Letting go of what was and doubling down on what’s next.

We’re experiencing a return to normal. Does this phrase sound familiar?

The pandemic brought an unexpected boom to the direct selling industry. Many companies saw revenue increases and incredible growth. As the pandemic has eased, so too has that explosive growth. Only 18 companies made our 2023 list of companies who experienced three consecutive years of revenue growth. And overall, the industry saw the beginning of a decline in total retail sales at the end of 2022.

It would be easy to assume that these numbers reflect a natural market correction—one that doesn’t signify a decline in progress or relevancy, but rather a return to pre-pandemic levels. After all, U.S. direct selling revenues reached $40.5 billion in 2022, which is a decline from 2021, but still a sizeable increase from $35.2 billion in 2019.

The problem with this theory is that consumer spending hasn’t followed this trajectory. In July, Deloitte released its State of the U.S. Consumer report, revealing that retail sales were up 31.6 percent from pre-pandemic levels and non-store sales were up 69 percent. Consumers are buying—particularly in discretionary categories—so why aren’t direct selling revenues reflecting that boost?

As the research shows in The Future of Work: Insights into the Gig Economy Workforce, the gig economy is growing four times faster than the traditional economy. However, the number of gig workers representing direct selling has decreased from 5.2 percent to 2.3 percent. The DSEF Growth and Outlook Study shows an eight percent decline in the number of direct sellers in 2022.

At Direct Selling News, we believe the direct selling industry is in, perhaps, one of the most important Inflection Points in its entire 100+ year history. The term inflection point originated as a mathematical description depicting that moment when the curve of a graph changes direction moving up or down. A point when business leaders must proactively address the future of their brands and the relevancy they bring to market.

What we are experiencing is not a return to normal; it’s a critical moment to address the channel’s strengths and opportunities to evolve forward. A time to determine if next year’s P&L sheets will reflect a positive shift in momentum or another year of steady decline?

DSN worked closely with channel advisors, executives and analysts, compiling five strategies to help companies understand the current state of their business so they can more effectively position themselves for growth.

We must be candid and honest about where the channel has been and is. The so-called normal of 2019 doesn’t exist anymore. This is a critical moment in time where companies have two choices. Stay in a state of comfort and complacency and expect similar results. Or, let go of what was and move forward with open, innovative minds and embrace evolution to build for the future.

Ultimately, the choice is yours. But the time has come to make that choice.

1 / Dig into the Data

It’s time to take a brutally honest look at the statistics surrounding the last few years. The drastic bump that most of the industry enjoyed during 2020 and 2021 was not typical, nor does it appear to be continuing. Allowing this data set to incorrectly inform future projections and strategies prevents companies from reaching their full potential.

It is imperative that companies dig into their historical information to genuinely understand the impact the pandemic had on their most important statistics. The priority must be to look for trends that indicate future habits; identify key patterns; and discover exactly what behaviors your fields are engaging with today—successfully and perhaps not-so successfully.

2 / Avoid Being a Regulatory and Compliance Target

The channel has to work together. Clean, simple and transparent are the obvious antidotes to a tough regulatory environment, but no one company or brand can turn the tide in the industry’s favor to heal decades of reputational damage.

“We have got to make ourselves unimpeachable,” said Heather Chastain, Founder and CEO of Bridgehead Collective, a consulting firm for the direct selling industry. “You don’t have to be a bad actor in the channel to gain a bad reputation. Take a look at the transparency of your programs, incentives and compensation plans and eliminate any loopholes or obfuscation. We have to be on a mission for transparency.”

Larry Steinberg, chair of the Buchalter Law Firm’s MLM Practice Group agreed, “Now is as good a time as ever to refocus your business plan on retail sales, a robust preferred customer program and communications with your field about the importance of compliance. There is ongoing rulemaking activity in the business opportunity, earnings claim and restrictive covenant areas. Staying under the radar is becoming increasingly more difficult, and the stakes are higher than ever.”

Eliminate hidden fees. Make it simple to opt out of an auto-ship agreement. Communicate with the field about the importance of compliance. Use dollar amounts instead of points to pay commissions and achieve bonuses. Do whatever it takes to communicate that your product and opportunity can withstand a critical eye. When in doubt, choose transparency.

3 / Understand Changes in the Marketplace

Today, customers want a seamless shopping experience that is transparent from end-to-end. They want to engage with companies who deliver on their promises with little-to-no barrier to entry, frictionless experiences, minimal clicks, streamlined shopping cart processes and reward incentives that are attainable and delightful. If there are 17 hoops to jump through to get the prize, you’ve missed the point—and you’ve likely lost a loyal customer.

Zooming out a bit, digital fluency is crucial. Consumers, particularly younger generations, expect everything from first impressions to shopping, purchasing and delivery, to have a simple, yet impressive, responsive digital component. The way people buy is now staggeringly influenced by a brand’s digital footprint, even if they ultimately buy in person or in a retail environment.

Shoppers are still spending, but only where and how they want to shop. The direct selling product and customer proposition must be on point and at the same level or greater than massive online platforms like eBay and Amazon.

The growth of ecommerce is proof of the concept that people are shopping differently. The growth and use of the digital platform provides an opportunity to compete with any brand, at any time, through people who love what they are experiencing and desire to share with others what was shared with them.

Make sure your products and platform serve today’s customer in meaningful, memorable ways that will make them want to come back time and time again—and bring their friends along with them.

4 / Challenge Old Mindsets

For decades, the direct selling industry has positioned itself as a massive, team-building opportunity. Marketing messages traditionally lauded the six-figure earner, the luxury car bonus and a certain lifestyle to spark interest. Not so much today.

“Gen Z and Millennials don’t respond to that like generations before them did,” Chastain said. “They are more interested in making an extra $250 or $500 a month to supplement additional income streams and rarely have an interest in building a downline, much less lead a team.”

Chastain and her company Bridgehead Collective recently released a first-ever research study conducted with Jason Dorsey on the impact of Gen Z and Millennials on the marketplace including specific implications for direct selling.

Businesses and brands are more than their compensation plans, but it’s imperative to analyze whether the incentive and payout structures in place are truly meeting consumer and distributor demands. Take a deeper look at the touchpoints that could move customers from casual purchasers to loyal repeat buyers.

Direct selling companies should be thinking of themselves as brands first. If you still think your compensation plan is the most important way you can attract new customers and prospective independent contractors to your company, it may be time to change your mindset and the language you use to position yourself in the marketplace.

5 / Be Mindful of Chasing Trends

Identify what needle you’re trying to move and then put straightforward, clear strategies in place to deliver those results.

“Be really thoughtful about the buzzwords you use to describe your strategic decisions,” Chastain said. “Some companies are saying they are jumping on the affiliate trend, but are they really? Or are they just simplifying the front end of their compensation plans?”

Consider how your culture supports ordinary people who want to participate in your company’s unique niche and mission. Grow your customer base to boost revenue, rather than investing in a few top team-building leaders. And—above all else—cultivate a brand identity, shopping experience and product story that sparks love, loyalty and longevity in the hearts of shoppers.

Straightforward Strategies Win

There appears to be a clear direction that industry analysts and experts agree will move the channel in the right direction: streamlined, transparent operations focused on selling quality, high-value products and services.

A focus on the fundamentals of brand building means a focus on everything—not just commissions or compensation plans, but incentives, recognition, gifts—everything. If that sounds like it might dig into the bottom line, that’s because it likely will. But the payoff, Chastain says, is well worth it.

“Find profitability elsewhere,” she said. “The dated approach to compensation plan design may be costing the company too much as it attempts to be relevant in a very different marketplace. Refocus your energy on delivering quality content. Be ruthless with the products that earn a spot in your lineup. When you focus that kind of efficiency within your company, it will free up the few margin points you need to support a simple, generous combination of commissions, incentives, recognition and community for affiliates, distributors and customers.”

A lot has changed since early 2020. Smart and strategic companies aren’t focusing on what they see in the rear-view mirror. They are focused on the road ahead—what’s working today and how to build for the future.

Believing that the industry’s recent dip in overall numbers is simply a “return to normal” means buying into a strategy of a pandemic era when nothing was truly normal—not the economic landscape, not shopping habits, not everyday life.

We can all agree that there will be geopolitical challenges domestically and globally as we move forward. But in spite of those uncertainties, direct selling decision makers must look to the future based solely on current market conditions and best practices, free from outdated models, ideals and traditions.

As company leaders prepare to make strategic plans for 2024, they will have to decide if this will be the year the direct selling industry participates in an evolution that will make it more relevant and accessible for the months, years and decades to come.

From the September 2023 issue of Direct Selling News magazine.

The post The Inflection Point first appeared on Direct Selling News.

“Customer onboarding is the first major engagement after a sale is closed,” said Rocketlane CEO Srikrishnan Ganesan. “The experience delivered during the onboarding journey influences future engagements, upsells and cross-sells, and key SaaS metrics, including NRR and churn. But today it is marred with inefficiency and inconsistency. The survey brings these issues to the surface and highlights where SaaS customer onboarding needs improvement.” 

The most inefficient elements of the process appear to be an overdependence on project managers to provide status updates, a manual method of asking for customer feedback, and the usage of too many tools. In fact, onboarding teams report spending up to five to ten hours each week simply following up or sending reminders to customers, and report tracking work across an array of tools as their top distraction.  

This inefficiency is reflected in the data as well, with 54% of professionals feeling that the customer service they provide is of an average level, while 56% express that there is inadequate visibility into the work of each project. 

“The report uncovers the daily struggles of customer onboarding and implementation teams,” Srikrishnan said. “A lot can be attributed to generic project management tools, which by nature aren’t built for customer-facing projects. Leaders now have strong data points to prioritize process optimization and formulate strategies to create a 5-star experience for customers and their teams.” 

The post New Survey Reveals Customer Onboarding Trends and Challenges to Expect in 2022 first appeared on Direct Selling News.

From Pokémon and velour tracksuits to royal inspiration and fidget spinners, in between, each year’s biggest moments had shoppers searching online for their “must-haves” across millions of brands, products, gadgets and more.

In 2019, consumer shopping cart activity showed us that…

• Sneaker dominance¹ – A growing trend over the past decade, sneaker sales increased in 2019 from the previous year with Air Jordans claiming the top spot with 171% more sales than competitor brands on eBay.
• We had pearl fever¹ – With influencers flaunting their pearls on social, followers drove interest in pearl accessories. In fact, whenGigi Hadid was seen wearing a string of pearls, eBay saw a 21% uptick in sales.
• We were watching Game of Thrones¹ – With the airing of its final episode in May, show fans were shopping for GoT-themed collectibles from posters to ornaments and everything in between.
• Queen Bey ruled her Throne – Commanding a different throne, with the release of “Homecoming” and “Lion King,” all things Beyonce were trending. eBay saw a spike in Beyonce vinyl sales around the release periods for both films.
• The rise of micro bags² – Last year the fanny pack was king but this year, we witnessed a growing popularity for crossbody bags, especially in miniature size. This year the mini crossbody bags, which have seen spikes in sales as high as 65% year over year, were the number one most wanted type of handbag heading into the holidays.

Looking back to the start of the new millennium, below are some of the most popular trends that influenced our online shopping on eBay.com since 2000 to present.

• 2000 – Pokémon-mania³ – We kicked off the new millennium chasing Pikachu on a small gaming device known as GameBoy, while the Pokémon series and films were on screens everywhere! Everyone was on a quest to ‘catch ’em all,’ especially the plush versions. Almost 20 years later, Pokémon has held onto its popularity and is the second most popular trading card game sold on eBay, with rare cards sold for upwards of tens of thousands of dollars each time one of them goes on the market.
• 2001 – Please meet Xbox and iPod – In 2001, we witnessed the introduction of the first Xbox and iPod, which made these both the year’s must-have items. Today, both of these items have transformed into iterations of the originals that consumers could have only dreamed were possible.
• 2002 – Cameras go cellular – This year we saw the introduction of the Nokia cellphone camera, the first cell phone with a built-in camera. Everyone wanted to update their phone to snap instant photos. Over the past 20 years, we have seen iPhone and Android up the ante with each new phone release. While users were once excited about the sheer capability of being able to take pictures on the go, now the competition is stiffer than ever with the super-technical capabilities of mobile phone photography.
• 2003 – Velour tracksuits – In 2003 Juicy Couture was purchased by Liz Clairborne, infusing excitement into the brand’s signature velour tracksuits which became a mainstream trend, especially when Paris Hilton and Nicole Ritchie’s’ Simple Life series premiered. In fact, Paris Hilton recently was interviewed saying she still has an “entire closet that is only Juicy Couture.” The trend has already been making a comeback in recent years, and we expect this to continue in a big way into the new decade.
• 2004 – Friends said goodbye¹ – In May of this year, the popular TV series Friends bid farewell to fans when it aired its final episode. Fans snatched series merchandise as an homage to keep the series alive. This year, Friends celebrated 25 years of the beloved ‘90s TV series and eBay saw a 44% increase in Friends T-shirt sales in September, the official anniversary month.
• 2005 – Reality TV gets real – Thanks to series like Survivor and American Idol (among others), fans were glued to their screens each week to see the latest elimination. With this peek interest for reality TV, fans everywhere were looking to own a piece of their series through auction items or fan merchandise. Did you know that current reality TV queen Kim Kardashian West had her first business venture in the mid-2000s on eBay? Under the username kimsaprincess, KKW would resell designer items she had sourced from celebrity friends’ closets and would take a cut of the profit as a means to fund her own expensive wardrobe taste.
• 2006 – Tie-Dye becomes the new black – This was the year when everything we owned was taking a dip in tie-dye. Shoppers could find tie-dye apparel and accessories in just about any corner. Thirteen years later, tie-dye made another resurgence as it appeared on major SS19 runways—Prada, Proenza Schouler and Stella McCartney were three of the biggest names to capture the trends.
• 2007 – The Simpsons⁴ – With the release of The Simpsons Movie, everyone’s favorite animated series was a cultural moment that inspired everything around us, including our clothes. In the month following the July 27, 2007 release, eBay sales for The Simpsonsmerchandise spiked an impressive 217%.
• 2008 – We made bold shoe choices⁵ – In addition to going down as the year of the leggings, 2008 was a year when shoppers made UGG boots and Crocs their footwear of choice. It seemed like everyone was asking for UGGs for Christmas—sales were up 105%going into the 2008 holiday season. Crocs were most popular as a summer shoe, with 135 times more sales on eBay than the season prior.
• 2009 – Guido goes haute – With the premier of MTV’s highly popular Jersey Shore series, so came the quest for guido-inspired fashion. 2008 was a year when oversized sunglasses were in along with animal prints, airbrushed hats and graphic T-shirts.
• 2010 – The tablet is born – In 2010 we were introduced to the first iPad, thus ushering in a new era in technology for shoppers. The iPad sustained impression traction on eBay throughout its first year, peaking in December for the holidays. Today, we have seen tablets completely transform the way we use personal devices. As phone screens get bigger and tablets become sleeker, the line between the personal tech devices becomes finer. Items like the Samsung Galaxy Fold made major waves on eBay and in headlines in 2019.
• 2011 – Royal fever – In 2011 we celebrated the union between Prince William and Kate Middleton, an affair we celebrated from beginning to end of year, toasting with our favorite royal-inspired or royal-printed tea sets. Fast forward to the highly anticipated wedding of Prince Harry and Meghan Markle, where Royal Wedding fever hit eBay again with sales for fascinators and floral crowns rising 47%. Meghan captivated Americans and Brits alike as she made her procession down the aisle in a custom Givenchy gown, spiking the fashion label to the top searched list on May 19^, 2018. Today, we are equally as inspired by the royal family fashion, as seen clearly by eBay’s 300% increase in Strathberry crossbody bag sales in the past year after the Duchess of Sussex, Meghan Markle, was seen wearing the bag.
• 2012 – British takeover – On the heels of the previous year’s royal-fandom, 2012 was a year where we celebrated all things British from One Direction to 007’s Skyfall film, and in between it all, London hosted the Olympics where the Spice Girls made a special reunion that had shoppers looking for union jack-printed apparel and home decor.
• 2013 – The next generation – In 2013 we saw the newest iteration of a variety of tech and console devices including the iPhone 5S, PlayStation 4, Samsung Galaxy S4, HTC One, the iPad Air and many more. In December 2013, almost 300 Samsung Galaxy S4s were sold every hour on eBay. We’ve since seen new models come out every year and this year, the iPhone 11 Pro and iPhone XR ranked in the top two spots for eBay’s best-selling electronics.
• 2014 – Beauty influence – In 2014, Kylie Jenner launched her very popular lip kits thus igniting the age of beauty influencers and consumers quest for all the latest in lip kits/ cosmetics.
• 2015 – 3D flower mania – 2015 will be the year of eternal spring as we witnessed 3D blossoms in everything from décor to clothing. In the last 6 months of the year, eBay sales for 3D flowers rose a staggering 1115% percent!
• 2016 – Superheroes take flight⁴ – In 2016 we celebrated our favorite superheroes as we saw the release of popular films such as Deadpool, Suicide Squad, Batman, Captain America and more. It comes as no surprise that our favorite heroes and villains were the most popular costumes of the year and still today, Batman ranked in the top five trending Halloween costumes on eBay this year.
• 2017 – Fidget fever⁵ – 2017 was the year where our fingers stayed busy with fidget spinners of all varieties and colors, and when we weren’t fidgeting, our fingers were searching online for the coolest one, where one was sold every 1.5 seconds on eBay.
• 2018 – Welcome back fanny pack – The ‘80s classic had a comeback moment inspiring men, women, children and adults to turn to their favorite hands-free bag. The trend continued into this year where the Gucci Belt Bag outsold similar handbag styles by an average of 10x.

Until 2020 trends are officially upon us, shoppers can head to eBay.com to shop a wide selection of items from every era.

¹Based on searches and sales on eBay US from October 2018 to October 2019
²Based on searches and sales on eBay US from January 2004 to December 2019
³Based on searches and sales on eBay US from January 2001 to October 2019
⁴Based on searches on eBay US from July 2019 to September 2019
⁵Based on sales on eBay US from May 1 – 7, 2017

The post The Top Trends from Y2K to Now first appeared on Direct Selling News.

The dietary supplements market is primarily driven by the paradigm shift toward preventive health management practices amid rising healthcare costs and increasing burden of lifestyle diseases. Digitization in retail is expected to boost the future growth of dietary supplements. Moreover, the popularity of herbal and probiotic supplements is also expected to drive the market growth in the future.

Based on product type, the vitamin segment is steadily growing whereas the fatty acid segment represents the fastest growing supplement segment due to popularity of omega-3-based supplements. Dietary supplements, such as vitamins, minerals, botanicals, enzymes, fatty acids, and proteins, help promote general health and well-being, by preventing nutritional deficiency diseases.

The vitamin segment of the global dietary supplement market was valued at $34.39 billion in 2017 and is expected to grow at a CAGR of 6.6 percent during the forecast period. Mineral-based dietary supplement is a well-established segment of the overall nutraceutical market, owing to its longstanding tradition of use and years of clinical research.

Asia-Pacific holds the major share in the market, followed by North America and Europe. The North American dietary supplement market has high competition, with Herbalife, Amway, and Farmacias Similares SA de CV as the leading players.

The post Dietary Supplement Report: Market Expected to Grow at CAGR of 6.9% first appeared on Direct Selling News.

The market research store today released “Anti-Aging Product Market: Global Industry Analysis, Trends, Market Size and Forecasts up to 2024,” a study on the anti-aging product market that covers analysis of the leading geographies such as North America, Europe and Asia-Pacific for the period of 2016 to 2024. The report predicts that the global anti-aging product market will grow with a CAGR of 6.43 percent over the forecast period of 2018–2024.

According to the report, the demand for anti-aging products is increasing among the adults age group between 25 and 40 to hide the effect of aging caused by unhealthy lifestyles. Additionally, the rise in the geriatric population and innovations and development of safe and effective anti-ageing products are likely to drive the market in the coming years.

For more information on the report, click here.

The post Forecast for Global Anti-Ageing Product Market Is Promising first appeared on Direct Selling News.

Several trends, shaped by consumers’ evolving preferences about how they like to receive information, will continue to impact the way direct selling companies share personal development resources both to their employees and independent salesforce members in 2018:

Microlearning:

The term “microlearning” refers to learning in short bursts, or snippets, according to the way busy people learn today, and it’s most often served up on mobile devices that give us the flexibility to learn on our own schedules. Most of us don’t have time to sit down and listen to an hourlong webinar. The cumulative effect of bite-sized learning is more significant than we may realize.

Connie Tang, President and CEO of Princess House, the kitchenware and home décor company based in Taunton, Massachusetts, spends much of her life on the road commuting between her home in California and her apartment in Rhode Island near the Princess House headquarters. She uses her cross-country commute to master the art of microlearning.

“When I’m on the West Coast, I work East Coast hours. I don’t sleep a lot. But you find opportunities to learn, and it doesn’t have to be arduous or require an immense amount of time,” she says. “I read short articles or watch two-minute videos that interest me, and then it takes two seconds to share it. If it’s important to you, you allocate time.”

Multichannel:

Some people prefer learning through video, some like a phone call, others want to read from the comfort of a home office or via an app in between appointments. These days, do direct selling companies have to be everything to everyone? In a word, yes. They have to meet consultants exactly where they are.

“I think you really can be all things to all people as long as you focus on what your message is and that you keep it consistent,” says Jane Creed, president and CEO of Napa, California-based Wine Shop At Home, a direct seller of artisan wine brands. “We’ve got to give answers to a lot of people in a lot of different ways, but personally, I find that we all grow by learning how to do that.”
Tang describes her approach to personal development as “stocking the buffet. That’s my philosophy. It’s all here for the taking, you can have all of it, some of it or none of it. That’s how I believe I can model it as a leader, foster it and provide access.”

Gamification:

Some direct selling companies have incorporated gamification into personal development modules, enabling salesforce members to earn virtual badges or engage in some healthy competition on leaderboards. Gamification is a natural fit for direct selling, as the segment is based on a culture of recognition. Prizes are often secondary to that moment in the limelight and the praise that follows a job well done. When salesforce members can see in real time who’s pulling to the head of the pack, it’s a powerful motivator to pick up the pace of their own efforts. And gamification can also help rally sales force members around a common cause that ultimately benefits everyone.

Social learning:

Tools like Skype, Slack and other message boards, as well as in-house social networks, offer effective channels through which companies can push out personal development content and incite discussion and even inspire user-generated content among salesforce members. Salesforce members then become influencers.

Wine Shop At Home relies heavily on Facebook for social learning. An interesting outgrowth of serving up personal development on Facebook is the spontaneous exchange of ideas that naturally occurs among sales representatives, says Creed. “Our mantra is ‘wine is social,’ and so we do a lot of personal development right on Facebook,” she adds. “We don’t like to do a top-down approach. To me, that can sometimes be a mistake, because what you think they’re looking for they aren’t looking for—they’re looking for something different. We really listen and let them lead the way into the kinds of topics they need, and then we can step in and provide that for them.”

Personalization:

Inside and outside the direct selling channel, there seems a growing demand for personalization. One size fits all doesn’t work when it comes to personal development; after all, people start a direct selling business for various reasons and have various intentions. From a personal development standpoint, no two students are alike.

A single skill, like confidence-building, remains relevant throughout one’s entire direct selling journey, but may need to be taught multiple ways to serve a variety of audiences. More direct selling companies are developing specific learning tracks based on one’s respective level in the salesforce. Additionally, direct selling companies are investing more heavily in technology that serves up targeted content based on salesforce activity.

Virtual Reality:

Virtual reality could present opportunities to enrich personal development offerings within the direct selling segment. There are a couple of issues to be resolved first, however, including cost and accessibility, not to mention experience.

“At the end of the day, like all technology, it’s about access.” Tang says. “I think that’s going to be the challenge—the practical side of it, of how to bring it to market and bring it to the people you actually want to have it.”

Click here to order the February 2018 issue in which this article appeared.

The post Personal Development Trends to Watch first appeared on Direct Selling News.

Almost anyone can click and purchase a product online. However, consumers yearn for the personalized service and connection that is at the core of the segment’s business model. Direct selling offers “personalized selling” like no other business. This advantage is timely and important—personalization is at the forefront of pivotal communication trends in 2018.

In making the most of the personalized selling proposition at the heart of the channel, companies can take full advantage of the valuable customer and product usage information that lies with the distributors. Distributors are influencers and brand advocates or ambassadors. There is incredible value in better leveraging this resource for brand communication purposes.

The following three points are key emerging communications trends that direct selling companies can easily incorporate into their businesses to utilize distributor influence and to positively impact customer acquisition.

1. Disseminate Public-Centric Content That is Smart Content, Too

Direct selling companies have a distinct advantage in today’s online commerce world—customer acquisition has generally been the result of customers’ direct product use, which leads to product evangelism, which then results in the conversion of some customers to distributors.

When you consider the segment’s product adoption curve, the standard marketing strategy of most industries doesn’t completely apply to the direct selling channel; as it’s usually only customer-centric where the companies are trying to establish a relationship with the consumer. In direct selling, the customer-to-distributor conversion process is often due to the fact that the direct selling product user already has a strong relationship with the brand and its representatives.

To have the direct selling business model evolve to the next level and embrace the relatively new communications channels that technology now provides, direct selling companies need to also embrace a communications strategy beyond the individual customer and distributor and provide public-centric content—content that produces a positive relationship with the broader public.

This is basically the reverse of a traditional business model, which personalizes an impersonal brand. Direct selling brands are already personalized. The imperative is to take the already humanized and individualized brand and convey the organization, culture and credibility behind the brand and the distributor to the public.

Click here to order the February 2018 issue in which this article appeared.

Offer product testimonials, but be sure to add in the credibility and the science behind the product. For example (and with guidance from compliance, as appropriate), explain raw ingredient cultivation, the manufacturing process, specific ingredients that reinforce the company’s brand, mission and culture.

Be strategic in your product communications and target the product to a specific demographic, geographic area, season or age. Make that product more relevant by highlighting a key ingredient and discussing its effectiveness. Create several marketing versions, with the same message, and deliver the content via creative methods pegged to key audiences.

Look to the distributors that fit that target demographic and leverage their experiences and their distributorships. Allow this content to be used as a business tool for, and by, distributors (based on their business demographics) and as an endorsement for the company.

Much of direct selling companies’ content gems get lost amidst distributor sales and recruitment statistics. Frequently, the raw materials to deliver compelling content may not be documented or readily available for content-creation purposes. It’s very important to make this type of content accessible.

HubSpot, a marketing and sales software development company, defines smart content, as “content that is intelligently personalized (i.e., experiences that can be expanded to connect to the broader demographic) to your customer’s needs.” That is an incredibly valuable asset held by direct selling companies to be leveraged in today’s e-commerce environment.

The direct selling channel gets close to the people who use its products, who are attracted to the opportunity, and who seek out a specific cultural fit. Direct selling executives can use their company’s unique data to create compelling content for specific personas drawn to your brand proposition and use this content appropriately at the corporate level and within distributor ranks. It will take additional analysis, organization and distributor training, but it will be a valuable exercise. Smart content moves beyond content for awareness and targets potential customers, as well as potential distributors, and can have a measurable ROI.

2. Make Use of Messaging Apps and Micro-Influencers

Smart content derived from customer and distributor data also provides information that can be used for effective messaging campaigns—generated through technology as well as through communication by customers, distributors and others. From the technology side, messaging campaigns can include using sales and chat bots on Messenger that serve as more of a parallel track to email marketing.

These campaigns create an interactive and inclusive experience, such as a game around a major holiday or a secret password to a virtual product party. Such experiences serve the corporate brand and culture and relate back to the broader messaging of the company.

Micro-influencers are those people who are highly engaged on social media with a significant fan base. Many of these influencers started out as bloggers, and they now incorporate a full suite of social media channel outreach. Micro-influencers can be excellent sources for product reviews. The key is to target the correct type of influencer for your audience and product. Find these influencers via databases that provide these contacts.

Empower the micro-influencer to tell a story with your product—a weight-loss journey, achieving brighter skin, acquiring more energy and so on. Most influencers are open to discussing the message you want to send and the ways that you might want to send it. In addition, some direct selling company distributors are also micro-influencers, so there can be overlap. Many distributors who have actively built online businesses have also grown their online followers. Leverage these resources.

3. Create Integrated, Consistent, Cohesive Communications

In all walks of society and business, communication is more fragmented today than ever before. To create successful communications (and marketing) in support of a direct selling company, it is important to achieve consistency and integration. This coordinated approach should include creation, repurposing, amplification and syndication of content across a company’s digital channels.
Internally, this can translate into several teams collaborating and sharing ownership, and breaking down the walls between siloed departments. Externally, integration can be facilitated by identifying and prioritizing digital channels, learning which audiences favor which channels and understanding which messages audiences expect to hear on those channels.

For example, the language and visuals of a Twitter post differ from those used in Facebook which differs from those used in Instagram, and so forth. This process requires a coordinated effort at the corporate level to reach a broader audience that is more inclined to resonate with your message. This process also requires a training commitment to those distributors interested in growing their businesses.

The direct selling channel has a great opportunity to leverage these digital communication trends. The data already exists and does not require an initial investment in artificial intelligence. While technology allows a company to extend its reach to a broader, yet more targeted, audience, distributors also amplify that message digitally and can provide a staggering number of additional content channels.

Direct selling companies will maximize their ability to benefit from, and keep pace with, the digital landscape if they can identify the trends that offer better value propositions for their businesses and be prepared to take advantage of new technologies for greater ROI.

Bobbie Wasserman is managing director of Wave2 Alliances Inc., a corporate reputation and crisis management consultancy. She also serves as an Advisory Board Member for the Direct Selling World Alliance.

Click here to order the February 2018 issue in which this article appeared.

The post Get Out in Front of 2018 Communication Trends—Join In, Jump On first appeared on Direct Selling News.

I LOVE BEING IN THIS CHANNEL. Over the past 27 years, I feel like I’ve seen it all. And really, truly, from daily field work to taking part in growing businesses, seeing the operations and mentoring young business leaders, I can’t imagine a better script for my career. I’ve seen lives changed, confidence grow and dreams become reality. I credit this to our channel. I believe it’s the only work environment that focuses on the whole self. And we continue to sit on a vast reservoir of untapped potential.

But today I love my job for a different reason.Leading LifeVantage has given me an exciting perspective—a bird’s-eye view of where we’re headed in the years ahead. I see a few trends emerging that will propel our industry into the future if we’re prepared. On the other hand, they’ll bury us if we ignore them.

THE RISE OF SOCIAL ENTREPRENEURISM

With the advent of Uber, I can’t remember the last time I took a taxi or rented a car. On a recent family vacation, we simply used Uber to get around. Instead of booking a hotel, we used Airbnb. Both experiences were so simple—and, might I say, affordable—that I can’t believe we ever did things differently. I loved the opportunity to chat with both our driver and our host, each of whom eagerly told us how much they loved working for their respective companies.

Uber and Airbnb aren’t simply a pair of companies that have completely disrupted the status quo. Now, they’re also our competitors.

That’s right.

The landscape is shifting and the various sales channels are converging. In the very near future, our main competition won’t be the other direct selling company down the road vying for the better products and distributors. We’re competing against the entire gig economy. That’s literally everyone out there who’s looking to run their own businesses, or run a side hustle or buy into an experience rather than just a product.

My big meta question to our universe is this: Are we really in the business of direct sales anymore?

I don’t mean this rhetorically. After asking myself this question almost daily, I believe that we’re evolving into something more akin to a mix between social commerce and social entrepreneurism.

Right now we’re seeing a massive convergence of business spaces and channels. Digital and brick and mortar are becoming seamless. Because huge brands can’t hog the mic anymore, social commerce is paving the way for an entirely new way to do business. Right now it’s a race to see who can provide the best product with the best experience. In a world where anyone online can cut through the clutter with a great review or by launching a game-changing product from their garage, our old model of slow-moving direct sales isn’t going to cut it.

The good news is that social commerce is already in our DNA. If anyone knows how to share a product and create vast networks, it’s us. The question that remains, however, is how do we Uber-ize our business model? In other words, how do we integrate the technology that simplifies our approach enough to keep competing in the new gig economy? The first company that answers this wins.

HEALTH IS GETTING PERSONAL

Health and wellness companies used to dictate to their customers. They showed the science and prescribed the doses, which was totally OK because customers didn’t expect anything else.

Now more data and better technology have democratized health. People understand their bodies on an unprecedented level. Personally, I know exactly how much REM (sleep, not the band) I need every night, what my ideal heart rate looks like and how many grams of protein I should eat. I have apps for this. I have data for this.

Our customers are managing their health like their finances, and they want a degree of personalization and control over the products they buy. We have to understand that scientific research is great, and we still have to show that our products work clinically. But we also have to show people what these products mean for them as individuals.

For example, at my company, clinical studies show that our flagship product decreases oxidative stress, the imbalance between free radicals and the ability of antioxidants to neutralize them, by 40 percent in 30 days. But our customers won’t take this at face value anymore. They want to understand specifically what oxidative stress means for their own lives. They also need to be able to measure the effects in their own bodies. And most important, they have to see and feel these results. Our approach is to embrace this trend and create biohacking products and technology that allow individuals to take even more control over their health.

Each of our companies will have to identify its own approach. And the wonderful thing about our channel is that those approaches will be as varied as our companies. However, the health-activated individual is here to stay.

SIMPLICITY IS THE SECRET INGREDIENT

My Uber driver might not have realized it, but the best part of that ride (for him, at least) was that he didn’t have to find his customer. Technology pushed me to him effortlessly. He didn’t have to cold call, network, schedule a meeting or convince me.

We’re living in the middle of the gig economy where the side hustle now takes center stage. Make no mistake, we no longer hold a monopoly when it comes to attracting talented people who want to make additional income on their own terms. So we’re now tasked with competing within our own channel for market share while also competing against the Ubers of the world for the entrepreneurial spirit of millions of people.

If we’re going to win this battle, we have to simplify. And then we have to simplify some more. Looking at our channel as a whole, it’s an understatement to say that our compensation plans are complicated (sometimes you almost have to be Einstein himself to decipher the things). Our communications to the field can be slow. Finding customers can be a daily grind. As a channel, we need to embrace technology as a way to streamline everything we do. If we don’t, we’re in trouble.

If we ignore these trends, we do so at our own peril.

I believe that our channel is at a crossroads right now. We have incredible value to offer. We are very good at improving lives, creating products that work and giving thousands of people an incredible opportunity. But we must adapt or we won’t survive.

It doesn’t seem like long ago that my wife and I would drive to our local Blockbuster on a weekend and browse the aisles lined with DVDs. We all know how Blockbuster’s story ends. The company failed to see the growing trend of consumer convenience and personalization. They ignored technology. And they got Netflixed. Today, we can’t live without streaming services, so it’s easy to wonder how Blockbuster could have never seen its downfall coming.

I don’t want people to wonder the same thing about us.

Darren Jensen is the CEO of health and wellness company LifeVantage.

The post New Trends That Will Make Us or Break Us first appeared on Direct Selling News.

2017 DSN Global 100 List
DSN Makes its Global 100 Celebration an Event to Remember
Frequently Asked Questions about the Global 100 Ranking

DSN BRAVO AWARDS:

Leadership: It Works! CEO Mark Pentecost: On the Road to Legendary
Leadership: Isagenix’s Jim & Kathy Coover: Agents of Change
Growth: Jeunesse: Forging an Uncharted Path to Billion-Dollar Growth

Whether you’ve been around the block, like Amway, or you’re relatively new in town, like Total Life Changes (TLC), direct selling was a good business to be in for 2016.

Even with such pressures as a softening in China’s economy—the largest market for some of the channel’s biggest players—and increased regulatory scrutiny, about half of this year’s Global 100 companies reported higher revenue than they reported a year before. They launched products that are winning with consumers, invested heavily in technology and designed incentives that are driving distributor success. These targeted growth strategies, along with an even sharper focus on best practices, are positioning direct sellers to continue to expand footprints, broaden retail sales and create opportunities for entrepreneurs.

Controlled Growth

The Global 100 had aggregate revenue of more than $82 billion in 2016, with 10 list-makers growing by $100 million or more and 22 reporting annual revenue of $1 billion or more each.

Not everyone saw huge leaps in revenue or crossed a major financial milestone. Some companies’ sales were down—although most of those didn’t decrease by much, and analysts say reports of lower revenue among global companies can be misleading because of how the strong dollar affects exchange rates.

Other direct sellers’ numbers held steady, and many that grew did so modestly, according to Euromonitor, which analyzes the global direct selling channel. “Despite aggressive competition from internet retailing, direct selling posted moderate growth in 2016,” Euromonitor says in a recent report. “The main reason behind its resilient performance is that some consumers still prefer to try products before purchasing.”

Moderation is a good thing, says Bob Bass, Lead Strategic Insights Analyst for Amway, which held tight to its No. 1 spot even though revenue dipped slightly from $9.5 billion to $8.8 billion. Bass says he could largely attribute that decline to the changing Chinese economy—which we’ll discuss later in the story—but he believes the outlook is bright for Amway and other direct sellers, especially those that have a large overseas presence. “We are very optimistic about our strategies to recover and very optimistic for the China direct selling space,” Bass says.

Launch Time

New products were rolling out from every corner of the direct selling market in 2016. And the anecdotal evidence suggests that companies are focusing on niches within their niches, creating highly targeted versions of existing products and pursuing very specific customers.

During its 2016 International Convention, USANA Health Sciences—No. 20 on the Global 100, having hit the $1 billion mark—unveiled its InCelligence technology. Found in several USANA products, such as CellSentials, the company created InCelligence to harness the body’s ability to nourish, protect and renew itself, and it seems to be performing well. Last year, the supplements line that includes the new technology accounted for 20 percent of USANA’s overall product revenue, according to the company’s annual report.

The consumer drive to drop pounds also fueled new supplement technology. As part of the ongoing development of its 4Life Transfer Factor line, 4Life introduced 4LifeTransform Burn at the company’s annual convention in October. 4LifeTransfer Burn is meant to accelerate metabolism and double the body’s ability to burn fat, executives say, adding that they believe it will keep the company on a hot streak. “Burn will, I think, give us the momentum we need to make 2017 another record-breaking year,” Chief Marketing Officer Danny Lee told DSN last year.

Mannatech, which landed at No. 73 on the list with $180 million in revenue, also introduced a fat-loss system last year. While it declined to say what percentage of its revenue came from TruHealth sales, Director of Communications Mike Crouch said last fall that more than 20 percent of new associates had joined Mannatech by purchasing TruHealth.

At a different point on the broad products spectrum, Princess House—which grew by $25 million to $195 million in revenue and ranked No. 72 on the list—has launched cookware for younger families in its largely Hispanic customer base. Traditional Princess House product users often are cooking for large family gatherings, says Vice President of Operations Russ Whittle. “One of our best sellers is a 50-quart stockpot—the kind you usually see only at Chipotle or Qdoba.” The new ware includes smaller skillets and griddles for the family that’s just starting out. The company also has focused on expanding into other categories, such as food storage containers, one of which just won a Good Housekeeping Seal of approval and the Direct Selling Association Ethos Award for product innovation, Whittle said.

The younger consumer is the sweet spot for TLC’s newest product as well, an instant version of the company’s detox tea. Busy millennials appreciate this new stick pack, says Chief Operating Officer John Licari, because they can just pour the tea into a 12- or 20-ounce bottle of water and shake the bottle to blend the drink. No tea bag to steep.

Launching in new geographic markets also gives these direct selling companies potential for a substantial return. Even the smaller companies such as TLC—which is up six spots on the list to No. 94, with $88 million in revenue—are interested in international expansion. They opened offices in Japan, Taiwan and the Philippines in 2016. Additionally, in December, Mannatech announced that it had launched a cross-border e-commerce model in China. Princess House increased its penetration here at home into the Southeast, the Pacific Northwest and Northern California. Whittle says international expansion is a possibility, but “we realize we have a lot more opportunity here in the United States, and that’s where our current focus is.”

High-Tech Low-Tech Balance

The technology that supports the sales of all these new products and growing salesforces got a boost last year, as well. On-demand, easily accessible training is no longer optional for companies who want to gain or keep a competetive advantage; it’s a critical part of any successful consultant-support program. New software at TLC guides incoming distributors through mandatory online training videos to make sure they’re aware of crucial compliance issues, says CEO Jack Fallon. Tech-savvy USANA also sees continuing value in investing in IT, having ramped up its investment in its technology infrastructure over the last year, says CEO Kevin Guest. “Technology is one of our greatest opportunity areas. The world today is in everyone’s pocket on their phones.”

USANA focused in particular on building its WeChat presence in China, the platform through which nearly all of China’s e-commerce and social media traffic flow, according to Bloomberg.com. On average, Chinese internet users spend more than one-third of their online time in WeChat. “It’s literally how many people in China function from a mobile perspective,” Guest says.

While technology continues to aid and transform direct selling—making expansion and growth exponentially easier and faster—company executives are still talking about the importance of maintaining face-to-face connections in an increasingly virtual business. Simply put, technology can never replace the personal nature of the consultant-to-customer relationships and its benefits.

“A lot of direct selling companies who want a high-tech approach also want to keep the high-touch activities so they don’t lose that personal relationship selling model that is traditional,” says Amway’s Bass about the online-to-offline (OTO) trend. “Buyers can be much more loyal to the direct sellers that offer social media and OTO opportunities.”

Incentive Programs

Product innovation and a blend of high-tech and traditional sales methods are fundamental to the modern direct seller’s success. So are strong leaders in the field. Without them, a company cannot be competitive.

And while most successful entrepreneurs are self-driven, they also are highly motivated by incentives. So direct selling companies continue to create programs that increase the engagement and performance of their field teams as well as draw new retail customers.

4Life has created a weight loss contest in which participants use a pack of products for a month and share before-and-after pictures to illustrate their transformations. “In the United States, challenging people with the opportunity to lose weight through friendly competition has proven really successful for us in getting them to use and share the products,” says Calvin Jolley, VP of Communications, indicating that most of the company’s recent growth coincides with the positive effects of the challenge.

USANA has had success with targeted promotions, as well, Guest says. Short-term regional and marketing-specific incentives like travel rewards for the Filipino salesforce, for example, have gained a lot of traction. “Most people in the Philippines don’t have the opportunity to travel,” he says. “If they have the ability, through their productivity and their growth, to see parts of the world they’ve never had the opportunity to see, that’s a great incentive.”

Sometimes it’s about simple math. Customers are often motivated to hold parties for host rewards of products they desire, but for which they don’t want to pay full price. At Princess House, the incentive emphasis has been on giving a major product discount to a party host who hits a certain sales target. “If you can get a $500 retail item for $99 for getting a $750 show, you’re going to work a little harder,” Whittle says.

China Whirl

As analysts have said, the steady but less rapid growth—and for some, the slight decline—among global direct sellers is due primarily to shifts in the Chinese economy and to the strong dollar in general.

Let’s start with the dollar exchange rate, which affects how U.S. companies record revenue and profit generated in other countries. On average in 2016, the dollar was up against most currencies, except the euro and the yen. In China, the exchange rate was 6.91 yuan for every dollar; in India, the average rate was 70 rupees for every dollar; and in Japan, US$1 would exchange for 113 yen. For U.S.-based companies that do a majority of their business overseas, their earnings can look less robust when the dollar is strong compared with the currency in a particular country. The money those companies make in that foreign currency doesn’t translate to as many dollars as it would if its local currency exchange rate were equal to or stronger than the dollar.

For example, Nu Skin’s local currency growth rate for sales in China in 2016 was 14 percent, says Doug Lane, a securities analyst who specializes in direct selling companies. But the skin products company reported dollar growth in sales of only 8 percent because of the depreciation of the yuan against the dollar. Simply put, it’s important to consider the exchange rates when evaluating the strength of a U.S. company that conducts a significant amount of commerce in countries with weaker currencies, Lane says. Failing to do so can create a false negative impression of a company’s overall performance.

The overall Chinese economy has also had an effect on a number of companies who do business there. Bass says that direct sellers are going to have to adjust to a new reality in China. The channel’s growth this year in China could be in the -5 percent to +5 percent range. As of press time, no one really knows yet. The only sure thing is that this critical market for many direct sellers is changing—partly because the Chinese government has slowed the rate at which it grants licenses to direct sellers. Bass doesn’t expect the government to double the number of licenses over the next two years, as it did from 2014 to 2016, when the number went from 40 to 80. The other change is coming from a declining gross domestic product, he says. According to the International Monetary Fund, China’s GDP was about 6.7 percent at the end of 2016, down from the 7.5 percent range in 2013. Bass says some projections have the GDP falling to as low as 5.9 percent by 2020. “That is a drastic decline from an economy that still has a large and rapidly growing middle class.”

These pullbacks along with China’s notoriously tough rules for network marketers aren’t causing panic; they’re just reminding direct sales executives that they must continue to be diligent about their Chinese operations.

Nu Skin notes in its 2016 annual report that it’s still feeling the effects of a crackdown on its practices in China in 2014. “Our business in mainland China still has not fully recovered from these events,” the report states. “The regulatory environment in mainland China is particularly complex and continues to evolve.”

As the Chinese economy loses some steam, the government is turning inward, analysts say, encouraging its citizens to buy indigenous products. Lane says this “Buy China” message likely will affect mass marketers more than it will hurt direct sellers. “A lot of direct sellers tend to offer premium products,” he says. “When you get into the prestige markets, that consumer is looking for a U.S. product or a Japanese product, an upscale brand with the cachet of originating from a sophisticated overseas source. There’s a huge opportunity with an emerging middle class with disposable income going up, a market that’s a natural fit for direct selling culturally.”

Frank Jiang, who leads Amway’s global China sales team, agrees that direct sellers should stay positive about their position in and prospects for China and should commit to “continuing their best practices of corporate citizenship.” Direct sellers also need to keep an eye out for competitors who may not share that commitment, he continues. “There’s always the potential for newly licensed companies to want to accelerate their growth trajectory and that can often lead to bad practices. We’re all in this together, and we need to watch for bad actors.”

USANA’s Guest understands that while the direct selling channel in China has grown dramatically, it’s still “a new frontier” in many ways, and companies need to be diligent. “We want to be a good corporate citizen in China,” he says. “We want to understand what the regulatory environment is and what they’re trying to accomplish, and how we can support the future of direct sales in China.”

Guest says that while USANA certainly “feels pressure from an exchange rate perspective,” the company believes its future in China is clear because of how strongly its health-supporting products are resonating with a population increasingly in tune with the need to combat environmental stressors.

Top Companies Per Region

Asia/Asia Pacific 40
1. Infinitus, Malaysia $3.41B
2. Perfect, China $3.06B
3. Quanjian, China $2.89B
4. JoyMain, China $1.49B
5. New Era, China $1.16B

Europe/Africa 9
1. Avon, UK $5.70B
2. Vorwerk, Germany $4.2B
3. Oriflame, Switzerland $1.40B
4. Telecom Plus, UK $1.12B
5. PM International, Germany $460M

North America 46
1. Amway, USA $8.80B
2. Herbalife, USA $4.50B
3. Mary Kay, USA $3.50B
4. Tupperware, USA $2.210B
5. Nu Skin, USA $2.208B
6. Primerica, USA $1.52B
7. Jeunesse, USA $1.41B
8. Ambit Energy, USA $1.20B
9. USANA, USA $1.01B
10. Young Living, USA $1.00B

South America 5
1. Natura, Brazil $2.26B
2. Belcorp, Peru $1.09B
3. Yanbal, Peru $924.0M
4. Marketing Personal, Colombia $153M
5. FuXion Biotech, Peru $116M

Practices Make Perfect

Compliance issues in direct selling are on the front burner in the United States, too. In 2016, two high-profile Federal Trade Commission settlements—with Vemma and Herbalife—heightened companies’ awareness of the need to self-regulate to make sure potential income claims are honest and transparent, to have a robust retail customer base, and to ensure that the majority of distributors’ volume comes from customers outside the compensation plan.Guest says direct selling tends to attract high-achievers, and sometimes the way they describe their success can inadvertently cause problems. “You see people who are not trying to be deceptive; they’re honestly not trying to say anything other than, ‘This is what I did!’ ” But if a particular distributor’s success is not the norm, a potential salesperson may misunderstand unless the company clarifies what the average person can expect.

He adds, “When someone enrolls in USANA we talk about proper income claims and about how to run their personal business within the constraints of the law.” At Princess House, the company’s “Success Start” program helps new consultants understand how much work it will take to achieve a particular level of success. Clarity on this issue is paramount in today’s regulatory climate. When a company strengthens the new person’s grasp of the work involved, both parties benefit. Whittle says. “If [a consultant] wants her business as a passive income, she’ll earn less” than if she is actively working it.

As we round the mid-year point of 2017, the outlook for this channel is promising, and we anticipate another year of success for direct selling worldwide. Our channel remains the single best entrepreneurial opportunity for anyone, from any walk of life, to improve their circumstances. We look forward to reporting the 2018 Global 100 List!

The post Building Strategy for Future Growth first appeared on Direct Selling News.