Consumer Crossover: Adult Retail is on the Upswing

Bob Johnson

If any segment of adult has seen an upswing out of a down economy and hard-hit industry, the retail sector is the bright spot in 2012.

Lifted by continued mainstream acceptance of adult pleasure products and recently fueled in part by the “Fifty Shades of Grey” erotic novel phenomena, brick and mortar and online establishments alike are optimistic and enthusiastic about signs pointing to an improving and robust business.

The manufacturers are pushing their brands with much stronger advertising campaigns than ever before — including TV commercials and print ads in popular magazines. This general acceptance is arousing people’s curiosity. —Beth Brown, SexToyDistributing

It’s no secret that the pleasure products industry has been keeping retail above water, but the good news that’s making sales pros even more confident about their businesses is how adult is losing its stigma.

Retail giant Hustler, a mainstay in the market with its instantly recognizable Hustler Hollywood stores was one of the first retail establishments to appeal to mainstream consumers, albeit on more of a tourist curiosity level than a buying destination.

But that’s changed, and its success is part of the upswing in retail that business has changed for the positive, a trend vice president of retail operations Bobby Whitt attributes to pleasure products being a “gateway drug” for consumers that may start at the local CVS, but then moves buyers to adult brick and mortar establishments.

“I’ve heard that term [gateway drug] used. It will ultimately lead folks to us and I agree with that. Once they get a taste of vibrator and lube induced pleasure from the local drug store they’ll be in to see us. CVS runs out of options pretty quickly,” Whitt says.

But he cautions that the primary challenge is pricing awareness and competitiveness with the massive chains. “If people have seen Wet lube at Walmart, they’ll likely pick it up in your store, and unless you’re intentionally making it a loss leader, chances are your price will be higher. The danger therein is coming across to the customer as overpriced. Even though you may not be overpriced at all across the whole store, customers have a tendency to develop those opinions off the first couple of items they pick up.”

Good Vibrations President Joel Kaminsky agrees that the trend is toward smarter shoppers and adds that customers have also evolved by having much more information available to them with increased mainstream exposure to sex toys.

Kaminsky also points to the “Fifty Shades of Grey” frenzy as a perfect example of a number of products listed in a bestselling novel that have consumers flocking for items that may have been previously unknown to them. “Add to that exposure of mainstream ads for lubricants and intimate massagers … and suddenly people are being made more aware of available products … or at least thinking about them,” Kaminsky says.

But Peekay Inc. founder Phyllis Heppenstall feels that although consumers are more educated about price — they’re not as savvy about function and quality.

“In our retail stores for example — A Touch of Romance, Condom Revolution and Lovers — we continue to focus on our customers, their needs, their wants, their desires — even more than that — we ‘show them’ the experiences they didn’t even know existed. It has been stated ‘You can lead a horse to water, but you can’t make them drink.’ We just want to make them thirsty,” she quips.

Kaminsky also believes in “exploiting” the pleasure product “shopping experience,” that is, appeal to the “senses” and convert it to sales.

But while Whitt thinks consumers are drinking in all of the hype, he feels they’re transcending the sexiness of the buying experience and are more diligent in researching products before buying. Customers today are generally more knowledgeable about adult products than they were just two years ago in Whitt’s estimation.

Wholesaler Eldorado CEO Larry Garland agrees, and added that shoppers are even getting to know what materials are being used. “Are they phthalate-free? Is it medical grade silicone? They are also becoming more aware of quality and are more sophisticated in their tastes,” Garland notes.

Whitt also believes that as adult retail becomes more acceptable, companies like Hustler must add to the buying experience. “People walk into our stores many times for the same reasons they go to the liquor store, the gym, an amusement park, and so on; they’re in search of a good time, a form of release to take the edge off of life, to enhance it, or explore a more fulfilling way of living. We have to make sure to give it to them at all costs,” he says.

The Hustler executive notes another trend. He says that the company’s retail operation has also seen a fairly sizeable amount of customers becoming more socially conscious; seeking out “green” products, asking more questions about how and where products are made, whether they’re organic or even vegan-friendly.

And smart shoppers are not the only trend.

The Pleasure Chest’s Kristen Tribby recalls that when the company opened its doors in 1971 its customer base included mostly “gay men, kinky folks and the sexually adventurous.” Today, Tribby says, she sees all types of people in different stages of their sexual journey and notes that within the past decade, the Pleasure Chest has “seen more fluidity between sexual practices.”

More women and couples are frequenting the stores contributing to a welcomed spike in sales. “We have seen a more than 20 percent increase in our sales from 2011 to 2012. There are many contributing factors — a better economy, a rise in mainstream acceptance, and a general increase in sex-positivity. Ultimately, we are seeing that people are interested in maintaining a healthy sex life in all stages of their lives,” Tribby says.

Like Heppenstall, Tribby also believes in educating the consumer. She strongly advocates offering quality products and tailoring recommendations to customers’ needs. Many retailers are offering excessive discounts to try to capture a piece of the market, Tribby maintains, but notes that The Pleasure Chest avoids this race to the bottom and instead offers a “fun, education-based experience.”

“Of course we may lose a few sales along the way, but ultimately we will attract and retain quality brand loyalists,” she says.

Deluxe Distributors’ Ed Braunstein concurs with the idea that customers are more sophisticated and much more informed. This is a unique advantage for brick and mortar operations but comes with a price —salespeople must be better educated and polished in Braunstein’s estimation.

He also says that having the correct inventories and the ability to deliver on the spot is really the key.

But the positive changes in retail aren’t only found in traditional brick and mortar stores. The online experience, that not too long ago was pushing stores out of business, is in some ways now helping retail by offering another outlet to consumers.

And the savvy retailer has to now know how to leverage the Internet’s instant appeal.

Whitt says online shopping makes customers hesitate, explaining that the American consumer is so conditioned to assume nearly anything can be found at a lower price online, they will often opt not to buy it in a store but rather shop online.

“There is a split second of hesitation as they consider if they can find a better deal. If the in-store shopping experience and clear demonstration of the mind-blowing orgasm you can have tonight if you buy what we’re selling aren’t strong enough to overpower the urge to wait, we lose,” Whitt reveals.

Good Vibrations’ Kaminsky, who like Hustler caters to both the store and online worlds, says online shopping has evolved into both a good news and bad news situation. He maintains that the good news is consumers can get a plethora of information on the Internet and be much more informed before visiting a store — including getting personal or sensitive questions answered. And their interest may be piqued — another reason to visit a local store.

“The bad news is that a consumer may not be visiting an accredited site, thus getting errant information. And, online shoppers can shop price at the touch of a fingertip on a keyboard,” he says.

But Tribby leans more towards Kaminsky’s in-store experience as a positive way to keep customers. The Pleasure Chest has continued to experience growth in both its brick and mortar and online sales, but customers come to the stores for “an experience that you just can’t get online,” Tribby says.

And it’s not just the retail market that’s a barometer of trends. Wholesalers, who often start the ball rolling, also have insight as to how the market’s changed.

SexToyDistributing wholesale manager Beth Brown says online is increasing year by year and it has opened up an entirely new client base for SexToyDistributing as a wholesaler. Now, most brick and mortar sellers have coinciding websites. Even stores without sites use the web themselves on popular rating/ review/directory sites such as Yelp.com to further increase awareness and foot traffic. “As retailers grow, we’re here to fill their demand,” Brown says.

Wholesalers are also affected by the surge in the acceptance of sexual products.

Ari Suss, president of SexToyDistributing says he has seen “healthy growth this year due to the ‘mainstreaming’ of sex health products from the media coverage of ‘Fifty Shades of Grey,’ to the constant discussion of sex toys on daytime talk shows, such as ‘Dr. Oz’ and ‘The View.’”

Brown adds, “There has certainly been an increase in 2012 so far, and thankfully the boost in awareness and acceptance has also impacted our sales.

“Vibrators or discussions of sex products are popping up in books, TV shows, daytime talk shows and even mainstream film. Small vibrators can now be found in pharmacies and major retail chains, and with it, the manufacturers of these items are pushing their brands with much stronger advertising campaigns than ever before — including TV commercials and print ads in popular magazines. This general acceptance is arousing people’s curiosity,” she says.

“We see this as a very positive trend for the industry,” adds Garland. “The exposure to a broader customer base will build the market for adult products. In addition people who buy sex toys want knowledgeable sales clerks helping them, which our customers have and the big box retailer doesn’t.”

Most executives believe that taking advantage of the overarching mainstream trends will be paramount for sex product retailers. But Kaminsky has a more sobering viewpoint saying that the mainstreaming of sex products has provided more fodder for water cooler talk, and to a certain degree “normalized” goods that should have been regarded as such long ago.

“Hopefully, the more sex toys are mainstreamed, the less shame there will be around the topic of sex. Our sales have steadily grown over the past few years compared with same periods the previous year … but we attribute very little of that to mainstreamed goods,” Kaminsky says.

But Heppenstall has a different view. She says, “For all businesses termed ‘adult,’ it can and will continue to get better. Increased sales will continue for those that embrace this opportunity.”

And how are they doing it?

Some are competing in tried and true marketing methods including trade show demonstrations and seminars while others like Kaminsky include partnering with community non profits, staying environmentally friendly through its Ecorotic program, private labeling goods, loyalty programs, couponing, partnering with local businesses, and participating actively in local events such as the PRIDE gay event and film festivals.

The more progressive sellers will use social media, online advertising and SEO efforts.

But despite all of the trends, Whitt says the key to remaining competitive is to “truly know your customer base.”