In last month’s column, I was opining about costly sex toy or lingerie “industry reports” and my subsequent doubts about their value to the average erotic retailer. And for the record my trepidation still stands until I’m offered the opportunity to see one of these reports — in full — for myself. I’ll keep you posted, but don’t hold your breath on this!
But don’t think for one minute that gives you carte blanche to bury your head in the sand and ignore what’s going on around you. You don’t get off that easily! Not when your business is potentially at stake.
Estimations, data, and your own streetwise smarts regarding your local market size and likely target buyers are arguably much more important to your erotic business than those pricey ‘industry reports’ punted around online.
Sadly, there appears to be little consideration — even from within our industry — as to what’s going on in the wider world, particularly from a business or economic perspective. Sure, enjoyment, orgasms and all sorts of ooh la la are way more fun and comforting subjects to ponder than looking outside to the considerable political, social, or economic uncertainties swirling around us all.
Before proceeding, I’m making a disclaimer though. While some of the following is going to make me sound like a “Debbie Downer,” I want to see erotic boutiques and stores not just survive but thrive. But that partly comes from knowing what you’re up against vis-à-vis wider social and economic factors and being able to adapt accordingly then playing to your strengths.
Let’s consider a typical city-based erotic boutique or adult store that’s wondering who their target market is, the size of it, and what owners need to be aware of.
Rather like an inverted pyramid that begins with the widest base and narrows down, begin with any adult aged 18 or older within a defined radius (city limits, or up to half an hour’s drive away, you decide) who could be a potential customer. Look up your own local council or authority population data for a suitable starting point. Eliminate those who are sexually inactive and those who are sexually active but who may choose not to purchase adult products due to low income. Find some national statistics or recent — and reliable — commissioned survey data that you can use as a rough guide and apply it accordingly.
Then from all of this one needs to consider the people who possess not only the desire to purchase products, but the willingness and ability to pay for them. And right now, stats relating to low-income employees, the unemployed and the homeless make for grim reading.
When I talked to a sales assistant in an upscale London erotic boutique recently, she told me that among her customers were people who had perhaps saved for a year to buy something, as well as more affluent customers who would think nothing of buying things on a much more regular basis. While every person who enters your establishment should be warmly welcomed, guess which target group is the more attractive — and important — to the company? Yep, Mr. and Mrs. Affluent.
Obviously discretionary income is key. A properly functioning economy relies on a burgeoning middle class with equally healthy levels of consumer spending. That’s one reason why interest rates have been kept so low these past few years, to encourage spending rather than saving. But the middle class is being hit like never before. According to Alissa Quart, author of “Squeezed,” “Middle-class life is now 30 percent more expensive than it was 20 years ago.” Furthermore, she cites the findings of a Pew research study: “Before the 2008 crash, only one-quarter of Americans viewed themselves as lower class or lower-middle class. No longer. After the recession of 2008 ... a full 40 percent of Americans viewed themselves as being at the bottom of the pyramid.”
That’s alarming reading in anyone’s book. And there’s more.
According to the United Way ALICE Project, of the 15 or so U.S. states included in the study, at least 31 percent (and in some cases up to 43 percent) of households don’t earn enough money each month to afford a budget that includes housing, food, healthcare, childcare, transportation and cell phone. Furthermore, another stat revealed that two-thirds of U.S. jobs pay less than $20 per hour.
Another factor to be aware of is location. Is your business located in the hustle and bustle of the city center or is it in a more suburban location? In the U.S., a Pew research report from May 2018 contends that since 2000, suburban poverty levels have been rising faster than urban or rural counties. Scott Allard, Professor of Social Policy at Washington University writes:
“The suburbanization of poverty is one of the most important demographic trends of the last 50 years. Poverty rates across the suburban landscape have increased by 50 percent since 1990. The number of suburban residents living in high poverty areas has almost tripled in that time.”
So where are the “very affluent” living? Increasingly, in the U.S. at least, they’re in upscale neighborhoods along the east and west coasts, so if you’re located in or around there, then make sure your marketing A-game is firing on all cylinders to reap the benefits.
But while there’s been a move by many from the coasts to further inland to escape the property price and living cost madness, there’s also the people who are determined to remain in their desirable areas while underneath they’re feeling the pain: asset rich, cash-poor households. Colloquially this has been known as “spam alley.” In Scotland there’s another saying; that someone is “…all fur coat and nae knickers.” They probably won’t be splurging out on erotic goodies unless it’s at the expense of bigger ticket items or holidays. All may depend on how important it is for such households to keep up appearances with their neighbors.
In the U.K., some parallels can be found in London. With its renowned latex and erotic lingerie designers, fetish clubs, upscale erotic boutiques and the like, the metropolis has now unfortunately become a city of extremes: home to either the very young or the very well off. In recent years it has seen an exodus of early 30-somethings in search of more affordable places to live, double the number doing so in 2009. These are people moving up in their careers and who should be able to afford more naughty purchases. In more favorable circumstances they’d probably be getting up to all sorts of sexy shenanigans in the capital. Instead they’re heading away from the city due to an absurdly expensive property market and cost of living.
The Resolution Foundation think tank highlights the fact that London’s economy is increasingly dominated by low-income jobs. This and the fact there’s been little to no real wage growth for a decade or so doesn’t help. Having spent the majority of monthly earnings on rent or transport to work each day, such people in these relatively low paid occupations are not going to be sauntering into erotic stores with the same frequency — and subsequent spend - as higher earning workers possessing more discretionary income.
After spouting all these grim — if unfortunately true — factoids however, it would be remiss to not offer some hope. If you’re an erotic entrepreneur your mind may very well have spotted a possible opportunity. Where are these big city leavers heading to? Some desk research will identify the likely spots. Perhaps it’s a rather boring, mid-sized commuter town: maybe further afield. Get curious. Those previously stressed, cash poor city dwellers have now got noticeably more spare cash to spend. Are there opportunities for new erotic stores in these areas? That’s where you potentially come in to save the day and inject some smiles and sauciness into the lives of the new arrivals and the locals.
From all these rather sobering statistics and trends, it’s hard not to contend that the only people likely to be buying anything reasonably priced (or more) for their sex lives — and on a regular basis — are those leading contented, relatively stress-free lives who have the financial means to afford it. They’re not facing bankruptcy (but the numbers are rising), and their credit cards haven’t yet been declined (yep, personal debt levels are eye-watering too: quelle surprise).
As an aside, some of your customers may be buying erotic lingerie and sex toys as a distraction from doom and gloom. Or they’re buying now and worrying about the consequences later. Or perhaps — and it’s about time for some positivity if you’re U.S.-based – they’re feeling more confident about the economy and much vaunted tax cuts. Whatever the rationale, you’re not their parents, and you’re not responsible for the state of the economy or other important local social issues any more than I am. Welcome anyone and everyone who comes in with open arms as usual. If they’re set on buying something, it’s better their money is spent in your store to hopefully aid in putting a smile on their face (and thus fill your coffers) than spending it elsewhere. You can offer excellent advice and help them make wise purchase decisions, which offer the greatest value to them.
Given all the factors I’ve highlighted, the obvious question to be considered is to what extent they are prevalent within your own customer radius. Get digging for the statistics; keep your eyes open and ears to the ground. Whether you’re skimming through your local newspaper or even just out for a walk and see a new building site, get nosy. It’s your job to find out what’s going on and assess the impact on your business before identifying how you can capitalize on it. Have any new companies arrived into your area? Are they recruiting locally or are there a whole bunch of relocating employees moving in? What’s the split between mid and senior-level positions, and those at lower level?
Taking all of this into consideration, while you may not be able to arrive at concrete numbers regarding your potential market size, your inverted pyramid that I referred to at the beginning will have narrowed down (unless you’re located in the swankiest of locales). At the very least, you’ll be much more aware of the sociological and economic factors present in your marketing macro-environment. Estimations, data, and your own streetwise smarts regarding your local market size and likely target buyers are arguably much more important to your erotic business than those pricey “industry reports” punted around online.
