According to a December estimate by emarketer.com (www.emarketer.com), an Internet marketing and news resource, online consumers spent a projected $18.6 billion in 1999; a later study by the Boston Consulting Group puts that figure at around $36 billion; some analysts say that the final tally will exceed $50 billion or more. Although Net-porn's percentage of the market has decreased, the total dollar intake of the adult Net industry has skyrocketed.
But as the number of adult retail sites on the Internet continues to grow, so too will the need for adult retailers to put forth extra effort in winning customers. This competition will force them to make a simple decision: Invest to create a site that consumers will come back to, or be left in the wake of those that do.
One product a lot of retailers are selling online is DVD. Over 5 million players have sold to North American consumers since the format's launch in 1997, with DVD software and hardware outselling their VHS counterparts in many stores during the 1998-99 winter-holiday shopping seasons.
Many adult manufacturers are profiting by selling their films and videos, old and new, on both VHS and DVD. But just having the product on hand to sell isn't enough. So how to get your piece of the DVD Net-retailing pie?
Getting Customers into Your E-Store
The first step that must be taken before retailers can start raking in the cash is, of course, raking in the customers. This can be done in many ways, including banner advertising, print advertising, listings on search engines, and the establishment of an affiliate program.
Web surfers who are looking to purchase adult products online often use one of the major search engines (such as Yahoo.com, the search engine of choice for porn surfers and many others, according to SexTracker) to find the site they will eventually buy from.
The perfect model for what adult retailers on the Web can achieve through an affiliate program is Internet retailing giant Amazon.com. Boasting the largest such program on the Web, over 350,000 sites, Amazon makes it easy for Web masters to cash in (the standard commission is 10%) whenever a customer makes a purchase through their site.
"Affiliates are very, very important. I think if anybody is going to put up an adult DVD site, or any adult retail site, they need to have the affiliates," says DiVaDee (www.divadee .com) director of operations and "Dreamweaver" Sean Holland. The DiVaDee site, which opened in May of 1999, signed up "tons" of affiliates during the holiday season, and according to Holland, "Roughly 30-35% of our business can come from affiliates."
As of this writing, Five Star DVD (www.fivestardvd.com) had been online for six weeks, yet already had exploited the potential of affiliates. "Our advertising mainly consists of banner ads on several Web sites, and some print advertising," says Five Star's Ken Graham. "But one of the things I'm very surprised with is, being that we've only been online for a short time and don't have that many affiliates, it's amazing how much activity these affiliates generate. Some days, as much as 75% of our business comes through affiliates. We didn't expect that at all."
Like many leading adult retail sites, DVD Empire (www.adultdvdempire.com) got its start directly on the Internet, and not from a mail-order or other retail business. The company, which was started in November 1997, has also profited greatly from its mainstream DVD site (www.dvdempire.com). "Because [DVD Empire] is one of the top five DVD retailers online, we're able to take that huge amount of traffic and easily funnel it into a quality, professional, classy adult site," explains owner Jeff Rix. "The main part of our marketing strategy lies in the mainstream site. Through there, we're not only able to pull in mainstream customers, but mainstream advertising opportunities as well."
Rix has successfully done what most adult businesses seldom consider worthwhile: Reaching out to mainstream customers. "A lot of mainstream customers are curious about how DVD technology is applied to adult movies. They want to see the multiple angle function used on their machine at home. Also, customers who come straight to the adult site see that they can order mainstream titles and have them shipped on the same order and think 'That's great!'"
The key theme behind DVD Empire's success is active marketing. "We have ten prime banner spots on the entire Internet. They're key locations that we got early because about two years ago we were one of the first adult online stores to start a real marketing campaign. Everyone else out there had their site and people would just come to them. We were the first ones to actively go out and try to reach people," boasts Rix.
Repeat Business
Offering a wide selection and competitive prices is a great opening act, but the way the Internet is swelling with new merchants, these things alone aren't enough to win over the buying public in large numbers anymore.
One of the country's top adult mail-order companies, Video Age (www.videoage.com), has a clear concept of what customers are looking for in an adult retail site. "The same marketing strategies that work for adult retailers in general also apply to online adult retailing: The newest titles at the cheapest prices, a good overall selection... But as far as the Internet goes, it's also important to provide excellent customer service and quick delivery, or you'll lose people," says Video Age owner Bill Hudlow.
Indeed, customer service and selection are the key themes in the way DVD Explorer (www.dvdexplorer.com) does business. "We carry DVDs from 46 studios and around 1,400 titles overall," says DVD Explorer's Erez Golomb. "After receiving customer feedback, we decided to start a toll-free customer service line that runs 24 hours-a-day."
Each week that passes brings more concerns about Internet security from current and potential consumers. As an "e-tailer," the investment in secure ordering technology for your Web site is not only relatively inexpensive, but essential. A secure ordering system utilizes one of several modes, such as Secure Socket Layer (SSL) and Secure Electronic Transaction (SET), to encrypt a customer's purchase information sent over the Net. Many people will not order from a non-secure site, so it's important for retailers to demonstrate that they take their business, and their customers' private information, seriously by offering secure transactions.
Just like brick-and-mortar retailers, online stores can also run promotions to help drive sales. "In-house promotions have been very successful for us," says DiVaDee's Holland. "We've held contests in conjunction with certain adult studios like Vivid to push their line. In Vivid's case, we had a Hawaiian vacation getaway that was extremely popular with customers."
DVD Exotic (www.dvdexotic.com) had, as of this writing, been on the Net for three months yet already has a clear concept of what promotions can do for sales. "We have something called 'Exotic Roulette,' where for every two DVD purchases, the customer can spin this roulette wheel and win another DVD," says Edo. "During the holiday season, we took things further and gave away a free DVD with every purchase."
And what not to do? Avoid short-term profit from selling customer lists to Web marketing groups; there's no surer way to lose a potential long-term customer than by selling their name and having their Inboxes crammed full of spam.
The rest is up to you.
