Tino Dietrich, CEO of Ella Paradis talks to Magnet Monster about the challenges & opportunities in growing a sexual wellbeing/product brand in the United States.
Q: Tino, when we spoke over the phone, you spoke about the evolution of the adult toy industry over the last two decades. Can you emphasise the key changes for our readers you've observed since being in the industry in regards to consumer behaviour?
A] Obviously, it depends from what angle you’re looking at this industry. When it comes to product there only have been developments in the past 5-10 years that have shaped the overall industry. Prior to these the industry has not been very innovative.
Overall, innovation has not been a significant part until about five or six years ago. Without looking at specific products or even categories, the larger, big picture has been to position the industry more towards lifestyle, health and wellness. New features and new designs of products intends to reflect that.
Obviously tech is going to play a much bigger role over the next few years as Bluetooth, AI or IoT will also influence the evolution of products in our industry.
A good reflection of the past evolution is packaging and overall branding. The adult toy industry has made various attempts to position itself more approachable and more mainstream.
The different perception in countries around the world, however, plays an important role in this strategy. The US is clearly a large market, but compared to some European Markets, the consumer is less educated because sexual education plays a different role.
Furthermore, classic retail represents the largest extent of this market. Additionally, sex is still stigmatized and taboo for many people. Stores like Ann Summers in the UK that you can find in city centers are not the norm. A good example of the absurdity is the story of banning sex toys from the CES in Las Vegas and the headlines that followed. The officials made a terrible mistake, but felt the pressure to do so. A year later, sexual wellness became one the most successful new additions to CES.
We will see more initiatives as large retailers like Walmart or Target have begun to list our product category and introduce the category to everyone.
The biggest first advances towards mainstream that we have been able to notice over the past 10 years or so stem from mainstream media that opened up the discussion around sex toys. Starting with Charlotte from “Sex and the City”, who decided to give up on men after discovering what the famous rabbit vibrator can do for her to the biggest advancement of the category itself because of the “50 shades of Grey” books and movies. With more women entering the industry, we are seeing our industry shift towards bettering catering to women allowing them to own their orgasm.
Additionally, we are seeing the LGBTQ community being better served as well, allowing everyone to use sex toys for closer, deeper relationships.
Q: Given the restrictions on traditional digital advertising channels on the industry, which mediums have allowed Ella Paradis to grow effectively online and provide an ROI?
A] That is a great question. Ella Paradis has taken a different route. From the very first day we were driven by the fact that we believe that self-care and -pleasure are neither luxury nor exclusive – a healthy and happy sexual wellbeing is for everyone. Ella Paradis has always been built and marketed with this principle in mind.
We started the company because we saw a huge void in the market. A solid ECommerce offering as we know it from other areas and industries did not exist in the US which is why we launched our company. Given the specific needs and wants of the US consumer compared to let’s say someone in the UK or in Switzerland, we knew our approach had to be different and much tailored towards our audience.
Content has therefore always been the core and center of the ellaparadis.com funnel strategy. We knew we had to create a balance between content, commerce and community. Additionally, we are facing restrictions and discrimination when it comes to advertising. Thus, we had to create a unique approach to build an effective advertising and marketing strategy, always with a heavy emphasis on content first.
There is no one single solution. Each category has its unique strategy – almost like a niche within a niche. However, learning about and understanding these challenges to then define a solution and build success is one of the most important pillars of our overall success.
Traditionally, PPC has always been an important part of the adult toy industry. That alone, however, will not build a funnel nor will it help with loyalty. You will need to add many more communication strategies and include channels like email marketing, content, affiliate or PR. At the end, it is the right blend of all that will get you the perfect mix – and solid ROI.
Q: Given the nature of the products, is there a large degree of cross-selling and experimentation involved with the consumer or more repeat purchases of SKUs than you would perhaps expect?
A] This very much depends on you and how you intend to position yourself as a brand. The consumer is looking for inspiration and is very appreciative when she or he gets information that will allow them to make a well informed decision. It requires a very solid technological solution to allow a consumer to understand what she or he might want to try. It is not black and white – like someone who bought a vibrator should automatically buy a toy cleaner and a lube. Not everyone knows for example that a silicone toy should never be used with a silicone lube as the toy’s silicone will degrade. So there is a certain process of education involved. We at ellaparadis.com call this “edutainment” and it is well founded in our core mission “to be the premier destination that offers solutions to our customers to make well informed decisions to life a better and healthier sensual and sexual life”.
When it comes to sex people often just see one angle. However, sex is far more than “just sex”. It plays an important role when it comes to love, relationships, overall well being and fertility. After all, we all would not be here if there was no sex.
Q: Following on from the previous question, how important is it for a brand in this industry to diversify their product selection in order to scale?
A] Our industry has very little brand awareness. Overall, there are very few brands given the size of the industry and the amount of companies there are. I would say brand is key if you ever wish to play a significant role in this industry. It is the only way to make a difference in what I would define as a very commoditized industry. The fact that the industry is so taboo and that mainstream advertising is not accessible in most markets, makes it hard to build a brand.
Most people rely on the classic pull rather than push within their marketing strategy, leaning more towards a classic sales strategy and not marketing per se. Price is still a significant differentiator when it comes to selling. Only a real brand and the values attached to that brand etc. will allow to build a solid foundation. And without a solid foundation there is nearly no chance to scale successfully. It doesn’t matter in what category or even niche you want to play a role, brand is key.
Interestingly enough though, there are brands within the niches that nearly own that niche – when it comes to BDSM, fetish or other niche markets, you have established companies that serve these markets for years and years very successfully.
When it comes to a more mainstream market, however, there are only a few big brands such as Durex or Trojan that are known to a broad audience. Other brands are either larger retailers or stem from media such as 50 shades of Grey etc.
No matter what niche or approach you chose or if you decide to be a manufacturer, a retailer or both – branding will be a key element to establish your company in this market from early on.
We have chosen to not only establish ourselves as the go-to online destination when it comes to online retail, but also established our very own brand Better Love. This brand has become one of our top selling brands since its launch last April. We entered the market to change the game with the first line of affordable, high quality sexual wellness devices that are not only easily available for purchase at our online retail store, but also targeted to a broad range of consumers. Whether it is a first purchase or someone wishes to add something new to their range of products we intend to assist our customers with a different, better kind of self-care and allow everyone, everywhere and any time to get acquainted with Better Love.
Ella Paradis was launched to break down barriers and disrupt outdated taboos regarding self-care and -pleasure. We launched our brand Better Love because we saw a void that needed to be filled with a line of beautiful, affordable and approachable sexual wellness products that complements our overall offerings.
Q: Lastly, depending on how the current COVID-19 situation plays out, how are you predicting this will impact the industry if the lockdowns last much longer than anticipated?
A] The situation caused by COVID-19 has changed everyone’s lives. The situation we all had to experience and for the most part are still experiencing will have a long lasting impact on many areas in our daily lives. Most retailers, small and large were forced to close down their stores. Some will never open again due to these closures. Our industry has always been very much offline-retail. The US - unlike Europe - has had an even higher degree of classic retail when it comes to sales channels. We have had many smaller players in the market who have not had an online presence or only a very limited one. Due to the lockdown and restrictions these stores have been hit very hard over the past weeks and could not generate any revenue. At the same time many consumers have shifted towards online offerings. As a result, e-commerce in our industry has seen a significant boost. Our company has seen as much as 500% growth Year over Year in the past two months.
Besides the business & economics of the industry, things are changing socially. When it comes to dating, prior to quarantine, we saw most people meeting their potential partners either through an app like Tinder or at events. Because of COVID this is all changing. We see less people wanting to expose themselves to someone new as they may not know where the person has been or who they’ve been in contact with.
And as for events, all have been cancelled indefinitely. Meaning, for those who are single, opportunities for meeting potential partners essentially vanished. Singles are having sex less and relying on toys more. We see mainstream media writing article after article about this rise in use during Coronavirus, which in turn lessens the stigma against it as well. I think we’ll see a large shift toward cyber intercourse that may lead to a new future for sex. We’re excited to see how we can fit into this new future and look forward to further shifts in the industry.
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