In the two years since Matthew Matsudaira took the helm as CEO, Pipedream has implemented several changes driven by a renewed focus on culture, operational efficiency and product differentiation. The reshaping of Pipedream Products continues as the company recently bid farewell to its long-established Chatsworth, Calif.-based warehouse and moved into its new multi-million-dollar 125,000- square-foot warehouse in Illinois.
While the company’s headquarters will remain in its existing location, Pipedream’s new warehouse and distribution facility will allow Pipedream to fulfill orders for customers in 48 hours or less, and its central location is intended to enable effective servicing of customers on both coasts. The company is also promising improved quality measures, larger volume hold, smarter logistics and reduction in damages.
We will be successful by staying committed to our shared vision for the new Pipedream.
The distribution center’s move — which Pipedream says is the result of more than a year of planning — was made much more difficult due to the global pandemic. Originally slated to take place over the course of three months, Pipedream completed its move in 30 days. Regardless of the added stress caused by the rushed move, Matsudaira says that the company overall took the pandemic in stride, having already established a strong foundation that allowed them to weather the storm.
Matsudaira came to the pleasure products industry in 2018 following successful leadership roles at ultra-performers Nordstrom, Amazon and Chewy.com. With a laser focus on his team, retailers, distributors and consumers, Matsudaira ushered in a new era of strategic growth and improvement for the company.
Within the last two years Pipedream has made changes to its staff, ventured into new trade show exhibitions and simplified its annual product releases so as to not overwhelm its clientele. Matsudaira has taken a phased approach to implementing infrastructure improvements, which has also included moving the manufacturing of Pipedream’s popular rubber products to a new facility in Mexico.
Pipedream is also streamlining distribution for its European customers with a new state-of-the-art distribution center in the Netherlands. The facility will stock Pipedream’s top-selling European SKUs with customer service provided in the same time zone, which means quicker responses regarding orders as well as lessened lead times for product shipments. To combat the brand degradation that the company says is plaguing the European marketplace, Pipedream Products has chosen a select group of distribution partners following a rigorous Request for Proposal (RFP) selection process during which the company evaluated partnerships based on the distributor’s commitment to the brand’s success and other factors, including whether they carried their own competing products. Pipedream’s new “Elite Distribution” partners will carry the full range of Pipedream European top-sellers and will service retailers with dedicated marketing support.
Even with all of the company’s changes, Pipedream has maintained its popularity among consumers with bestselling pleasure product designs such as Her Ultimate Pleasure — which has been gifted to celebrities at a Golden Globes event this year, and flew off the shelves at last year’s Sex Expo in New York. Pipedream’s infamous life-size masturbators have also landed in mainstream movies over the last two years — the brand’s Kitty doll appeared in the Seth Rogan movie “Good Boys,” and most recently Pipedream’s Fuck Me Silly 3 mega-masturbator was featured in an episode of “Dave,” an FXX comedy TV show.
Much like many other companies, Pipedream’s headquarters team has adapted to working from home due to the pandemic and has expanded its use of virtual communication platforms to connect with retailers for product trainings and host online consumer events such as Ladies’ Nights. The pandemic also inspired the company to recently give back — in April, as pandemic cases were rising, Pipedream donated 150 Jimmyjane muscle massagers to local emergency room staff.
The company has also continued to roll out innovative new pleasure products despite the pandemic. Their first-quarter releases included the 3Some line of uniquely shaped vibrators and stimulators, the lifelike triple-density King Cock Plus, and new PDX Male masturbators with DirtyTalk interactivity. The product releases were accompanied by a digital e-training video offering a virtual showroom tour complete with benefits and sales tips, which retailers can watch and learn from the comfort of their own homes.
Even with social distancing and the relocation of Pipedream’s distribution center and manufacturing facility, the Pipedream team remains stronger than ever. Matsudaira says that the company’s morale is up and the team is ready to build its future collaboratively. In our exclusive interview with Matsudaira he gives us an update on all of Pipedream’s latest moves and his outlook for the company as it continues to expand globally.
XBIZ: What are some of the challenges that Pipedream has overcome since you’ve taken over as CEO?
Matthew Matsudaira: When I took the helm as CEO of Pipedream, I knew that the infrastructure of the business needed to be stabilized and the company needed a clear vision for the future that the organization could drive towards.
I took a phased approach to the infrastructure improvements, starting with the move of rubber manufacturing to our brand-new facility in Mexico. This has increased our capacity and allowed us to ship our award-winning formula more efficiently. The next challenge that I wanted to address was the older warehouse space that we had been operating out of for decades. This inefficient space had been impacting our fill rates and I knew we would not be able to grow with our customers with those constraints. Our new warehouse in Illinois, which we inaugurated in May, was a significant investment that gives us the ability to service our customers on both coasts much more effectively. Our new warehouse in Europe, which we have just debuted, is our latest exciting move that will now make it easier for our strategic partners to access our products.
In order to achieve the vision I have for Pipedream, it is important to have the right culture and talent in place. This has been a significant focus ever since I started. I wanted to make sure that Pipedream is a great place to work, where people feel supported, are allowed to work on challenging yet rewarding work, and collaboration is a focus. I have managed to recruit top talent from global consumer brands who share my belief in creating an inclusive culture, where excellence is non-negotiable. I love to see how my team works together to support our shared vision and their accomplishments over the last two years have been impressive.
Along with the investment in internal improvements, I have also focused on the customer partnerships that Pipedream has established over the years. We have strategic partners around the globe who are committed to growing our brand and it has been a pleasure getting to know them and working to support our joint initiatives.
XBIZ: What led to the decision to move your operations to Illinois? How do Pipedream’s new facilities in Illinois compare to its former headquarters in Chatsworth?
Matsudaira: This was not a decision that I made overnight. Our long-range plan has included sourcing a facility that allowed us to be central to all our customers. By moving our distribution to Illinois, it enables Pipedream to implement operational efficiencies and logistics improvements that we were not able to accomplish in the older warehouse in California. In terms of the facility, we have triple the bay doors to allow us to receive and send out shipments faster and more efficiently. The ceilings are double the height, so we can utilize the space better, and our employees can pick and pack without constraints. Additionally, we invested in best-in-class warehouse management technology that will have a significant impact on our supply chain capabilities.
XBIZ: How will this move impact your team? How do you plan to preserve company culture?
Matsudaira: The move of our distribution center has had a very positive impact on our California headquarter team. These enhanced capabilities have brought renewed excitement and energy to us as a company. I have developed a program for success from my past leadership roles, which I feel I have implemented successfully at Pipedream. The current team believes in the much-needed culture change. Separating out our warehouse and headquarters space has given us a chance to build a new home for our headquarters staff. Our new office space is beautiful and inspiring, and my team is more excited than ever to come together to collaborate and create our future. Recently, I have been flattered to see an increase in the resumes we are receiving from people who have worked in the industry for years. It is evident that the new Pipedream has an aspirational culture that our employees are proud to embrace and talk about.
XBIZ: What effect did the pandemic have on Pipedream?
Matsudaira: We had to cease shipping as per the California state and L.A. County stay-at-home orders. The health and safety of our employees is our first priority and, with orders slowing drastically from our non-ecommerce customers, our warehouse remained closed throughout the pandemic shutdown. I am happy to say that our headquarters team was already set up to work remotely and so we were able to continue to collaborate from our homes with the offices closed. We also improved our sales team’s technical capabilities and invested in the technology we needed to support our customers virtually.
Over the past two years, I have laid the foundation that has positioned Pipedream to withstand a business disruption like the COVID-19 shutdown. We have invested in the necessary talent and systems and spent the last year improving our efficiencies and strengthening our operations. This is what enabled us to weather the storm. The disruption in the global economy did force us to compress the move to our new facility in Illinois; what was originally planned for three months was done in 30 days. My team did a fantastic job of ensuring we could begin operations in our new facility by the time COVID began to subside. To move a distribution center of our size is difficult at any time, but to do so in the middle of a pandemic, with a skeleton crew, on a compressed timeline, was truly a feat. I am so proud of what we were able to achieve and I think it speaks to how committed our team is and how united we are in our vision.
XBIZ: How will Pipedream’s presence overseas progress with its newly minted Elite Distribution partners? Discuss Pipedream’s Request for Proposal (RFP) selection process. What was your selection of distributors based on?
Matsudaira: The Elite Distribution selection was not an easy decision for us. What became clear to us was that we needed to strengthen relationships with our partners most committed to growing the Pipedream brand. Those selected will receive Pipedream’s full support to help them be successful in the European market while building our premium brand. I believe that this accelerates our focus on the European market while halting the brand degradation we have been observing in this space for years.
The selection process was a rigorous one and I know this proved challenging for both our distribution partners as well as the internal Pipedream panel evaluating the proposals. The key criteria focused on distribution partners who were committed to growing the Pipedream brand. We considered partners who were best able to show us their reach and marketing capabilities. We are not interested in relying on price compression to simply move boxes. Our Elite Distribution partners will focus on growing the Pipedream brand profitably.
XBIZ: Discuss Pipedream’s product marketing and education support for retailers. How has the company adapted to serve retailers virtually?
Matsudaira: Even before COVID, we were offering our partners an immense amount of product marketing and education support virtually. I found it time-consuming and expensive to have our distribution partners fly in their sales team to their headquarters for training, so we started having our sales team do virtual presentations. We have continued to invest in this platform to reach out to customers. During COVID, we participated in retailer events, such as Ladies Nights, and had great results and a lot of fun doing these types of promotional activities. In the near future, I believe operating in this way will protect both our employees and those of our partners.
XBIZ: How is Pipedream broadening its reach among customers? What are your mainstream aspirations?
Matsudaira: Pipedream is committed to growing our brand profitably and will continue to work with our global partners who want to be part of this journey with us. We invest in product innovation that we know will resonate with the end consumer and will continue to provide our strategic partners the opportunity to grow with us.
XBIZ: What are some of your goals for the company for the rest of the year?
Matsudaira: For the remainder of 2020, our goals don’t change much. We will drive profitable revenue by strengthening the brand through product development. We will stay focused on developing innovative and high-quality products at a great price point for our customers. We will continue to evaluate and improve our partnerships throughout the industry. I consider our talent our greatest asset and I know every member of our team is aligned on these goals. We don’t allow external factors to shift our focus and we will be successful by staying committed to our shared vision for the new Pipedream.
