Sexual Wellness Capitalizes on the Path from Area of interest to Mainstream

The Role of Retail

As with most whitespace endeavors, a key to unlocking the full opportunity requires representation in traditional retail channels. The opportunity for retailers in this category has always existed, but historically, buyers have been hesitant. Some visionary merchants embraced the early pioneers like Jimmyjane but struggled with where to merchandise these brands, which is often the case when defining whitespace opportunities.

Goop tackled the topic of sex through the lens of wellness with its enthusiastic embrace of jade eggs, vaginal steaming, and the launch of a candle named This Smells Like My Vagina, creating controversy along the way that normalized the discussion about intimate body parts and functions. Where Gwyneth went, others followed.

Products promoting sex are no longer tucked away—remember the back room in beauty supply store Ricky’s NYC—today they are merchandised front and center. Online lifestyle and beauty retailers like Cult Beauty and Feelunique paved the way, creating destinations for this new category of brands. As the category became palatable to the mainstream, brick-and-mortar retail followed suit, holistically integrating sexual wellness into their assortments and reshaping the concept of personal care. It’s hard to find a retailer today that isn’t carrying sexual wellness products in their product mix. According to recent Spate search numbers, consumers are increasingly turning to Target and Dollar General for sexual wellness products, with a 15.7% increase and 14.9% growth since last year, respectively.

The Category Drivers

As with many trends, COVID-19 accelerated the traction of the sexual wellness category and these stigma-busting start-ups. The pandemic put sex lives under the microscope, shifting the conversation around sexual wellness and pleasure. As lockdown restrictions lift, retailers are seeing a “sexplosion” from post-pandemic consumer interest in intimacy.

In early May, Boots UK reported sales of condoms almost doubled with a 98% increase in sales, while searches online for condoms increased more than 30% and searches for sex toys increased 50% year-over -ear. Competitor Superdrug witnessed a 65% increase in online condom sales and a 232% increase in lube and toy sales online.

Millennials and Gen Zers are responsible for the massive change in the perception of the sexual wellness category, buying these products for themselves through the lens of self-care. Even though young adults generally have less sex, Gen Zs have a relatively open-minded attitude towards sex. However, it’s not only younger generations embracing sexual wellness. Gen X founders are unflinching in addressing the lack of information and products addressing the 34-66 (depending on who you ask) symptoms of menopause, building brands and communities for women to take control of this life stage.

The cross-generational focus on female health, preventative wellness, and holistic care has given rise to an influx of products and services focused on vaginal care, from washes, wipes, and moisturizers to dermatological procedures and spa services, all falling under the umbrella of personal care and making up the assortments of sexual wellness brands.

Technavio attributes the category’s growth to five key drivers: mainstream exposure in the media, ease of purchase and availability, shifts in social norms, a marked increase in the number of start-ups in the category, and shifting perceptions of investors.

Follow the Money

In March, UK-based sex tech specialists Healthy Pleasure Group launched Amboy Street Ventures, the world’s first venture capital fund focused solely on sexual health and technology start-ups. Its first two investments were in the sexual wellness brand Dame and the menopause telemedicine clinic Gennev. According to Pitchbook, the number of VC deals in the femtech space, which includes sexual wellness consumer brands, in 2019 reached an all-time high of 76 deals representing $558 million in investment. As of August 2021, there has been $812 million invested into 61 deals.

Investors like patterns and often back businesses that look, sound, or feel familiar. The shifts in consumer behavior and attitudes toward sex and sexual health coupled with the increased opportunity in traditional retail have motivated investment into what has evolved into the sexual wellness category. Investors claiming a trend has become a prerequisite for creating the tipping point for going from niche to mainstream. We are witnessing such an inflection point in the burgeoning sexual wellness category. While the category is broad for our purposes, we’re focused on deal flow related to brands sitting squarely at the intersection of beauty and wellness.