Russian and Ukrainian business for adults during the pandemic

Russian version

Our questions were answered by:

Dmitry Schepin (Kazanova69, wholesale company and retail net)

Yesenia Shamonina PREZERVATIVNAYA, Spielie-Willie and the Jade Rod, retail stores)

Ivan Knyazev (Intim69 retail net in the Moscow region)

Nadezhda Frolova (online sex shop in Moscow)

Olga Kotova (LogicGroup LLC, Samara, retail store).

Alexander Sinyukov and Georg Safaryan (LUXLITE Group of Companies, manufacturer)

Igor Tikhonov (retail store net Lovestor, Moscow)

Alexander Khanzhin (sex shop “Fun for adults”, Magnitogorsk)

Elena Aksyonova (wholesale company Impacto Group LLC and online retail boutique “50 Shades”)

What has changed in your business since the beginning of the isolation regime?

Dmitry Schepin

On the one hand, a lot has changed, and on the other, the built-in systems have helped to weather all external changes quite easily. We redirected our business for online, reorienting a fairly large part of our physical retail employees for online services.

Also, we immediately started working on advancing safety requirements in retail, having converted all stores into a non-contact format, now our seller contacts the buyer only through a small window.

Yesenia Shamonina

We currently have three stores, all offline. Two condom-selling – on Myasnitskaya and Arbat, and one “Spielie-Willie and the Jade Rod” on Belorusskaya. Naturally, we closed all three stores. We have a small online store “PRESERVATIVNAYA” (Condom store). There are no sex toys, only cosmetics, condoms, lubricants. Initially, we did not particularly position this as an online store, it was like an offline warehouse, so that people who are already our customers have a convenient opportunity to order without leaving home. Accordingly, there we had an increased (doubled) the number of orders. And the offline store is completely closed now and we are waiting for it to open.

Ivan Knyazev

We all realized that insufficient attention has been paid to online trading.

Nadezhda Frolova

In early April, I stopped making shipments to the regions, leaving only delivery within Moscow. Regional orders with me amounted to about 60%, and as soon as the restrictions on the movement of ordinary people began to get introduced, I had to stop regional shipments. Formally, logistics companies work, and it seems that it is possible to deliver orders. But I predicted a very large share of returns due to restrictions, up to 50%. And I decided not to risk it.

In addition, the Russian Post increased the shelf life of parcels to 2 months, i.e. the mail return will be back in about 3 months. For two weeks, the parcel makes its way to the post office, there the recipient waits for two months, and if the recipient changes his mind then after two months it will only be sent back, plus time for the return trip, plus a double delivery tariff. And the worst thing is, if the order is placed at the point of delivery that was open at the moment of the order and got closed while the delivery was in progress there will be a refund. Courier regional home door-to-door delivery also began to work poorly, and entry was closed to many settlements in general. Even if the client retained his intention to receive the order, in many cases he would simply not be able to do it technically. And in addition to problems with restrictions, there is also the problem of a sharp drop in incomes fr om people, normally the recipient would have got the order, and now when people try to save money, he would highly likely change his mind.

Olga Kotova

We began to actively develop online, began to think what to improve and how, made many changes to the site, came up with ideas on how to make delivery convenient and safe for the client. Developed marketing campaigns to attract and retain customers. We focused on newsletters and social networks.

For the first two weeks of self-isolation we have worked only for delivery and procession of orders. Then, after consulting with a lawyer, we opened points in compliance with all safety standards: masks, gloves, restrictive lines, warning posters. We organized separate windows with antiseptics and some essential goods. We made a schedule of disinfection of the room.

Alexander Sinyukov and Georg Safaryan

Most of the employees work remotely, almost everything. This complicates communication and solving operational issues. On the other hand, such conditions helped us optimize parts of the business processes, which in the future will facilitate the work of the company when isolation stops.

Igor Tikhonov

The business did not change, but simply almost stopped.

Alexander Khanzhin

At first there was fear of working ban. Then we found a way out, wrote an ad on the door that we were working as a pick-up point, we service through a window. The administration could not object.

Elena Aksyonova

I had to make changes to almost all processes – both imports, and warehouse operations, and the sales process itself. I had to dramatically redistribute responsibilities within the team and change priorities.

It is good that our team (except for the warehouse) works remotely fr om different parts of the world – this made it easier to adapt to new conditions.

Do you notice a decline or increase in sales?

Dmitry Schepin

We do not see either. The growth is at the level of previous years, but it is clear that these are the fruits of our work, and not the state of the market.

Yesenia Shamonina

Naturally, there is recession, sometimes we have barely enough to pay our employees. Everything else is at a loss.

Ivan Knyazev

Sales fell about 4-5 times.

Nadezhda Frolova

Since the beginning of April, I have had a sharp increase in sales, despite the rejection of regional shipments. The growth is twofold compared to the traditionally festive season: December, January, February, March. If you compare the number of orders in Moscow specifically with the previous holiday months, then in April I have 4-fold growth.

But it so happened that at the end of March there was a time when our programmers finished some kind of development that we had been working on since December. This development helps to optimize traffic. And at the end of March I put it into practice. For example, for 300 visitors a day, I had 20 orders in April-May. However, I cannot know now what caused this growth. It may be that retail stores closed and their visitors went online. It may be that people were locked up in their homes instead of work, and they got a lot of free time. I did not have the opportunity to compare sales before and after the introduction of the new technology under the same conditions, and I don’t know which factor influenced the sales growth in April and May. I think that combined effect of all factors gave such a result.

Olga Kotova

Due to the general decline offline revenue fell significantly. But online has grown by 40-50%.

Alexander Sinyukov and Georg Safaryan

Of course, there has been a decline in sales in some areas. Some regions work part-time, but somewhere work stopped completely. Now the regions are gradually recovering. As for sales in sex shops, the situation here is not very good. Many stores have closed, which cannot but affect the sales of our condoms in this distribution channel.

But at the same time, several our directions show an increase in sales (our online store and sales through marketplaces). In general, we sank, but not very much.

Igor Tikhonov

A 10-times recession.

Alexander Khanzhin

At first there was a recession, about 10 days, people rarely left homes. Then the situation improved.

Elena Aksyonova

Growth. For all 3 months (March, April and May) we are on the rise.

Of the three crisis months the most significant growth was recorded in April – we grew by 65% compared to last year.

What mode are you currently working in?

Dmitry Schepin

In the optimistic one!

Yesenia Shamonina

There is one online store. For a couple of hours a day, employees come here, collect orders and send them with couriers.

Ivan Knyazev

Out of 12 stores, 6 are open. Access to the trading floor is restricted, we only process orders.

Nadezhda Frolova

In time pressure mode. There were a few days of very active surges in which I realized that this was the ceiling for my structure. I simply cannot physically “eat” more orders, and for further growth it is necessary to change the architecture of the business.

Olga Kotova

We are now working in our normal mode, in compliance with safety rules.

Alexander Sinyukov and Georg Safaryan

Now 80% of employees are working remotely, 20% – in an office, as shipments come every day. Now there is no difference, whether it is Friday or Sunday, most of the employees are work not on schedule but on demand.

Igor Tikhonov

Of the 22 stores, 5 are “half-open” – they work as pick-up points of Internet orders, but we do not have an increase in the number of orders that everyone is shouting about. Sometimes sellers try to sell something extra, but it is risky because inspectors are everywhere now. Already me and many others have been fined. That’s how they help small business.

Alexander Khanzhin

We work as usual.

Elena Aksyonova

We redoubled our efforts, adapting to new conditions.

I really wanted to relax a little after the season, but it happen. The changes affected mainly the warehouse – we tightened security measures (masks, gloves, sanitizers) and the warehouse personnel work in shifts to ensure social distance between employees. In addition, all deliveries to the warehouse are quarantined 24 hours. This slightly slowed down the process of acceptance of goods. And for the rest, everything is as usual.

Are there any delays in supplies?

Dmitry Schepin

Of course not.

Yesenia Shamonina

We are not refilling our stocks right now. We are selling everything that is available, because we always have good leftovers. We hope that the situation will change soon.

Ivan Knyazev

So far we are managing with old stocks.

Nadezhda Frolova

No. I was very lucky with the supplier. In this difficult period, I expected a mess and problems with shipments, or even a complete stop of shipments. It is clear that the employees have to work to get salaries, and other partners are very dependent on supplies, and indeed we can be closed any day. In April, I was preparing for the worst. However, the “Supplier of Happiness” is very advanced in Internet technologies, and it has focused its entire business on working with online stores. I don’t know what they did and how they stood on their feet at that time, but shipments for online stores went without any problems at all. There were, of course, small problems, but nothing out of the ordinary. And given the difficult situation on the verge of a complete halt to the work of most companies in the country, they generally did the impossible.

Olga Kotova

No, fortunately, none of the suppliers failed. On the contrary, they tried to make concessions, offered marketing support and additional training for employees.

Alexander Sinyukov and Georg Safaryan

Unfortunately, yes. But for the most part, these delays do not exceed 2 weeks, so for most items we have enough stocks to ensure smooth operation. In general, we will survive!

Igor Tikhonov

There are no delays in deliveries, as there are no purchases and deliveries themselves. And, apparently, this is for long.

Alexander Khanzhin

No.

Elena Aksyonova

Unfortunately, there is. Our goods are mainly fr om Europe and the situation has hit our European suppliers badly.

There are failures in their supply and production chains, and there are limitation of warehouse personnel. This significantly slowed down the speed of interaction and order processing.

We hope that the situation will change soon. How do you plan to return to normal?

Dmitry Schepin

We come out with a lot of new ideas that were born during the isolation period, in particular on scaling the influence of our projects – the IT Museum, COFFEE 18+ and the Kazanova69 training club. All of these worked excellently in the online format, we never stop developing!

Yesenia Shamonina

Naturally, we will go out with caution. We will not resume our previous mode, in terms of hours of work. Convenience stores, most likely, for some time will not work around the clock. The Arbat shop is also a question, because it was designed only for walking traffic, tourists – this is a souvenir shop. Let's see what will happen to people, firstly. And secondly, what kind of rent there will be after the opening. We do not yet understand what will happen to this store. We don’t want to close anything. We will reduce the number of shifts, probably. There were 2-3 people in the store on Arbat, because there were a lot of people. Most likely we will leave only one store.

Ivan Knyazev

We gradually open previously closed stores. With the launch of construction and industry, the number of people on the streets began to increase. In this regard, we increased the number of working stores from 4 to 8.

After long “vacations”, we resumed training for sellers. We recall the goods, sales techniques, we train on each other. We organized video conferences between employees with product presentations from each employee.

Nadezhda Frolova

When all restrictions are removed, I will resume work with the regions. But already the volume of orders has reached the lim it, my structure simply cannot cope with a larger number, we have been working at our lim it these months. I cannot change the structure momentarily. I will optimize some processes, strengthen weak links. But all the same, it will be necessary to lim it the number of orders, if the regions also give 4-fold growth. Probably I will increase prices and the minimal order amount from 900 to 1,500 rubles in order to leave the pool of the most profitable orders. I don’t know what exactly influenced the growth of orders in Moscow in April – May, and how many orders will be there after the restrictions are lifted, when retail stores open and people will become poorer and leave the house in search of work.

Olga Kotova

We hope that in the near future the situation will stabilize, and this will positively affect sales

Alexander Sinyukov and Georg Safaryan

This is probably the most difficult question. It all depends on when this regime will end, and what will happen to the epidemiological situation in Moscow. On the one hand, it is very important for us to begin full-time work as soon as possible, on the other hand, the health of employees is important even more. There are only two options: full access to the office, or gradual. We will make the final decision 1-2 days before the restrictions are lifted. Now we are developing a plan for a gradual exit.

Igor Tikhonov

Planning in our country is just stupid! We will just open the stores if we can collect the dispersed sellers, and then we will sit there miserable income. Most likely, the previous demand for the product will no longer return. We will reduce office staff and cut salaries. We will conduct the next round of negotiations with landlords to reduce the rents. Negotiations will not be successful everywhere, some points will have to be closed. Networks that are busy with brand infusion will try to capture these points.

Alexander Khanzhin

It seems that this regime is even beneficial for us (sex-shoppers)! According to the 10-years statistics, May is usually the most disastrous month! But not this year. Most likely this is due to the fact that people didn’t go anywhere, clothing stores and shopping centers are closed. People have some money left, so we have a certain rise both online and offline.

Elena Aksyonova

We removed all unnecessary processes, clearly defined the goals and focus of each team member. We will come out updated and transferred to a qualitatively different level.

Sexshopers.ru cordially thanks everyone who responded!