BURBANK, Calif. — The Adult Novelty Manufacturers Expo (ANME) Founders Show, held in Burbank, California, on July 13-14, 2026, highlighted the increasing technological integration within the adult retail sector, particularly concerning artificial intelligence (AI) applications and the complexities of age verification compliance. The event, featuring seminars sponsored by AVN, underscored how adult novelty businesses are leveraging AI for operational efficiency and navigating a rapidly evolving regulatory landscape for age verification, mirroring broader trends in the retail industry.
The discussions at ANME align with the overarching themes observed at major retail technology conferences like Shoptalk Spring 2026 and the upcoming RetailClub AI Festival in September 2026. These events emphasize that AI is no longer a theoretical concept but an operational reality, with retailers actively seeking practical applications that drive measurable results. For adult industry platforms and operators, the adoption of AI can translate into improved workflow, enhanced customer experiences, and more robust fraud detection, while the challenges of age verification directly impact platform design, data privacy, and legal compliance.
How AI is Streamlining Adult Retail Operations
One of the ANME seminars, "Increase Your Retail Knowledge for Brick and Mortar Stores," delved into how AI tools can enhance productivity and profitability for physical adult novelty stores. Zondre Watson, General Manager of Ero-tech Technology and Analytics, illustrated AI's role as an "assistant" rather than a dystopian "Skynet." Watson, who primarily uses AI chatbots like Claude, described how AI has been instrumental in tasks such as reorganizing display shelves, analyzing profitability reports, generating purchase orders, checking store inventory, and comparing year-over-year growth. This automation frees up time for business owners to concentrate on other strategic areas, a benefit that resonates across the broader retail sector where AI is increasingly used for smart inventory and demand forecasting.
David Eliason, owner of Dick & Jane’s Naughty Spot, shared his own experiences with AI, noting its ability to produce superior marketing materials. For instance, an AI chatbot refined a billboard design for one of his South Dakota stores, optimizing it for drivers traveling at high speeds. Eliason also reported using AI to create employee schedules in "less than a minute" and redesign retail shelf signs to highlight product benefits, such as those for water-based lubricants. These applications demonstrate AI's capacity for hyper-personalization and adaptable creative content, a key trend identified at Shoptalk Spring 2026, where discussions focused on AI's ability to scale real-time personalization across channels rather than just automated media buying.
The broader retail industry is rapidly accelerating AI adoption in 2026, driven by evolving consumer behaviors, intense e-commerce competition, and supply chain disruptions. According to Stanford’s AI Index, 78% of organizations reported using AI in 2024, a significant increase from 55% the previous year. Consumers are also increasingly ready to embrace advanced AI agents, as evidenced by a 1,950% year-over-year increase in retail site traffic from chat interactions during 2024’s Cyber Monday, as reported by Adobe. For adult industry platforms, this indicates a clear path for integrating AI into customer service, product recommendations, and operational management to meet rising consumer expectations for tailored and efficient experiences.
Navigating the Complexities of Age Verification and Payments
The second ANME seminar, "AV and the Novelty Industry Legal Panel," addressed critical issues surrounding age verification, banking, payments, and associated risks. Kim Airs, AVN’s Pleasure Products Contributing Editor and moderator, highlighted that age verification, once a minor concern, has become a significant challenge due with the proliferation of state-level age verification laws. These laws extend beyond adult video content, impacting a wide range of adult novelty retailers, manufacturers, and distributors. Meghan Lyon, Free Speech Coalition Membership Director, noted that over two dozen states currently have such laws.
The implementation of age verification often requires visitors to provide government-issued identification or a selfie, raising substantial privacy concerns. Eliason stated that with such requirements, "Your privacy is virtually nonexistent." Furthermore, the language in these laws is often deliberately vague and ambiguous, designed to be broad in scope. This legislative environment presents significant technical and ethical challenges for adult industry platforms, which must implement robust age-gating mechanisms while simultaneously protecting user data and navigating legal ambiguities.
In response to these privacy concerns, Airs observed an "uptick in adult video DVD sales," suggesting that some consumers are reverting to analog formats to avoid digital age verification requirements. This trend underscores a potential market shift for platforms that can offer privacy-centric alternatives or develop age verification methods that minimize data collection. Concurrently, adult retailers face banking discrimination, with many financial institutions and payment processors classifying their businesses as "high-risk." Lucy Luna Trim, Senior Account Executive at GOAT Payments, explained that specialized payment processors like GOAT can provide alternatives for businesses rejected or "blacklisted" by mainstream banking systems, a critical service for adult industry operators.
Industry Advocacy and Solutions for Compliance
The Free Speech Coalition (FSC) is actively engaged in combating the legal obstacles faced by the adult industry. Lyon stated that the FSC, through its Sexual Wellness Professional Alliance division, is "fighting in several states to change the language of age verification laws" and advocating for the rights of adult retailers, manufacturers, distributors, and sex educators. Their efforts include discussions with leaders and legislators in Washington, D.C., to address the legal complexities within the adult space.
In a direct response to the industry's need for compliant and private age verification solutions, the Free Speech Coalition launched PrivateAV this spring. This service offers its members a private, compliant, and affordable age verification option, providing an industry-specific alternative to external services. The development of such in-house or industry-supported solutions is crucial for adult platforms seeking to maintain compliance without compromising user privacy or relying on third-party services that may not fully understand the unique challenges of the adult industry.
The discussions at ANME highlight that adult industry entrepreneurs, particularly brick-and-mortar retailers, are at the forefront of both opportunities and obstacles. Their experiences with AI adoption for workflow improvement and their struggles with age verification compliance and banking discrimination offer valuable insights for developers, engineers, and platform operators across the adult industry. As AI continues to reshape retail and regulatory pressures intensify, the adult industry must continue to innovate technologically and advocate for practical, privacy-respecting solutions.
