The end of a year is traditionally a good time for taking stock, and also for looking ahead at the things to come. Oscar Heijnen is doing exactly that in our end-of-the-year EAN interview. And he does so not just from the viewpoint of his company SHOTS – which is now also a force to be reckoned with in the USA – but also on a general level, talking about the changes in the market and the current and future challenges facing the adult industry.
Let’s take a look at the European market first: Are SHOTS BV happy with the way 2016 has gone in this territory? Oscar Heijnen: We are more than happy about how 2016 has turned out. It has been an incredibly busy year that began with the expansion of our headquarters in the Netherlands and several additions to our teams in Europe as well as in the USA. That aside, we have introduced a large number of new brands, and, at the same time, we have been able to gain a bigger market share for our existing brands. The innovations among our own products have certainly helped us climb a few rungs up the ladder.
Am I right in assuming that one can’t make great leaps anymore because the pie is more or less divided up?
That all depends on what you call a ‘great leap’. SHOTS is still rapidly growing in the European market but that’s not comparable to the growth spurt we have had in the USA. We aren´t finished in Europe yet because there is still a market share to be gained with new and innovative high-quality products.
We will continue our sales pace in 2017 as we have done in 2016 and preferably kick it up a notch or two. I must admit that it will get more difficult now that our company has grown this big, but that’s where the challenge lies for me and my team.
Does this create more interest in markets outside the traditional adult market?
We have already successfully penetrated (no pun) other non-adult markets. I think that is something we do well and it has certainly had a huge impact on the growth spurt of the past few years. I’m confident it will continue to help us in the future.
We will of course never forget our own market which is equally or even more important to us! There are some parts of the market where we would like to grow more. For instance, our lingerie department has room for improvement and we are already looking for ways to expand our market share. This will mainly concern designing our own products but also adding other brands to our distribution branch.
As far as your product range is concerned, SHOTS rely on a mix of third-party brands and private brands. Could you imagine changing or adjusting that concept?
No, absolutely not. I believe in big assortments! I think that we have one of the biggest in Europe at the moment, and we still don’t have all the available brands, which is our ultimate goal, of course. SHOTS wants to be your one-stop wholesaler with large stocks for very fast delivery possibilities.
Our forte is the constant re-adjustment of our business model and adapting to the demands of the market. At least that’s what we try to achieve. I’m not saying we are the best at it, but we´re getting there. Apart from that, we still have loads of new ideas and we are constantly on the move rolling them out! These new ideas sometimes demand a change of direction but I don´t think ours will see too dramatic a change in 2017. It’s very difficult to look ahead for more than 12 months but I’m not ruling anything out. All doors are open now, however, they can easily be closed!
One thing is certain: As soon as our new building is finished, we will continue adding new brands to our assortment and expanding the existing range, primarily with American brands.
“I think that we have one of the biggest in Europe at the moment, and we still don’t have all the available brands, which is our ultimate goal, of course.”
When SHOTS launch a new product, you make sure people know – for instance, just think of the launch of VIVE. Could you tell us more about your marketing strategy? And how do the trade and the consumers respond to it?
VIVE has been one of our biggest successes in the past year, and both consumers and customers gave us the thumbs up for this great brand in the high-end segment. I have to admit that we did get lucky when other brands announced a significant price increase just one week before VIVE’s launch. So, the VIVE brand got a big boost right away, and the rest is history!
Apart from that, our goal was to design and distribute an attractive and outstanding quality product and I think we have succeeded. Very early in the process, we started working on the marketing side of things with our clients, and we have focused a lot on the end consumers online. This doesn’t mean that we will start to sell to them directly. On the contrary! We will never compete with our loyal customers! It just means that we will start with new, and expand existing, marketing concepts in 2017. Our main goal is more brand-awareness to speed up sales for our retailers. Creating demand for our products among the consumers will be one of our main tasks in the coming year. The VIVE website is a very good example of that so check it out: www.vive4u.com.
As far as third-party brands are concerned, SHOTS traditionally had new additions on a monthly basis. Recently, you didn’t announce quite as many new products. Are you just fine-tuning your range, or were there other reasons?
Yes and No! No, we are not fine-tuning, and yes, there is another reason, we literally ran out of space!
Unfortunately, we have to temper our urge for expansion until the new warehouse is ready. By then, there will be room for upwards of 2000 pallets, which will allow us to add new products, but also to expand the machinery of Pharmquest. The new building will also improve the delivery speeds given the possibilities we are going to have for larger stocks per product.
“Our main goal is more brand-awareness to speed up sales for our retailers.”
Many of the core members of your team have been with SHOTS for a long time. How important is this kind of consistency within the team?
That is absolutely true! Ralf (Albers) just celebrated his 15th year with the team and many other members of the SHOTS crew have been with us for a long time. This is very important for continuity and the quality of the service we want to provide to our customers. Luckily, we have few fluctuations within the team because there is a relaxed, creative atmosphere within the company. It also helps that for the last 21 years, we have been extremely successful, which is pretty unique. We have to nurse this quality and hopefully, we’ll be able to continue in the same way!
Some time ago, you added Joost Hensen to the team. What exactly are his duties at SHOTS?
Joost stands in for me when I’m travelling. The team needed a leader who wasn’t as busy as I normally am. Joost has the right skills for the job and helps with the day-to-day management which gives me more time to look at the bigger picture. Joost is my operational saviour, which means I can focus on the planning of our future and work deep into the night just like in the olden days.
Roughly two years ago, you started SHOTS USA to carve out a niche for your company across the Atlantic – to the surprise of many people in the industry. Are you happy with the way this endeavour has turned out?
SHOTS America opened its doors in July 2015, and, this year, on the 31st of December, we will complete our first financial year. Looking back at it all, I can certainly be content. Working together with Ruben is an absolute pleasure as we think and act much the same. In October of this year, we expanded our American team with Joey (Teodoro) and Jason (Miller) and I expect this to make a big difference. Together with Ruben, we have created a good, strong foundation for a big American enterprise. Now it’s up to the young Shots America team to take the company to even greater heights than Europe has ever been before. No pressure there ;-))
The future looks bright and we are right on schedule. It hasn’t been easy but we have had a lot of fun doing it!
How hard was it to add something to the US market that hadn’t been there before?
Our products were distributed on the US market for many years by an external party. That really didn’t work out to our satisfaction. You know what they say? ‘If you want something doing right, do it yourself’. Now, one and a half years of hard labour later, we have all the clients back again. From here, it’s a matter of expanding these new co-operations and taking them to a higher level, just like we did in Europe.
Apart from the size and more homogeneous nature of the US market, what are the biggest differences between this territory and Europe?
The biggest difference is that there are a lot more players in the American market compared to the Europe, also most of them are bigger in size. This makes things a little more complicated. And then there is also the fact that a lot of these players are already good and loyal suppliers of Shots Europe on the distribution side, which opens up new possibilities and makes for mutual respect.
The fact that Americans would rather buy American products is well known, but those same Americans know that European products are very good. The decision of what is good and what is better I’d rather leave up to my clients. I think that there is room for both, and the more diverse the assortment, the better the ultimate quality of the products.
“The biggest difference is that there are a lot more players in the American market compared to the Europe, also most of them are bigger in size.”
Why do so few European companies gain a foothold in the US market?
The distance between Europe and America is wide and the running costs of an American company are a lot higher than those in Europe. Only established companies with enough resilience can do this and it takes a lot of ‘balls’ to go through with it, if I do say so myself. Not all the bumps and pot-holes on the road to success can be seen or assessed from afar. History tells us that the number of European companies that have succeeded on the American market is very small.
Looking back, how would you sum up the developments in the international market for adult products in 2016?
I think that 2016 has been the year of major changes in the market, on a wholesale and on a consumer level. I am happy to announce that we have added to our market share, although it gets more difficult when you are working on a high level like us. I am grateful for the trust that customers have in our company and year after year it gives us a lot of strength! We keep working hard on new technologies for our products and for online and offline client tools. In January, we will introduce a new logistic scan system, which is another huge step to ensure even faster deliveries and an upgraded service level.
In your opinion, what are the biggest problems in this market: the collapse of the traditional supply chain? Amazon? Competition from the Far East? Copies? A saturated market?
These are examples of the ‘standard’ threats in any industry. At SHOTS, we have been paying attention to these problems for a considerable amount of time. We are fighting to give our clients sufficient margins while explaining to them the dangers of low-cost products from Asia or the Middle-East. Our book-keeping is laden with invoices from the lawyers who fight to eliminate dangerous fake products and abuse of our trademarks. Basically, this has become a standard routine which probably won’t change in 2017. It has given us another year of experience in making it easier to stand our ground against these pirates.
Do you expect big changes in this market in 2017? Which challenges will we be facing next year?
The challenge hasn’t changed compared to other years and we would love to extend our market share for the 22nd year in a row! We would like to grow within our circle of customers, but also in territories and countries where we aren´t market leaders yet! Expansion is key and we are always on the lookout for hard-working talent to add to our team. We strive for larger and extensive stocks in combination with faster distribution techniques. We will also find the time to release more than 500 products!! I can’t wait!
There will be a new SHOTS production facility and office building in the Netherlands, the SHOTS USA team keeps growing, you are launching new products and product lines on a regular basis … would you say that your company is ready for the future?
I like to think that we are unprepared for the future, which keeps me sharp and motivated. One thing is sure, that as of February 2017, we will no longer be lacking space in our warehouses. Furthermore, as of April 2017, we will be able to move Pharmquest to seriously expand our production capacity. Not to mention that there are hundreds of other things to be taken care of, but that keeps me off the street …
I always say that we are just getting warmed up but I´m not sure anyone believes me anymore after 22 years! For me, I have the feeling that we have just started and the challenges of a big company are a lot more engaging than those of a small one. We will shift up another gear in 2017!
What are your wishes for 2017?
I wish everybody a happy, prosperous, and healthy 2017, with a little extra luck and wisdom for yourself, your family, colleagues, and friends. May the Force be with you!