LOS ANGELES—The word on everyone’s lips and the thoughts in everyone’s mind is all about the current state of the world—the COVID pandemic. It is striking hard and deep, two words commonly used in the adult industry. With global stay-at-home orders in place, how is the buying public for pleasure products getting its needs met and how is the industry handling it?
The brick-and-mortar stores are most certainly impacted and many are dealing with the new normal. Online sellers are now facing demand that they once only dreamed about. Distributors are contemplating opening to supply the needs of both the declining orders from their brick-and-mortar stores while still providing product for the uptick in fulfillment to their now in-demand online sellers. And some manufacturers are scrambling to balance all of the segments of product fulfillment.
The COVID hiccup in the supply chain to ultimately get product into the hands of anxious and horny consumers has created different needs at every level.
For Zondre Watson, general manager of Honolulu’s Sensually Yours store in business since 1984, shopping in the brick-and-mortar store has been halted since March 23 but he has been allowing for customer pickup via their online ordering portal.
“We are running with a limited staff that wears masks," Watson said. "We have customers call when they get to the store and we bring the orders out to them, which decreases customer contact. We eliminated cash transactions to limit contact with paper money. For those out of the area, we reduced the free-shipping threshold to encourage people to choose to have their items received at home.”
But being forced to pivot for the pandemic “has drastically impacted our sales," Watson said.
"Prior to the shutdown, we redesigned our website and created an omni-channel experience so we were already prepared for people to shop online and pick up in store,” Watson continued. “But with the government shutting down all non-essential businesses, we had to push all of our sales online which drastically decreased our sales. Prior to the shutdown, online sales were growing but were between 1-2 percent of our sales then suddenly, we became dependent on just those sales. Luckily, we’ve increased our online sales eight-fold. However, it’s way below our previous sales level and our break-even point.”
Zondre Watson of Sensually Yours in Honolulu
In the middle of the country, Cherylynn Brunnemer, of Naughty Time Novelties in Clinton Township, Mich., shared similar experiences. Closed since March 15 by the governor’s executive order, the store at post time had planned to reopen on May 6, offering several new experiences to encourage shoppers to come into the store.
“We will offer curbside service and for added confidentiality, will be supported by a personal virtual presentation by appointment, prior to pick up," Brunnemer said. "In the store, we’ll also offer complementary masks, touchless hand sanitizer, touchless payment options, only allow six people in store, special hours of operation for the vulnerable, face barriers, and have all staff wearing masks. We’ll provide mandatory sanitizing after anyone touches an object and of course, practice social distancing of six feet between everyone.”
She added, “We’ll also be taking the temperature of employees coming onto their shifts.”
The Cambridge, Massachusetts-based Hubba Hubba, a kink-friendly store open since 1979, has faced a few unique challenges as well. MJ Pullins, the new owner since January 2019, brought a different skillset to adult retail and an interesting insight to the COVID shutdowns.
“We closed the store to the public on March 17 though the state mandate started on March 24," Pullins said. "Having a background in science, I couldn’t risk infection to the public and sales had dropped so significantly that it was not worth the risk.”
She continued to share her scientific observation, “Do not take this virus lightly! Clean often, especially your register! I am not in a place where I can do curbside pick-up because of the store being below street level, but I encourage others to utilize this. Be a reference—offer to answer questions and make recommendations. Offering additional services that Amazon cannot is going to be the key to our survival.”
Kris and Fresca Black, operations managers for the four Southern California-based Secret Desires and Love Stuff stores, closed the establishments when the statewide moratorium went into effect on March 19. The stores came back online with an affiliate site associated with a single distributor who had shut down for weeks because of COVID and recently began fulfilling online orders for their customers.
Aside from brick-and-mortar businesses defaulting to their online stores, sales at these storefront businesses is spotty, at best. Choosing to offer curbside delivery or closing altogether leaves only a few difficult options to remain in business. Naughty Time Novelties sales increased during the pandemic through their website, which is an affiliate of East Coast News.
“ECN has been wonderful with handling our increase in online sales,” Cherylynn Brunnemer said.
Since COVID, Hubba Hubba quickly pivoted by becoming an affiliate site of AdultShopping.com instead of struggling to redesign their own website. Making the shift that promptly resulted with money in the coffers to pay the never ending bills which are inevitable in retail.
Susan Miller, of the versatile retailer Orchid and Serpent store, who primarily travels around the country selling at kink and fetish events—including at The Lair at AVN’s AEE Show in Las Vegas—has always supported her business with her vast online presence, which the company handles itself.
“Our company's main platform for sales was conferences and trade shows,” Miller said. “Since COVID came to the US, all large gatherings ceased and our sales have changed dramatically. We've moved to more online sales and more social media posts. We've also started selling a lot more masks! We've always sold gas masks and facemasks and luckily, we were ahead of that curve. We have brought N95 masks into our inventory and we plan on selling those for a while at future events.”
She continued, “Social media has been our savior through this. As people sit at home and scroll, they are seeing our posts and contacting us. I am able to offer a lot more personalized service now and that has also helped.”
Many online only retailers have noted a surge in home shopping, with some comparing it to the annual Cyber Monday buying spree.
Carolyn Eagle, manager and co-owner of Canada-based online retailer Betty’s Toy Box and Naughty North, had to bring on new staff and increase the work hours of existing staff to keep up with sales.
“We eat, sleep and dream sex toys right now,” Eagle said. “Sales on both sites have increased by a shocking amount. We noticed at the beginning of March that things were not slowing down after the usual Valentine's bump and then they began climbing and haven't slowed down week to week. April will be a record month for both sites despite having several popular items out of stock due to closures with our wholesalers. We noticed the first big jump on both sites between the weeks of March 16 and March 23. For Canadians, that was when the stay-at-home orders started and the schools closed. Now we are seeing a steady climb consistently week over week. Some things that have been quite popular have now sold out but customers seem determined to buy and have been asking for suggestions on alternatives. Lots of folks seem to be trying toys for the first time as well, so we are giving a lot of advice on strokers and vibrators.”
Since Eagle’s business is a drop-shipping business, the two companies fully expected to lose most of their wholesalers to mandated closures and have their orders dwindle. Instead, some distributors have managed to stay open with limited staff and have been “total rock stars," Eagle said.
"Big shout out to Holiday Products and Entrenue in the U.S. and JAL and Ultra Love in Canada. We couldn't have survived this without them," she added.
Ann Houlihan is the CEO of CNV.com, Inc., which is the parent company of SexToy.com, the affiliate hosting site, AdultShopping.com, and wholesale site, SexToyClub.com and in the online biz since 1995. Houlihan noticed a ramping up in orders by the second week of the COVID closures.
“By the time of the stimulus check delivery, sales were significantly higher than the previous year-over-year timeframe," Houlihan said, adding that overall "we’ve had a 20-percent uptick in new sign-ups for both AdultShopping.com and SexToyClub.com. I attribute that to various news articles about how sex-toy sales have increased during COVID and people are seeing this as a revenue stream since their normal jobs are either not available, slowed down or not existent.”
Since CNV works strictly with drop-shipping distributors, some of which were closed for several weeks, Houlihan disclosed, “not having access to extensive inventory online has been somewhat problematic. In normal times, having multiple distributors lends itself to maintaining inventory for our online orders and keeps shipping costs to a minimum. With COVID-19 closures, we were able to push all of the traffic to the distributors who were open. As they come back online, we will show more inventory and have more options for shipping.”
While many brick-and-mortar stores have defaulted to their websites in order to keep the cash flow going and employees paid, CNV’s Houlihan’s thoughts for online sellers are “the main thing to remember is whether you’re selling sex toys or clothing, you’re still dealing with items from manufacturers, warehouses, distribution centers—and I think the misnomer is about our industry is that we’re drastically different than other supply chains. While our industry may be fun and necessary, a supply chain is a supply chain in the long run. When it’s fired up, it’s the money train and we all have a part in it. In return, we get to funnel some of the money to our business.”
The supply chain is functioning with distributors doing their part to keep online orders flowing despite most brick-and-mortar retailers being closed.
Joe Casella, the CEO and owner of Phoenix-based boutique distributor Entrenue (and a 2020 inductee into the AVN Hall of Fame), has remained open throughout the closures, keeping their fully employed staff on their jobs while maintaining social distance in their 25,000 square-foot warehouse.
Casella noticed shifts happening in his company early in the crisis. Now “revenue just really looks different with brick-and-mortar stores not open," Casella said.
"For obvious reasons, our internet retailers are doing well and we are holding our own with our online customers right now," he added. "We are currently expanding our drop-ship department to support this increased demand while keeping employees as safe as possible.”
Distributors are well aware of slowdowns occurring in their buying schedule, including Chinese New Year in late January, which this year coincided with the onset of COVID.
“Some of our key suppliers were very proactive and advised us to bulk up on those SKUs that could be affected," Casella explained. "We ordered accordingly in late February and early March, when COVID was becoming more of an issue and, in fact, only one key supplier of ours has really been impacted.”
Joe Casella, CEO of Entrenue
San Fernando, California-based distributor Honey’s Place, in business for 26 years and helmed by Bonnie Feingold, had a slightly different take on the impact of COVID on her company.
“Since the date that our governor in California closed retail in the state (March 16), sales have been slower," Feingold said. "Also, many other stores throughout the country were required to close. However, we have seen a large increase in online sales but that does not make up for the loss of the brick-and-mortar store revenue.
"This week, as stores have started to re-open, we are seeing the brick-and-mortar sales increase but the sales are still not at the level they were before the crisis. Some stores are still required to stay closed, some can only open for curbside and others are fully open.”
Feingold's experience in the pleasure product industry prepared her for possible hiccups from manufacturers. “Our fill rate has mostly not been impacted," she said. "When everything started occurring in China, I decided to stock up because I knew that this crisis might cause supply chain issues. We brought in six months of our bestsellers, and four or two months on everything else depending on the sell-through of each item. Overall, we are in great shape and are able to supply our customers with what they need.”
Her optimism also reflected the reality of the current condition. “Don't get me wrong, there are some exceptions to this," Feingold added. "There have been some manufacturer back-orders due to the shutdown of China. A few popular items sold out quickly and in some cases, others are still not available.”
When it comes to keeping employees safe during COVID, Feingold has kept all office staff working at home; they only come into the office on an as-needed basis. The only employees in on a daily basis are the warehouse staff. Since the warehouse is sectionalized, there are not more than three to five people ever in one area and all workers in the warehouse must stay in their areas of work while wearing gloves and masks at all times and staying 6 feet apart. Everything is sanitized throughout the day and hand sanitizer is being used generously. While customer shopping has been allowed in the warehouse in the past, the post-COVID change is they can pick up orders while staying in their cars and no one that doesn’t work for the company is permitted to enter the building.
Entrenue has been accommodating self-imposed business restrictions by having some staff work from home, while one person in sales is in the building each day. All staff is rotating during the week, which Casella feels is more operational, and hands on. He elaborated, “We’ve cooperatively made decisions to maintain CDC rules outside of the warehouse and office to keep everyone here healthy. I’m still here every single day to support my staff and be there for them.”
Of course, the end result of the supply chain is a happy retail buyer. That begins at the opposite end with the manufacturer. It’s no secret that an overwhelming majority of adult products are manufactured in China, even though “manufacturers” are spread around the globe.
From even the smallest manufacturers such as Shellie Yarnell’s Crystal Delights, based in Washington state, to mid-sized manufacturers such as Brian Pelham’s Kheper Games, and to larger ones such as New York’s Blush Novelties with Nancy Cosimini as Sales Manager; and reaching across the pond to JeJoue’s Dan Jackson, who is head of sales for the company, the impact of COVID is indeed global.
Going from four to two employees, Crystal Delights’ Shellie Yarnell noticed several changes that have had a slight impact on the company.
“We first noticed this during January and since then, shipping from China has been slow and shipping costs more than doubled,” Yarnell stated. “However, we have increased sales on our website over the last month while wholesale sales are down over the last two months, almost certainly due to the massive shutdown of retail stores. We have seen an increase in sales of our newly launched Brought to You by Crystal Delights line of Sparkle Plugs. I'm sure partly because of the very reasonable price point and, of course, because they sparkle!”
Shellie Yarnell of Crystal Delights in Washington
Brian Pelham of Kheper Games had 13 staff members and plans on bringing everyone back, which he says will likely be a gradual process. His post-COVID sales are down 40 percent compared to last year’s sales and noted that his company is now promoting games that can be played via Zoom and video chat. “So we've seen an increase of those, such as Extreme Personal Questions and What the F*ck? Games,” Pelham noted.
All of the manufacturers agreed that the supply chain originating in China has not had a tremendous impact on the manufacturers. The manufacturers frequently prepare for their annual buying schedule ahead of Chinese New Year. Kheper Games’ Pelham admitted, “We always load up before CNY, so we only have 2 of our 200-plus SKUs seeing a back-order issue now.”
Brian Pelham of Kheper Games
In England, Je Joue’s Dan Jackson said, “In the first couple of weeks of COVID confusion (last couple of weeks of March), distributors and retailers seemed to err on the side of caution when it came to ordering. Routine large orders from some distributors were made noticeably smaller, which seems to have been a sensible business move with many decisions on social distancing and closures not having been made yet. As April came around, many of the brick-and-mortar stores closed, as well as distributors, which immediately decreased sales.”
Jackson continued, “Our online retailers’ sales are up including LoveHoney, Amorelie, and others, as well as our direct sales. April has been our largest sales month on our website, which should finish up with a 15-20 percent increase from February/Valentine's Day sales!” However, Jackson expressed, “Despite some increases, it still hasn’t made up for the losses suffered as a result of the physical stores being closed. We hope that the retailers with a physical presence will survive through this period as they’re such an important part of our industry and business.”
Nancy Cosimini, sales manager for Blush Novelties, remarked, “Sales are great! The only inhibitor we have had is related to our efforts to ensure the wellness of our team as caring for our staff has been our priority. Of course, the actions that many distributors have had to take in order to care for their teams has had an impact on sales as well.”
Being prepared for post Chinese New Year’s as well as COVID have been key factors for the company weathering the storm. “Our growth before COVID has been extraordinary, and we added to inventory to accommodate it," Cosimini said. "No one knew how important that inventory investment would be! We are well stocked and have been able to maintain a solid fill rate through this and have been thrilled to be able to help customers keep their businesses going!” She also noted that everything in the Blush catalog is moving—from strokers and dildos to luxury vibes and wellness items.
Every facet of the adult toy industry has learned to cope and pivot with the sudden on-set of such a substantial business shift.
For brick-and-mortar companies that rely on foot traffic for sales, the government’s small business loans available may provide some relief but the application process is tricky. A major stumbling block for applying is the prejudicial designation of adult businesses falling under the category of “prurient interest,” a term generally akin to the impossible to accurately define description of “obscene.”
Sensually Yours’ Zondre Watson mentioned he had applied for the loans and chose to ignore the designation of adult businesses. “And we did get approved and got the loan," Watson said. "The way I looked at it was the only specific businesses they outlined in the application were dance clubs and honestly, we don’t consider ourselves a 'prurient interest' business. We are focused on sexual health and are a non-judgmental business that is all about expressing yourself sexually. That’s not prurient.”
However, Cherylynn Brunnemer of Michigan’s Naughty Time Novelties applied for the PPP loan but was denied by the SBA in Michigan due to selling more than 5 percent of adult products.
Hubba Hubba, which has always been known as the purveyor of kink apparel and adornments, also applied for the small business loans.
Owner MJ shared, “I am still waiting to hear regarding federal loans. The store is over 50-percent clothing and accessories so my bank and tax forms can legally list me as a clothing or 'other' retailer. We will see how the government defines this.”
Sadly, another impact of brick-and-mortar closures has been the awareness that thieves know stores are not being attended to on a daily basis.
Kris Black said that Secret Desires’ Torrance, California location, was broken into during their closure, resulting in a loss of tens of thousands of dollars in merchandise and store support hardware.
“The robbers came in, dismantled and stole the cameras, which weren’t being monitored since the store was closed, stole the computer register, countless merchandise and even broke into our safe. It was devastating," Black said with a sigh. “My advice is to continue to monitor your business and check up with it regularly. Make sure you keep a watchful eye on it, even when it’s closed.”
Kris & Fresca Black, operations managers of Secret Desires and Love Stuff stores
Ann Houlihan, of online seller CNV, had a tip for adult website companies to get through this and stand out in the crowd: “Keep it simple. Don’t try to be the coolest kid on the block. Have a site that is reliable, easy to use, and secure.”
When asked how companies can cope with this ongoing crisis, Entrenue’s CEO Joe Casella suggested, “My best advice for brick-and-mortar businesses during this time is to embrace this time to do those projects and create a new standard in your store. Things like creating space for safe shopping and what that looks like. This quiet time is the time to redo or create your operations manual and your HR manual.”
He continued, “In other words, improve your business when you’re not swamped with your business.”
On a personal note, Casella found his hours at Entrenue increased to the same level as they were when he took over the company 14 years ago. Since COVID, he has worked in the warehouse doing fulfillment and for the first time realized the company had to change their shipping area of the warehouse. The restructuring resulted in a more productive workspace for order fulfillment. His advice is: "It’s doing little things that will get you through and make your company even more successful. I want everyone to get through this healthy and successfully.”
Bonnie Feingold of Honey’s Place concluded, “We are all in this together and staying safe is the most important thing. As we all get back to work, we will all need to make modifications to the way we work.”
She continued, “For brick-and-mortar stores, create an environment where people feel both safe and comfortable while shopping in your store. Perhaps limit the amount of customers allowed to shop at one time based on the square footage of the store. Play around with the floor layout to make sure the aisles are more open and the store has more of an ‘open space’ concept.”
During COVID, other suggestions she has are implementing curbside pick-up, plexiglass barriers at cashier stations and having sanitizer throughout the store or extra masks on hand for customers who may want to wear them while shopping.
To add a current spark to a retail staff’s company branded t-shirts, Feingold suggested a whimsical and timely idea, “Why not also brand the employees' masks with the company’s logos? Also, be creative, use resources like Zoom to have Zoom nights or training for your customers.”
Regarding online companies, she suggested offering a wide variety of items with fast turnaround times and using a drop-shipper such as Honey’s Place helps to streamline the shipping process and allows websites to offer a wider variety of items.
Cyrstal Delights' Shellie Yarnell offered this advice to both online and storefront retail stores: “Make sure you have a robust web presence as it is only going to become more important. Specialize, be unique! At Crystal Delights, we have put an emphasis on drop-shipping to our wholesale customers, allowing them to get product to their customers promptly and efficiently. Other suggestions I would recommend would be to take advantage of the social media marketing because it's excellent for getting new eyes to your website, and contests! Everyone loves to win something and a contest can bring you good traffic.”
Je Joue’s Dan Jackson suggested for both brick-and-mortar as well as online retailers, “Get creative! So many retailers have done great jobs to work within their means to try and drive sales and get through this period. We’ve seen online parties, amazing educational content, curb side drop-offs, etc. People are hustling to get through and survive which is inspiring to see. As a manufacturer, he continued , “We’re trying to create meaningful content which adds value to our customers lives—focusing on education. This has been one of the drivers to increase our web sales.”
Blush Novelties’ Nancy Cosimini shared her advice for brick-and-mortar stores: “We want retailers to know they are not alone as we all seek to navigate these unprecedented times. Even before COVID came to be, building the customer relationship and creating a unique, fun store experience has been a priority for retailers. Kind customer service and curb side delivery service will only strengthen trust levels with customers, as will cash register barriers, availability of hand sanitizers, and all the little things we do today to let people know we care about them. I have seen many stores preparing for the new social distance shopping experience. Great job!”
Cosimini continued, “There’s social media, having a shoppable website, and customer communication is going to be important. Blush Novelties is ready, willing and able to help retailers get creative and support them.”
History tells us that we’ll get through this. The species will not be wiped out by this deadly and invasive infection and the numbers are still in favor for survivors of COVID, at the human level, and at the brick-and-mortar, online, distributor and manufacturing levels. It’s people that run our precious adult business and allowing the public to experience life-affirming sexual pleasure that is our best contribution to the health of the world.
