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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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Lovehoney looks to US expansion, in the week that survey suggests retailers find it the most difficult market

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Lovehoney  is set to launch its Fifty Shades of Grey official collection in the US on Monday. The sex toy retailer is hoping for significant expansion in the notoriously difficult market – one which, research found this only week, more than half of UK retailers (46%) believe is the the most difficult territory for them to tackle.


Lovehoney believes, however, that it has found a “fantastic opportunity” to expand in the market where it has now been trading as Lovehoney.com for two years. The company also sells its goods in the US through wholesalers.

The Bath-based retailer first developed the Fifty Shades of Grey range in the UK in response to data showing a high level of searches on its website for products detailed in EL James’ best-selling erotic trilogy, such as pleasure balls, spanking paddles and bondage kits. Now, after winning out in the competition to buy the American rights for the Fifty Shades name, it is heading Stateside.

Lovehoney co-founder Neal Slateford (pictured right, with co-founder Richard Longhurst) said: “It really is an exciting time for Lovehoney. We successfully launched the range in Europe before Christmas while we awaited the decision on the rights for the Americans. We were thrilled to win that contract too earlier this year.

“Our market share in America is steadily growing and the Fifty Shades Collection represents a fantastic opportunity to introduce the Lovehoney brand to millions of Americans.”

Lovehoney’s American partner Dean Elliott said: “This is an incredible opportunity for American retailers to really make the most of the Fifty Shades of Grey phenomenon. It’s the biggest brand our industry has ever seen.”

But the news comes in the week that research from Barclays found half of UK retailers see the United States as the most difficult export market to break into – though it was also the market that more than half would prefer to move into. Some 23% said they would target Germany, followed by China, and Australia. More than half had experienced difficulties setting up in the US, followed by 33% who said the same for China, and 19% in Asia.

Barclays cited figures showing that UK retail spend is expected to grow by 11.5% between 2012 and 2016, hitting £345.6bn. But growth in the US is expected to grow by 17.5%, hitting £2.3tn by 2016, and in China by 85% to £3.6tn. Russian is predicted to see growth of 68% (to £649.8bn) and Brazil 49% (£536bn).

Lowe added: “It would be unreasonable to say there is no further growth in domestic markets, but it is becoming increasingly difficult to extract in the current climate. The economic realities across the western world mean that retailers now have international expansion firmly on their radar.”

The study also found that 33% see online as their preferred route into new markets. Among companies who already trade abroad, 52% preferred online. Wholesale was the preferred option for 10%, while 8% would opt for franchise partnerships, and only 6% would open stores.

Nearly a quarter said Africa would be the new retail growth story within a decade.

Commenting on the research, Jon Copestake, retail analyst at The Economist Intelligence Unit, said: “It’s unsurprising that British retailers have found the US a tough market to crack, something that Tesco previously found out to their own cost.  Not only is the US a mature market with established domestic players, its geographic size makes it makes it relatively fragmented. This means that strategy and penetration needs to be considered at a regional rather than a national level.

“China and Asia present different challenges, not least different cultural tastes and regulatory hurdles to foreign players. However, neither market can be ignored, the US because of high established per capita spending and China/Asia because of the rapid rate of growth taking place."
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