Nicolas Perez: How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More
An Interview With Orlando Zayas
Keep your focus on the lifetime value of a customer.
Keep your focus on the high cost of customer acquisition.
If you can Wow them with something a little extra for free it goes a long way.
Always make sure the customer ends up happy.
As part of my series about the “How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More”, I had the pleasure of interviewing Nicolas Perez, President and Owner of Condom World, an 18 location chain of adult novelty stores located in Puerto Rico. His latest venture is called Toys Tonight, which offers 1-hour deliveries of adult novelty products in Miami. Nicholas hopes to bring happiness to people’s lives by destigmatizing sex and sexual toys, allowing people and couples to explore and have fun with their sexuality.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
My background is in corporate marketing, so being part of the sex industry was the furthest thing from my mind 30 years ago. In 1992, I decided to leave the corporate world and represent brands on my own. One thing led to another and I started representing products from a sex institute in California. One of the first products they had was an all-natural supplement for erectile dysfunction. I had no idea at the time that the demand for this type of product would be so high, this is before Viagra was on the market.
The success I had with that product led me down this path, and once I became involved in this industry, I realized it wasn’t much different than the corporate world I was in previously. The field was full of professional people interested in helping customers fill a need in their lives. The industry is divided into two main categories, there is the porn industry and the adult toy business. The people involved in each industry are very different. While the porn industry has been well documented in movies like Boogie Nights, the toy industry is much tamer. On one hand, it’s a lot more fun than selling Jell-O, but it’s not as wild as some people might believe.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
When I had my first store in Old San Juan, Puerto Rico, a client of mine told me that he recently got into the stripping business and was making a ton of money. I was shocked because he was barely 5’ tall and overweight. I imagined to myself that the women may be having fun with him because while normally the expectation might be that a stripper would have a perfect body if this guy came out in that body and showed a lot of confidence, it might make for good fun. My imagination was going wild but I told him that women came to the store all the time looking for strippers for their bachelorette parties, so I welcomed him to leave his cards at the store.
He gave me his cards as he was leaving the store and when I looked at them, I realized he was in the floor stripping service. I had a good laugh with myself. It was mostly a fun story I love sharing, but I guess there is a lesson there that in communications there is always a lot of room for misunderstanding.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
My first store in Old San Juan was tiny, less than 500 square feet. One day a gentleman walked in and looked around and huffed, “You Call This An Adult Store?” Instead of being insulted, I approached him and asked what he knew about adult stores. He told me he owned a chain of stores in Nevada and California. I was intrigued and invited him for a beer around the corner. We talked for a while and hit it off and then I went back to work.
Later that same day when this man was trying to leave San Juan he couldn’t because an oil truck had overturned on the only road out of town, so he was stuck for a few hours. He told his assistant to go fetch me because he was bored. I came back to meet him, and he ended up inviting me to Nevada to see his stores. I went out there, toured California with him, and he introduced me to some of the key manufacturers in the industry. We had plans of going into business together that didn’t end up working out, but that trip gave me the inspiration to put up my own chain of stores.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
I grew up in poverty, one of 10 children from rural Puerto Rico. Somehow, I knew that I would one day be a businessman. As a child, I read stories of titans of industry like Rockefeller and Carnegie. I found their rags to riches stories inspirational.
What do you think makes your company stand out? Can you share a story?
I have lots of stories about Condom World, but these days I’m more excited about Toys Tonight, where I offer a 1-hour delivery service in the Miami area. Making deliveries quickly has become an obsession. So far, our fastest order from the time it was placed, to the time it was delivered in downtown Miami, was 12 minutes. The customer was amazed. I later learned that Amazon with their drone delivery system was able to deliver an order to a customer in 13 minutes, so we beat them by a minute.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I don’t see so many people in this industry burn out the way they did in the corporate world that I used to be a part of. When I came out of grad school in the 1980s, it was a culture of working hard and playing hard. That’s a recipe for disaster. I’m glad today’s youth are taking a more balanced approach to life and work.
Ok super. Now let’s jump to the main questions of our interview. The so-called “Retail Apocalypse” has been going on for about a decade. The Pandemic only made things much worse for retailers in general. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
Fortunately for me, my stores are located in Puerto Rico and even though it is part of the US, consumers there are not as used to making online purchases as they are here. That’s due in part to the fact that Puerto Rico is an afterthought for many online companies, sometimes they don’t even ship there and if they do, they charge extra. But another difference is that we pride ourselves on giving excellent service and Puerto Ricans like to go to stores and talk to our employees. Geographically and culturally, we have an advantage there.
Still, I personally do almost all my purchasing online so I know the writing is on the wall for the current retail system. While there are significant advantages of having a brick and mortar presence in a neighborhood, Amazon is becoming aware of this. We’ve seen the giant move from having a few distribution centers to having distribution centers outside every major city and now inside the city through their Whole Foods stores.
The future is omnichannel, probably the best example I’ve seen is Best Buy. Eventually, I see Toys Tonight also being omnichannel, but for right now, I’m focusing on the quick delivery system which I think distinguishes us from everyone else.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
Creating brands that are able to sustain price competition is my background. Price competition is a race to the bottom, so I try to stay out of that. Basically, I always want to have a brand that people are willing to pay a premium for. If you don’t really have a reason for customers to keep buying your brand other than price, then you have to accept that outcome.
What are the most common mistakes you have seen CEOs & founders make when they start a retail business? What can be done to avoid those errors?
I’ve started several businesses and have mentored others in starting businesses. For retail, location is king. If you don’t have the foot traffic to sustain your business, the investment needed to promote your business is usually more than what a small business owner can sustain. Another mistake I see is spending a lot of money on the build-out of the business. I would suggest to most startup retail businesses to make sure they are using their capital wisely. Your store may not be the prettiest when it opens up, but if you’re successful you can remodel it later. Just get it open at the lowest cost possible.
The other huge mistake I’ve seen is when business owners who have had some success, start spending that success instead of reinvesting it in the business. Always put it back into the business, especially in the early stages.
This might be intuitive, but I think it’s helpful to specifically articulate it. In your words, can you share a few reasons why great customer service and a great customer experience is essential for success in business in general and for retail in particular?
What many owners don’t understand is the high-cost of customer acquisition and the lifetime revenue stream of a customer. If they kept those two concepts in mind they’d recognize that you don’t have to win every transaction. Making sure a customer stays satisfied and comes back to you is the best long term strategy.
We have all had times either in a store, or online, when we’ve had a very poor experience as a customer or user. If the importance of a good customer experience is so intuitive, and apparent, where is the disconnect? How is it that so many companies do not make this a priority?
As I mentioned previously, this is mostly a result of short-term thinking and believing you have to make money on every transaction.
Can you share with us a story from your experience about a customer who was “Wowed” by the experience you provided?
For me, getting an online order to a customer in 12 minutes is pretty astounding. The customer was wowed and that makes me feel great. I just can’t top that one!
Did that Wow! experience have any long-term ripple effects? Can you share the story?
It’s too early to tell, but based on anecdotal evidence, customers are wowed by the experience of being able to get their adult products to them so quickly. Just yesterday, a tourist from New York told me over the phone that this was an incredible concept. He came to Miami to spend the weekend with his wife, but they forgot to bring any toys. When I told him that delivery meant that he would have his order in an hour he was blown away.
A fantastic retail experience isn’t just one specific thing. It can be a composite of many different subtle elements fused together. Can you help us break down and identify the different ingredients that come together to create a “fantastic retail experience”?
I think it’s all about the golden rule, just treat the customer as you wish to be treated. We use plain brown paper shopping bags instead of plastering our logo on them in order to make sure there is total discretion in our deliveries. The bags are stapled shut so that drivers can’t peak in to see what they are delivering. Our drivers are independent couriers so they don’t look any different than the guys delivering your Uber Eats orders. Our label only has the name of the person who is receiving the package and their address, no return address appears, and we always add a sachet bag full of free sample products.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
- The Customer is not always right, but for the most part, you must treat them as if they are.
You are not always going to get everything right the first time. A customer may be disappointed in a product or a driver that you may not have any control over. Either way, you need to go into problem resolution mode with the idea of keeping the customer happy.
I’ve had situations where customers say they haven’t received a product. I know there are scammers out there, but I really try to believe them. For the most part, I believe when someone is taking the time to call it is because they are genuinely unhappy and at least I get an opportunity to fix it.
In every unhappy customer situation, you need to find out what it’s going to take to make them happy, keeping the focus on the long term helps you make the right decision.
Each of the following points ties directly back to making sure your customer is satisfied and will return.
2. Keep your focus on the lifetime value of a customer.
3. Keep your focus on the high cost of customer acquisition.
4. If you can Wow them with something a little extra for free it goes a long way.
5. Always make sure the customer ends up happy.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I think people are born to make different contributions. My contribution has been in the field of human sexuality. I’ve broken some barriers, and in the process, I like to think I’ve enriched the lives of many people. Honestly, I can’t think of anything better than that. And what’s more, I’ve enjoyed my work. Most people who work in my industry feel the same. It’s a great industry and there is a lot of room for others to participate.
There are many other worthwhile movements for people to participate in including racial equality, climate change and preserving the beauty of nature. I support and believe in all of those, but I’m happy making the contributions in my corner. I’ll leave that work to others.
How can our readers further follow your work?
Toys Tonight is still a new concept, although it has had a great start. My plan is to turn this vision into a nationwide company. Keep your eye on Toys Tonight and we’ll see what the future brings.
This was very inspiring. Thank you so much for the time you spent with this!
About The Interviewer: Orlando Zayas is the CEO of Katapult, an award-winning omnichannel payment platform. Zayas is known for his revenue growth strategies and visionary leadership in the eCommerce and retail space. His future-forward expertise has led companies such as GE Capital, Safe-Guard Products International, and DRB Capital. Zayas is also highly committed to providing educational opportunities to underprivileged communities through his philanthropic endeavors. Zayas’ business insights are regularly featured in publications such as Forbes, Entrepreneur Magazine, Retail Insights, and more.
