percentage of those sales goes to that charity."

At Hustler Hollywood, customers can attend signings with Hustler contract girls and other studio company entertainers, as well as take advantage of seasonal sales events.

"We actually did three television commercials this year," says Flynt. "One to appeal to Valentine's Day, one for the Freedom Sale [on Fourth of July] and one for Halloween."

Realistically, brick-and-mortar retailers both in the adult and mainstream markets recognize the necessity of a strong online presence, to enhance accessibility for existing clientele and allow expansion into broader markets. Both Hustler Hollywood and Penthouse Boutiques are aggressively improving and updating their websites, while Good Vibrations notes that having an extensive online catalog compliments their in-store operation, enabling them to carry more products than could be stocked on physical shelf space.

Interestingly enough, all three retailers plan continued expansion of storefronts in the near future. Both Good Vibrations and Penthouse Boutiques are actively scouting potential locations. Hustler Hollywood, which currently has 10 stores across the U.S., plans to open six more this year including locations in Seattle/Tacoma, Tempe, Ariz., and Miami.

Online or off, Quinn says, "I'll be honest with you. I think both are good, and I think there are two different kinds of customers."

"Online retailing is very strong," he adds. "But we're in a touchy-feely business. I see a lot of growth in brick-and-mortar."


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