trends

Adult Retail Market Leaders Examine Global Trends, Opportunities

Adult Retail Market Leaders Examine Global Trends, Opportunities

With pleasure product expos taking place all over world, it’s evident that the universal appeal of intimacy items is only growing. Whether based in the U.S. or abroad, sex toy manufacturers are constantly seeking to make their products hit that mark of being internationally known.

Pleasure product companies can’t do it alone of course. Distributors play a crucial role in serving as the liaison between them and retailers, and in providing the feedback that can lead to their success in unfamiliar territories.

The market is hot, especially outside of the five major adult product-consuming territories: the U.S., Canada, the U.K., Western Europe and Australia

“For us, distributors play a huge role in reaching unfamiliar markets as they are able to give us crucial information on customer trends and enable customers to see the products in the flesh,” Lovehoney’s Sabrina Earnshaw said. “You can have the greatest product but it will not sell if the retailers and end consumers cannot have a proper feel for it.”

LonBrook Managing Director Michael Bassett compared the manufacturer-distributor relationship to the military — distributors are the soldiers with their boots on the ground.

“A global territory is too large and too complex to tackle alone; thus, local partners are the key,” Bassett said. “It’s very hard to find the right one, and when you do — well, that can change also. People are basically the same all over the world. Some work harder, some less and with various degrees of motivation — just like your own staff in your own HQ office. Never a dull moment.”

He also offers manufacturers some advice: “Local partners are basically freelance operators, working on sales commission. If you view the relationship like this, you can adjust your expectations and behavior accordingly.”

On an even deeper level, to succeed in the international marketplace, consumers must be ready and willing to venture into sex toy exploration.

“The pleasure products industry has become very international and has grown over the years, we get inquiries from interest from customers all over the world,” Earnshaw said. “No doubt we can attribute much of this to the success of the ‘Fifty Shades of Grey’ franchise and the mainstream media attention it received. We call this ‘Fifty Shades Effect,’ meaning the impact the books and movies have had on the general consumer. Millions of people who would not have considered the pleasure products category have been won over. The impact on the wider industry — not just Lovehoney — has been phenomenal.”

What’s also helpful for gaining an international customer base — money.

“Money will afford you the budget to go big,” Bassett said. “Look at Satisfyer: big budget for global classical advertising in trade and consumer channels. Big budget to give free samples to every sales person and influencer on the globe. Big budget to provide free displays/testers, global trade show presence, continual new quality product development and production, and no-hassle warranty claims. Most of us cannot go big, but it is faster.”

Orion Wholesale key account manager Hauke Christiansen echoed the sentiment, noting that while money will get the product in front of the end consumer, manufacturers must deliver on quality in order to succeed.

“You can also lose a lot of money (on) branding if the products do not meet the expectations,” Christiansen said.

Another way that money affects the popularity of sex toys is in terms of pleasure product price points. According to Bassett, price points are declining globally.

“It’s simply a matter of economics and increasing globalization created by ease of travel and the Internet,” he said. “We can buy almost anything from anywhere now, and we can compare the pricing; the lowest usually wins.”

While the most affordable sex toys will always be in high demand, Bassett points out that not all shoppers are looking to pay the lowest prices.

“Individuals will always differ, according to their background and budget,” he said. “There are the low-dollars, not particularly demanding consumer, the mid-level client and the higher-end customer. These will always exist and always seek an appropriate item for themselves that they feel comfortable with within their current parameters. And that customer is also in flux. Ten years later, they may not be the young, low-budget, inexperienced toy user and be purchasing a higher-end item.

“So, there will always be consumers seeking different items at different price points, and each new generation flushes in while others fade. But there are country-specific differences. Australia still has quite a high disposable income level and high affinity to sex toy purchasing and usage. Germany and Austria rank high in fetish and BDSM consumption. Across the U.S., there are statewide differences in toy category consumption.”

In pointing out regions where sex toy sales are burgeoning, manufacturers list just about everywhere — from Czech Republic to India to Colombia, Russia, Australia and beyond.

“The market is hot, especially outside of the five major adult product-consuming territories: the U.S., Canada, the U.K., Western Europe and Australia. The demand is unfolding as influencers/bloggers are talking about them, more video content show them and there is more engagement and buzz on social media. I think it has grown in the last 12-24 months more than it did in the 10 years prior to that. Because the demand is coming from underserved countries, I think there is still a grand opportunity for each country/region to have its own Adam & Eve or Lovehoney as the dominating player.”

Vineshkumar Kunhiraman, the chief marketing officer of India-based online retailer ThatsPersonal.com, says India is a region that is evolving into a successful marketplace for pleasure products.

“We are working on a strong offline distribution model, which will hopefully, hit the Tier 1 cities by the first half of 2019,” Kunhiraman said. “As India is a growing market, we strive to bring the best from across the world. We selectively partner with brands who are passionate about quality and innovation of their products and believe in absolute customer satisfaction. As we have laboriously worked towards opening up the Indian market, promoting our brand and new categories — and building a robust retail network — we work on exclusive tie-ups with our brands. Exclusivity helps us manage prices, bring in quality products and obtain necessary government licenses and permission on behalf of the brand. Also, it helps us fight against counterfeit products and take necessary action against shady retailers.

“Currently, we are working with two international brands to create an Indian consumer-oriented product catalog that also abides with Indian legal laws. This becomes crucial where Indian laws forbid certain categories. By localizing them, we can successfully meet consumer demands and align with the laws.”

While ThatsPersonal.com is planning for expansion beyond India, Kunhiraman says that Bollywood has recently played a vital role in overcoming the taboo of sex toy use.

“In an otherwise coy society, Bollywood released a movie of the coming age on June 15 showcasing a female character using a vibrator for her sexual pleasure,” he said. “This was the first of its kind for an Indian film scene. This clip went viral across the Internet, and (after) that, we saw a sudden uptrend in search traffic and vibrator sales. Interestingly, it wasn’t a temporary growth. Emotional resonance led to openness in the market and a market-based increased hinting at long-term demand.”

To ensure that their sex toys (quite literally) speak to international shoppers, pleasure product manufacturers offer packaging and instruction manuals in multiple languages.

“In the Lovehoney Trade Team, we cover over seven languages — we can present and interact with customers in various languages which is crucial in a global industry. For example, I have lived in five countries and speak English, French and Spanish fluently. We are a very international team!

“We think that having translations on instructions are essential and the majority of our materials are translated into English, French, German or Spanish and can be downloaded from our website (LovehoneyTrade.com.)”

For simplicity’s sake, some manufacturers forego verbiage altogether and let imagery do the talking for them.

“We do provide translations on our product packaging, but we’ve found our use of pictograms to be an essential tool for conveying our product messaging no matter which language the customer is versed in,” said Pipedream Products Chief Design Officer Kristian Broms. ‘To make Pipedream Products into the well-established international brand it is today, we’ve found it essential to support our products with exceptional customer service and fill rates that exceed customer expectation.”

Popular trends in sex toys seem to be pretty consistent worldwide — high-tech toys are drawing new customers around the globe. According to Pipedream Products CEO Matthew Matsudaira, trending techy toys such as "luxury toys, men’s toys, toys for long-distance relationships, massage wands, and toys for anal play are trends that one must follow."

The increase of media attention and availability of online shareable content is providing the information and motivation that consumers need to make buying decisions. "Customers want richer intimate experiences with more meaning and a better education of how and why to incorporate pleasure products into their lifestyles,” Matsudaira said.

CalExotics director of marketing Nichole Grossman says that the iconic manufacturer’s products are available just about anywhere in the world, including the U.S., Europe, Russia, China and Spain.

“We pride ourselves on offering the best information possible to help consumers make their purchasing decisions,” she said. “Internationally, we do this by providing translations on every item we produce. We offer information in at least five languages, including English. We feel our branding and imagery help convey certain messaging, but in order to fully understand the product, we must provide some information in a language the consumer can understand.”

Consumers are becoming more progressive all other the world and sexual wellness is becoming a topic that many are entertaining.

“[People] are no longer repulsed by talking about sex, fantasies or their sexual choices,” Kunhiraman said. “They are prioritizing sexual health rather than just general health. Internet penetration has grown dramatically, giving unlimited access to adult content to over three quarters of the world’s adult population. Sex-related keywords became highest searched in India and across the world. With this massive transition in consumer trends, brands have now segmented and designed products based on consumer needs and demographics. Namely based on segments like need-oriented, men/women, couple, LGBT, first timer and advanced users, porn users, price-sensitive.”

While the demand for pleasure products and their sales may be growing, sex toy suppliers must face the challenge that each region presents in terms of importing and shipping from place to place.

“The challenges would vary from region to region,” said Raj Armani, the CEO and co-founder of ImBesharam.com. “The irony is that sales or demand has never been a challenge for us; importing them into the country and complying with the old-school import departments who interpret these laws has been.

“Secondly, the challenge is to subsidize the shipping costs so that no matter where they order from, we can offer a flat-fee rate, and have it shipped from a warehouse geographically closest to them.”

Sensuous co-founder and CEO Keith Jones recently issued a press release noting a years-long fight with a company that had knocked off its branding.

“There are, of course, always new challenges, whether it’s from competitors, IP protection, legislation, location and a host of other things that are part and parcel of marketing your product internationally,” he said.

“In the past, we have taken a shotgun approach and just gone everywhere. We now take a much more measured approach, focusing on particular regions and only offering our best-selling products. Currently, we are concentrating our efforts on the U.S. and Canada. We have been badly burned in China with IP fraud, but we are planning to revisit the territory in 2019.”

There are other challenges for lubricant manufacturers.

“For the lubricant and massage industry, there is an increasing maze of certification and registration protocols to navigate for many countries,” said Rebecca Pinette-Dorin, North American brand manager for Exsens. “Frankly, it’s a pain, but not necessarily a bad thing. Personally, I am quite happy to know that what people are putting on their skin and in their bodies is not going to hurt them, though sometimes, governmental oversight seems misguided or prohibitive rather than health-conscious.”

Pinette-Dorin offers her take on the essential qualities of an internationally successful brand.

“In order to establish an international brand, you need flexibility,” she said. “Quality and a strong brand base and message go a long way, but you need to be able to adapt that message to each market. No marketing campaign will work everywhere. People are different in different countries, and the brand that does not acknowledge that is asking for trouble.”

With the adult retail marketplace always changing, some pleasure product figureheads question whether it is actually growing.

“International markets, like most tangible goods markets today, are highly dynamic and in a state of flux,” Bassett said. “Today’s best customer can be gone tomorrow, and new customers suddenly appear. Competition is intense, as the market is saturated with product. Combine oversupply with online sales channels and price deflation, and loss of sales margin is the result.”

Bassett says he is seeing a restoration back to a sustainable balance.

“I have recently seen two large online retailers default,” he said. “One has closed, leaving a mountain of debt; the other is struggling to pay suppliers, and the product supply is being cut. These are two examples of non-sustainable business practices. Low-margin business can only succeed if they are mass market/volume operators. Adult businesses are not food and beverage/grocery vendors.

“Is the market growing in absolute terms, or is market share being gained and lost by competing suppliers? Definitely the latter is a constant,” Bassett says. “China is also continually growing, and Amazon and eBay allow a greater consumer reach worldwide. In this sense, sales are growing in absolute terms. Adult pleasure products do enjoy a greater status and are less taboo in society than previously, and yet, the challenges are becoming greater.”

ImBesharam.com was established as an online retailer with a focus on the market in India. This year, Armani says the company is looking to expand beyond India.

“The market is hot, especially outside of the five major adult product-consuming territories: the U.S., Canada, the U.K., Western Europe and Australia,” he said. “The demand is unfolding as influencers/bloggers are talking about them, more video content show them and there is more engagement and buzz on social media. I think it has grown in the last 12-24 months more than it did in the ten years prior to that. (Because) the demand is coming from underserved countries, I think there is still a grand opportunity for each country/region to have its own Adam & Eve or Lovehoney as the dominating player.”

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