opinion

Profits During The Holidays

Rodger Jacobs
"What's the North Pole like?" a little boy asks in the dark comedy "Bad Santa."

Billy Bob Thornton's bitter department store Santa replies that the North Pole is like a suburb.

"Which suburb?" the child persists.

"I don't fucking know," Thornton snarls, "Apache Junction?"

For retailers of adult products, both online and offline, mining for profits during the gift-giving holiday seasons doesn't have to be as difficult as a trek to Apache Junction, Ariz., home of the fabled Superstition Mountains and the legendary Lost Dutchman's gold mine.

According to an informal survey conducted by XBiz, companies that are marketing to a sector that includes women, couples and the gay community usually see a significant up-tick in sales during the holidays. But that doesn't mean the more "hardcore" crowd will find only lumps of coal in their stockings.

"Peace, happiness, health and consumer electronics are on the wish list of Americans this holiday season, according to our survey," said Sean Wargo, director of industry analysis for The Consumer Electronics Association.

Despite concerns about the overall economy, the CEA reports, consumers intend to purchase, as well as hope to receive, a plethora of consumer electronics gifts this year. And that's where companies like The Content Store, which licenses adult DVD titles to webmasters, experience a surge in sales.

"During Christmas, I always see sales increase," said Jonathan Silverstein, CEO of The Content Store. "People receive new computers during the holiday. Couple that with people who are alone and lonely during the holiday, and there's an increase in spending on adult content online."

Dr. Carol Queen, staff sexologist and board president of San Francisco-based Good Vibrations, concurs with Silverstein.

"Holiday time is either family intensive or lonely for many people," Queen said. The desire for erotic companionship, human contact or even just entertainment, she believes, can drive sales during the holidays.

Scott Trimble, affiliate manager for the herbal affiliate program MensNiche.com, sees a sales surge shortly after the holidays.

"The penis-enlargement industry generally sees a downturn in sales from Thanksgiving to Christmas," he said. Whether it's Christmas money, new computers or New Year's resolutions, Trimble said, MensNiche experiences a huge sales spike in January.

"I would hope for the sake of self-esteems everywhere that penis-enlargement products don't get given as gifts," he said with a laugh.

Queen and Silverstein also report that sales between Christmas and New Year's Eve continue to surge as consumers make purchases with holiday money and gift certificates.

"All of Good Vibrations' channels — retail, online and catalog — experience a substantial spike in sales during the holidays," said Nancy Crowe, director of marketing for Good Vibrations. "Every one of our categories bump up, but our two top category sellers are toys and gift kits."

Another big holiday spike for Good Vibrations is Valentine's Day.

"We've historically had a lull from tax time through the end of summer, with a big bump around Gay Pride Day — especially in our offline stores — because people come to San Francisco from all over for that event," Queen said.

Farrell Timlake and Spike Goldberg of amateur powerhouse Homegrown Video also report a sales spike during Valentine's Day.

"I attribute that to the fact that we have a higher percentage of female viewers than typical video-on-demand sites," Timlake said.

Fewer Online Members
But the Christmas gift-giving season does not have a positive impact on sales for Homegrown's online content. From the end of November through Christmas, Homegrown experiences a slight decrease in new online memberships.

"It tracks with consumer spending," Goldberg explained. "Our site memberships are around $40. We sell our VOD like a cable TV service, and people are spending that kind of money elsewhere during the holidays."

Despite the minimal holiday downward trend, Timlake said that Homegrown's numbers never really jump up or down in a significant manner.

"Our numbers are pretty consistent," he said. "There's never a slump like some experience and never one month where I can plan on buying a Ferrari instead of a Yugo."

Industry-wide, Goldberg said, everyone selling adult toys and novelties reports an increase in sales during the holidays.

"The busiest time of year for our online adult store is from Thanksgiving through Valentine's," said Dave Levine, CEO of SexToy.com. "Most of our traffic comes from affiliates, and many affiliates increase advertising during those periods, and often those ad deals go past the actual holiday."

Levine reminds affiliates in October that the holidays are just around the corner.

"The sooner they get started thinking about it, the better," he said. Levine spoke with one affiliate who focuses on pay-per-click ads who was making sales plans for the holidays during the summer.

"In all countries in which we distribute our products, the last quarter of the year is the biggest sales period for adult novelties," said Staci J. Bryan, sales and marketing manager for Big Teaze Toys. "It's followed only by the Valentine's season in early February."

Bryan believes the trend is true for both physical and online retailers.

While he doesn't dismiss the reality that some sectors experience increased sales during the holidays, Timlake believes that the name of the game should always be to constantly maintain a competitive edge.

"We market to everybody universally throughout the year," Timlake said. "We're in constant competition like everyone else."

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