Crystal Ball Not Required

Gila Morgan
Retail stores that advertise their wares with adjectives like "hot," "exotic" and "naughty" usually are viewed as different from mainstream emporia. But when it comes to inventory management, adult retail outlets might as well be selling toasters or toggle bolts.

Adult business owners and managers have to answer the same questions as hardware store proprietors and boutique owners: What mix of merchandise will maximize sales? How do you arrange shelves, tables and racks so that shoppers will explore most of the store instead of one corner? How can you anticipate what customers want, so you can stock what's in demand and avoid loading a 50 percent off table with unsold inventory? Which computer programs can help you plan your purchasing?

For a store with a variety of adult products, the trick is to determine the best proportions of videos, novelties and lingerie and other wearables. Marcus Goswick, operations manager for the North Carolina-based Adam & Eve chain, told XBIZ that in the stores' efforts to capture more female shoppers, they've hit on a successful balance of 20-25 percent DVDs, 30 percent toys and novelties, and 40-50 percent lingerie.

At Babeland, which has stores in Seattle, Los Angeles and New York, and San Francisco-based Good Vibrations, the focus is on sex toys and other aids to romantic enhancement, with a strong educational element. Jonathan Plotzker, senior director of merchandising and operations for Good Vibrations, told XBIZ that the stores "always have a healthy-sized assortment of educational books and videos." Joyce Solano, Babeland's Oakland, Calif.- based purchasing director, said the chain gives about 75 percent of its space to toys and most of the rest to DVDs, though, she said, "we definitely try to maintain a good book department."

Said Plotzker, "The best mix is going to differ depending on the size of your store, the demographic of your customer base, and what your mission is."

Demographics A Key
Daryl Jenkins, owner of A View to Video, with two locations in Oxnard, Calif., also says demographics influence his choices of stock. The clientele at one store, located in a working-class neighborhood, favors films with Latina and Filipina actresses, and the store in an area with an affluent, predominantly white population base carries videos reflecting its demographic more closely, while interracial stories and Asian actresses appeal at both locations.

Adam & Eve is taking an architectural approach to encouraging flow-through in its stores, Goswick said, with a curvilinear design, movable walls and wooden walkways that "create a softer impression." The stores are putting lingerie, shoes and hosiery at the front of the store, with DVDs and toys, which Goswick said are more "discretionary," toward the back.

"We want customers to feel relaxed when they come into the store," he said. In his video stores, Jenkins sets up areas for popular genres, actors, ethnic groups and production companies and counts on traffic between such displays to get people around the store. When a certain film fits into more than one display, he'll stock the DVD in each display. "Put things where the guys are going," he told XBIZ.

Solano said Babeland doesn't have a set formula for displays but has been working on traffic flow, and she and other Babeland staffers have been reading "How to Buy," a recent book on shopping behavior.

"Our employees have a good eye," Solano said. "They're always moving things around. You always see something different every time you walk into the shop."

Good Vibrations, Plotzker said, also changes store features regularly and has staffers assigned to visual merchandising, including a full-time person in the home office.

"We recently added GV-branded 'category signage' along the perimeter of our stores," Plotzker said, "letting customers know where to go if they're interested in a particular area."

When it comes to what to stock and how much, Plotzker pointed to Good Vibrations' 29 years in business, during which the chain has kept track of sales data, customer requests and feedback and comments from sales associates.

"Our buyers can pretty much follow their guts when purchasing products," he added, "knowing what our customers will or won't be interested in."

Goswick said Adam & Eve takes some of its buying cues from the chain's catalog and Internet business, but staffers at the retail stores are a crucial source of information.

"We want our employees to be consultants — to talk to customers and find out what they want," he said. Goswick added that the chain doesn't "go too deep on any one product unless it's a fast mover or we see there's demand for it."

Jenkins, who has run his stores for 15 years, agrees that it's important to "learn your customer," adding that experimentation is key to discovering customer preferences. "You have to keep buying new product," he said, "and keep changing until you find out what they like."

He takes a conservative approach to purchasing, advising owners to "buy what you think you need at the beginning and re-buy what sells. You'll know after a day or two if you need to reorder."

Said Solano, "We try to pay attention to trends."

Solano uses high-end vibrators and compact, discreet sex toys as examples. Other considerations are price point, demographics, quality of materials and manufacture, and, of course, asking customers what they'd like to see in the store.

Inventory Ware
Computer software can be a powerful tool not only for keeping track of merchandise but for determining when and how much to order. Dave Piasecki, writing for the mainstream website, counsels business owners to establish that the software can do what they want it to do and be able to modify it to do any specialized tasks the off-the-shelf version doesn't.

It's also important, Piasecki said, to know exactly what information a program seeks and for that information to be accurate. Software can calculate the most cost-efficient order quantities of different items, for example, but not if you don't know what numbers to plug into the formula.

Goswick uses Intuit's Quickbooks Point of Sale, which he called "not the most robust inventory program but easy to use," and one that integrates with other Intuit programs. "It's really handy software for the newbie," he said.

Babeland, Solano said, just bought a multifunction package from Ecometry, which she said has powerful programs for inventory control and forecasting.

In short, by using econometric tools, sales history, customer feedback and common sense, retail personnel can predict what they need to have on hand.

"We make educated guesses," Solano said. "There's some science, and also some luck."