This article by Allison Travers, Eldorado Trading’s marketing communications director, originally appeared in the adult distributor’s monthly newsletter.
Everyone knows that sex sells, but how much are we really raking in? According to the IBISWorld Industry Report for Adult Stores in the U.S., our industry is pulling in a whopping $9 billion a year in revenue, with an annual growth of 0.5 percent.
Less “Pearl Clutching,” More Toy Shopping
Over the past five years, growing social acceptance and the “mainstreaming” of sex toys in the media has boosted demand. The success of movies such as Fifty Shades of Grey and the emergence of sex paraphernalia in mainstream retailers like Walmart, Target and CVS has helped to reduce the stigma of shopping in adult stores. In addition, this cultural liberalization toward sex has empowered a growing number of women to shop for sex toys, to the point where women account for around 60 percent of all adult store industry sales.
Vibrators Get All the Buzzzzzz....
Even though this report covers stores that sell both retail sex paraphernalia as well as erotica (such as pornographic DVDs and magazines), the sale of sex toys accounts for nearly 80 percent of adult stores’ industry revenue. The largest sellers in 2016 were vibrators (19.2 percent of sales) followed by rubber penises (16 percent) and lubrication products (14 percent).
Vibrator sales have increased in the past few years mainly because of their availability in other retail outlets. The one product that is decreasing in sales is adult content movies and magazines. This is due to the availability of free pornographic content online.
The Good News and the Other News
Looking to the future, the adult store industry is projected to benefit from rising disposable income through the next five years. This additional income, in addition to the social acceptance of sex toys, will increase spending on adult sex paraphernalia and further boost industry sales.
The only deterrent to this growth is the rise of e-commerce sites that offer a wider variety of sex toys and can ship them conveniently and confidentially to a customer’s house. But in light of these online sales, there are many customers who prefer to see the products in person and will keep shopping at their local adult store.
What Does This Mean for You?
While things are looking pretty bright, adult toy e-commerce sites can definitely give you a run for the money. In fact, e-commerce sales are expected to increase by 10.6 percent annually over the next five years. That is impressive growth compared to the projected 0.5 percent growth for the brick and mortar adult stores. In order to compete with these websites, you’re going to need to take a look at expanding your customer service outreach. You need to give your clients a unique and personal experience they can’t get online.
- Really know your products and be able to answer questions about each one. When customers buy online, they may not know what they’re getting and end up having to return their purchase, disappointed. If they come to you, you can act as their personal shopper, steering them to the products that meet their unique needs and letting them know how to use and care for the product.
- Be a reliable and confidential health education resource for your customers. Not everyone wants to discuss STIs or “best sex positions” with their family physician. By staying educated on sex health, you can be a resource for your customers who really need someone to talk to about sensitive matters. Eldorado offers an e-learning program for our clients called Elevate U. This easy-to-use online educational program provides you with a certification in sex health education and will give you a competitive edge against your online competition.
- Make sure your selection is diverse and high quality. Customers may go online because of the wide selection available, or they may buy a vibrator at a drugstore because it’s cheap and convenient. So when your competition zigs, you should zag. Curate a selection of the best-selling and highest rated products and provide a diverse enough selection to appeal to every niche out there without cramming a lot of cheap products in.
So this is the state of our industry. Opportunity abounds but it helps to know where we are in this ever-changing landscape. Hopefully this will give you insight into how to grow and run your business more efficiently. And remember, your partners at Eldorado Trading Company are here to help you succeed as well.
IBISWorld is a leading publishers of business intelligence. This adult store industry report is available for purchase at IBISWorld.com/industry/adult-stores.html.
