What will happen after Brexit? That question is on many people’s minds right now, on both sides of the Channel. The consequences of this watershed decision will reverberate far and wide, and it will also affect the adult market – especially in Great Britain. Simon Prescott, Director of British retail chain Nice ‘n’ Naughty, knows his home market inside out, and in our interview, we talk about the effects of Brexit as well as other developments that are affecting the British retail trade for adult products.
How would you sum up the current situation of the British adult retail market? Which are the developments that have the greatest impact on the British market right now? Simon Prescott: The British adult market continues to be troubled, witnessing the recent demise of big names from the industry. Conversely internet sales continue to increase from the big names within the industry. The internet “threat” has increased as the major players gain mass and momentum and almost dictate the market price, which puts pressure on margins. Having said that, this provides opportunities for service lead, resourceful retailers such as Nice ‘n’ Naughty, to try innovative initiatives to increase footfall and spend.
In your opinion, what are the greatest problems facing the British adult retail market at the moment? Which of these problems are the result of external factors, and which are home-made, so to speak?
The pound/dollar post Brexit is a serious issue as purchase costs inevitably rise and retail prices remain fixed, clearly an external factor. I’m not aware of homemade factors other than the difficulty we all experience in reclaiming historic licence fees post Westminster.
In many countries in Europe, the biggest problems right now have to do with the disintegration of the traditional supply chain (producer-distributors-retailer). Is there a similar development in your country?
The question almost assumes we have already left Europe! We have lots of European suppliers and experience the same issues as you refer to. As distributors fail, producers will undeniably endeavor to deal direct with retailers, in the hope of growing margins.
In several European countries, there are examples of brick and mortar stores struggling while adult online shops flourish. Is the situation in the UK similar to that?
Online is doing great business whether you are a dedicated online retailer or a bricks and mortar business with a good web presence. Certainly, we see web sales continue to grow and augment our historic business.
Everyone is talking about Brexit. Will this cut have a big impact on the British adult industry? Will it restrain the consumer’s willingness to spend money?
Brexit will mean our products will cost more, since the pound has effectively devalued, but customers always find money for things they want, rather than things they need. Our job at Nice n Naughty is to have a range of products people want!
“Customers always find money for things they want, rather than things they need.” – Simon Prescott
Comparing the current situation to 1999, when you founded Nice ‘n’ Naughty, what has changed the most?
I guess there are fewer players now and the industry has reached maturity. It is now a professional business run by professionals. Customers are more discerning and look for range, quality and service. These were the principles Nice ‘n’ Naughty were founded upon.
Was everything easier back in the day?
Everything is always easier when you have enormous margins and customers who are less sophisticated in their needs. There was a lot less to choose from back in the day and customers were happy with a small selection of products and the of course our biggest sellers were DVD’s and going further back VHS.
What are your top sellers at the moment?
Fetish sales continue to surprise us. The Fifty Shades books, films and products make it easy to sell fetish products as it is an acceptable conversation to have with customers and the taboo that once was has disappeared.
Are things such as sex tech, teledildonics, etc. a big deal in the UK? And what about ‘male toys’?
Male toys have always been great sellers. I think its early days still for teledildonics but I believe these will be a good future market. You just have to see the boom in VR in PC gaming. The technologies are made to be married.
What are the most important factors for your customers when they choose and buy adult products?
Service is first, then service and lastly service. Customers come to Nice ‘n’ Naughty because we have knowledgeable, helpful staff who can guide them through the plethora of products on the shelves.
“Service is first, then service and lastly service.” – Simon Prescott
How much acceptance is there in the British market for sex toys?
The British are no different to our European cousins. They are widely purchased and used.
What has to change so erotic products will be accepted by all consumers – i.e. how do you make adult products mainstream?
The environment needs to be the same as all other High Street stores. No semi locked doors or blacked out windows. The atmosphere needs to be warm and inviting. We find that appealing window displays can play a large factor in drawing customers through the door. Once they’re in the store they realize that we are much like any other High Street store – just with more exciting products.
The effectiveness of brands in the erotic retails trade is still up for discussion. Do you put emphasis on brands in your stores, and what are the reasons for your strategy?
We currently display in brands but also so display products in categories, either by product group or brand. But one thing is certain, consumers now shop for brands in adult stores, like they do in their favourite supermarket.
Do lots of people ask for specific brands when they visit your stores?
Yes. If you find a brand you trust then why not stick to it. Certainly, it helps the sale of new products to that customer if it is a brand they trust.
What are the advantages of selling brands?
The advantage of selling in brands, is the displaying of the products in the store. The suppliers support their brands and ensure we have all the POS that attracts the customer’s interest. This helps to build brand loyalty. People are a lot less likely to pick up a lubricant from a supermarket if they are brand loyal to a lubricant they can only buy in a Nice ‘n’ Naughty store.
Brand sceptics often argue that the consumers can easily compare the prices of brand products on the internet, meaning they will likely turn to an online shop since those can afford to sell products cheaper than a brick and mortar store. How much truth is in this argument, and wouldn’t that qualify as an argument against brands?
I am sure in any market segment, for any product, you can always buy a brand cheaper online, but that’s not the whole story. Liking a brand isn’t enough. Consumers thirst for information that knowledgeable staff can provide and draw comparisons with other brands. As service increases, customers are less likely to be tempted to buy online for a minor saving and a delay in getting the goods.
In order to steer clear of the price comparison problem, more and more retailers are selling private label products that you can’t buy anywhere else. What is your opinion on this development?
There is a great argument for offering customers products with a name they trust. We offer a few so far and they equal the sales levels of branded products but they are no substitute and neither are they a cheap imitation. They are just a piece in the product jigsaw.
Nice ‘n’ Naughty has always focused on providing information and advice. With customers becoming more knowledgeable, is that still a priority today?
Always and we have several exciting new initiatives coming, watch this space.
Like many store owners in the brick and mortar trade, you also have an online shop. Is it a necessity to diversify like that to be successful in today’s market?
You can learn a lot from a website, for example the elasticity of price and demand. So as well as generating additional sales it’s a great way of testing new product interest or price. Furthermore, the online store is a useful asset to the brick and mortar stores. They can see what is selling online and stock these items in the stores.
Do you reach more or less the same consumer groups with all of these channels, or are there differences?
It is the same consumer group, as they purchase the same type of products; however, many customers still like to talk to a staff member for advice. Many store customers are return business and we often see them weekly or even several times a week. Customers may not want to browse the store but don’t want parcels to be delivered and they take advantage of the click and collect service we offer.
Can you tell us something about your future plans? Where do you intend to go with Nice ‘n’ Naughty in the next years?
There is a plan and it’s exciting. But that’s all I will say for now.
How will the adult retail market develop over the course of the next years? Do you see big changes on the horizon?
I don’t see big changes, just more of the same. The internet will continue to play a volume role as the likes of EBAY and Amazon carry more and more product, but there will always be a market of quality, bricks and mortar stores who put customer face to face interaction and service at the top of its list.