Social Selling enters a new phase

Small business owner smiling while turning the sign for the reopening of the place after the quarantine due to covid-19.

The social selling channel has seen tremendous growth during the COVID-19 period. Arrival of the coronavirus brought abrupt changes to every aspect of Americans’ daily lives. As we noted in early posts, the changed brought about by the pandemic last year drove a renaissance in social selling. Companies across the channel who had maintained supply chain agility and deployed modern information technology saw their recruiting and sales race at growth rates not seen in decades.

In the last week, changes in COVID-19 health practices in the United States have kicked off the next chapter of this story for social sellers. The CDC made an unexpected announcement on May 13th that has changed everything. The CDC now says that two weeks after completing a full regimen of covid-19 vaccination doses (usually two, but just one for the Johnson & Johnson vaccine), people no longer need to wear masks. They concluded that vaccinated individuals could not carry or transmit COVID-19, setting aside one of the great worries that had kept everyone masked up and social distanced. https://www.economist.com/graphic-detail/2021/05/17/americas-cdc-abruptly-changes-its-e-on-face-masks

Social Sellers are now going to see conditions we have not dealt with in months. Consumers who had been building up savings at a record rate, can now freely shop and travel for the first time in more than a year. People who have been isolated by social distancing rules can now gather and do things together for the first time since March 2020. Sports venues, concert halls, and theaters are preparing to open at full capacity in most states. Pent-up demand for social interaction and travel will drive explosive growth in entertainment expenditures and leisure travel over the summer months.

What does all this mean for social sellers? It’s going to be harder to engage those new representatives that enter the business, as they will be distracted by many other things as society reopens. Customers order size is likely to go down and reorder rates will likely fall as consumers spend lavishly on travel and experiences that just weren’t available over the last year. Inflation will push upward, making the necessities they buy each month more expensive.

We’ve already seen signs that we’re moving into the next chapter in the U.S. economy. Online sales growth rates have fallen to their lowest levels since the start of the pandemic. Leisure travel in the U.S. is already racing, with airlines running at their highest capacity since the start of the pandemic. Social sellers need to move now to sustain their summer growth and carry it into the holiday season. Trip incentives are a hot ticket now, and you’ll see fabulous trips with qualification rules designed to sustain recruiting and sales levels announced over the next few weeks. The best ways to prospect for new recruits are shifting right now, and you’ll see training and corporate money flowing to support in-person events. Multi-channel initiatives are in vogue, and you’ll see social sellers kicking off a record number of online and retail partnerships.

The heady growth enjoyed by the social selling channel in the United States is waning, and companies in the industry are going to have to work hard to maintain strong growth through the end of 2021.

Record growth in social selling is resulting in hundreds of new company launches

Every year, our firm completes the most comprehensive benchmarking of field salesforce behavior in the direct selling industry.  The 2020 results are in, and the numbers verify that last year was the best year our direct selling clients have seen since the turn of the century.  The explosion of growth that started in late April and continued through a remarkably strong summer is turning into a record-breaking number of new social selling companies that will launch this year.

The mainstream media does not particularly care for social selling, but last fall everyone was talking about the changing U.S. economy.  Amazon was winning, retail was struggling, and eCommerce companies continued to face issues with the cost of customer acquisition and disappointing reorder rates.  Even the Harvard Business Journal was raising questions about sales channel strategy – https://hbr.org/2020/09/do-you-have-the-right-sales-channels-for-a-downturn

This environment is giving rise to the most significant number of new social selling companies I have seen in my 37 years in the industry.  If you’ve ever thought of having a social selling salesforce, this seems to be the time to jump into the channel.  While we only work with 3-5 startups at a time, I’ve averaged more than a dozen calls a week since October talking with people who want to enter the channel.  The exceptional growth in social selling during 2020, coupled with the continuing challenges in both retail and eCommerce, have created a gold rush in social selling.

I am amazed at the breadth of new entrants we’ll see enter the social selling channel this year.  Growth in the direct selling space will include many new opportunities created by large consumer products manufacturers already selling through other channels.  Dozens will enter the U.S. social selling channel this year, selling skin care, nutritional supplements, personal care technology, home products, food, and wine.  Existing service companies are also preparing to launch new social selling opportunities in travel, energy, and financial services.   It is refreshing to see the social channel move from an era which had been dominated by wave after wave of companies with the next great CBD product to a period of expansive growth in a wide range of product categories.

We are working on three spring launches right now, but we’re always looking for the next client whose idea has a high likelihood of success.  We’ve worked across virtually all product and service categories.  Our experience includes helping completely new ventures succeed as direct selling companies and guiding existing consumer products companies as they enter this channel.  We know what a successful launch looks like, which is probably why we’ve had only two failed launches in the last 12 years.  If you think 2021 might be the year your company steps into the social selling space, reach out and talk with us.  There may never be a better year to launch a direct selling company in the United States.

Social Sellers leverage home delivery experience to further increase holiday sales

This has been a great year for direct selling companies, and as we enter December we’re seeing social sellers getting another sales boost due to one of the industry’s traditional strengths. 

Personal home delivery during the holidays is shaping up as the next revenue booster for the channel. Shipping costs are up everywhere, and many ecommerce sites have had to post price increases to offset the increased delivery charges. Amazon Prime is no longer free two-day shipping – in parts of the country it can often take 3-5 days to get a Prime shipment.    A record number of deliveries will be late this year, and just today UPS has put shipping limits in place for major ecommerce companies –  https://www.wsj.com/articles/ups-slaps-shipping-limits-on-gap-nike-to-manage-e-commerce-surge-11606926669

Direct sellers have made home deliveries for decades, and now that strength is brightening the holiday season for their customers.  Many social sellers have customer orders shipped in a bulk shipment to their home.  They then package (and often gift wrap) these shipments before hand-delivering them to the front door of their customer’s homes.  Our distributor surveys are finding more social sellers than ever are grouping customer orders, and then shipping the combined shipment to their home via an expedited shipping method.  Personal hand delivery, often the same or next day, creates an exceptional customer experience.

This holiday season as online merchants and retailers are struggling to deliver a great customer experience, consumers are delighted by the personal service of social sellers.  We continue to see this channel posting a record holiday season, and we think the great customer feedback we’re seeing now bodes well for the channel during the challenging winter ahead.

Americans flock to social selling as second coronavirus wave arrives

We regularly benchmark the direct selling industry. This spring, as coronavirus arrived, we began doing increased research into industry trends. Our interaction with consumers during the early months of the pandemic taught us a lot about why so many more consumers were buying from social sellers. We also learned a lot about why people were joining direct selling companies in record numbers.

The second wave of COVID-19 cases has hit much of the country over the past two weeks, and we are seeing the start of another wave of people becoming social sellers. Recent research provides some interesting insights into why the direct selling industry is surging as the next wave of coronavirus cases has hit.

Direct selling is the established work from home business model. Since David McConnell launched the forerunner of Avon more than 100 years ago, the direct selling channel has been developing and enhancing opportunities to work from home. For decades, companies in this channel have offered representatives the freedom to choose when, where, and how they work. Opportunities in what has become a broader social selling channel blossomed as social media emerged and fast, reliable home delivery reached all areas of the country.

Over the past two weeks, we have found that many individuals engaged in social selling have ramped up their personal businesses. New distributors have once again flocked to direct selling companies that align with their interests and passions. People tell us that working their social selling business is the one thing they can control right now, when everything else seems uncertain. They can work as much as they like, and earn what they need as they have faced layoffs, furloughs, and salary cuts in their “day jobs.” The ability to control their destiny seems to be an overwhelming driver of social selling activity right now. Unlike other gig economy side-hustles like Lyft and Uber, non-one is going to terminate you from your social selling “job” because you failed to pick up enough customers yesterday. No major social selling company imposes fixed sales quotas or sales minimums. Management is not going to announce a 20% reduction to your pay tomorrow – social selling companies have time-tested compensation plans that rarely see major changes.

Social selling companies have work from home models that were seemingly built for times like these. Reliable income from a personal business, where you are in control. Many people we talked to are working through their anxiety about the state of coronavirus – and the state of the country – by putting their energy into their social selling businesses. With uncertainty the new norm and the holidays approaching, the number of new social sellers is going to once again grow dramatically.

It will be a big holiday season for social selling

This has been a challenging year for almost everyone, but there is some good news ahead for the direct selling channel. Several factors have aligned, and we expect social sellers to have their best holiday season since we started benchmarking industry performance in 2009.

The number of social sellers in the direct selling channel is up significantly this year as people have been furloughed or seen their hours or salary reduced.

Government-imposed restrictions earlier this year related to the coronavirus pandemic closed many retailers or restricted consumers’ access to their stores. Now, as most have reopened, cuts in staffing and issues with inventory availability have significantly diminished the customer experience.

eCommerce channels have seen a jump in growth this year, and this spike in volume has frequently created product availability or service issues. Delivery commitments were more frequently not met. Product quality issues were harder to address. Consumers rediscovered the value of dealing with a person on the other end of a transaction.

We have benchmarked the direct selling industry for more than a decade, and we are already seeing signs that this will be a record holiday season for social sellers. Anecdotally, some clients have already sold out of their holiday product presale offers to their distributors.

A strong holiday season may very well give millions of social sellers a reason to celebrate.

Distinctly Regional Social Selling Trends Develop in 2020

Several companies have asked us why we chose a map as the primary image when we announced our annual benchmarking study this week. There’s a simple answer – this year, for the first time in more than a decade, we’ve seen distinctly regional trends develop in the behavior of direct sellers.

The year 2020 is unlike any previous year in modern times, and the arrival of the novel coronavirus dramatically altered the behavior of U.S. consumers. The behavior of direct sellers has also changed significantly. For the first time since we began benchmarking in 2009, there are major differences in the behavior of consumers and distributors based on where they are located.

We dropped regional analysis charts from our benchmarking reports in 2014 because they just weren’t interesting. Direct sellers and their customers behaved in a very similar fashion around the U.S. The impact of COVID-19 has suddenly generated interesting differences in behavior in different regions of the country. It’s not surprising, given the wide range of state and local rules and regulations that have been issued this year. COVID-19 has impacted different areas of the country in quite different ways, and peoples’ daily activities and attitudes about engaging in various social settings vary significantly. In some areas, K-12 schools have been in session for nearly two months, high school sports are being played with spectators, and restaurants are fully open to serve customers in their dining rooms. In other areas, sometimes nearby, K-12 schools are open for remote learning only, all public gatherings > 10 are prohibited, and restaurants are serving take-out orders only.

COVID-19 has impacted different local and regional areas quite differently, and this year’s benchmarking study will analyze the data and report on geographic differences in the behavior of social sellers and their customers.

Learn more about our 2020 Field Salesforce and Customer Benchmarking study at https://hepferassociates.wordpress.com/2020/09/29/2020-salesforce-and-customer-benchmarking-study-moved-up-to-help-clients-understand-new-trends/

2020 Field Salesforce and Customer Benchmarking Study launches in October to help clients understand developing trends

Each year since 2009, Hepfer & Associates has conducted its annual U.S. Field Salesforce and Customer Behavior Benchmarking study. This study has always been based on analysis of raw data from participating companies – not answers to survey questions – and it provides the only accurate, data-based assessment available to North American direct selling companies.  Our database contains historical information on the behavior of millions of U.S. Distributors and their customers.
 
We have changed the timing and scope of our annual benchmarking study to respond to the challenges direct selling companies are facing as they try to understand the new trendlines of a world dealing with the COVID-19 pandemic. 

We will produce two sets of reports as part of our 2020 study:
·  During October we will be enrolling companies for our 2020 study, and in late October we will begin to report on industry activity and monthly trends from the first nine months of this year. 
·  We will offer all study participants the opportunity to submit 4th quarter 2020 data in January, and we will produce updated 2020 reports in early February
 
We have simplified the fee structure for this study, with companies paying a fixed fee based on their annual U.S. revenues.
·        $1 – $49 million                $2,500
·        $50 – $99 million             $5,000
·       $100 – $999 million       $10,000
·        > $1 billion                       $20,000
 
Click here to have us contact you about our 2020 Field Salesforce and Customer Behavior Benchmarking: https://airtable.com/shrhJ3ubTcRva0ZgP
 
Our annual studies have always profiled the behaviors of a company’s salesforce and customer base, but this year we will dig into the trends that have developed in specific areas of the United States.  New this year, we will look at distributor and customer activity trends in U.S. Megaregions, as defined by the Center for Quality Growth and Regional Development at the Georgia Institute of Technology.  We will also analyze sales and sponsoring trends by U.S. Metropolitan and Micropolitan Statistical Areas, as defined by the U.S. Census Bureau.   

The 2020 Benchmarking study will include analysis of distributor purchasing, selling, and sponsoring. It will look at trends in customer basket size and order frequency.
 
Over the past eleven years, we have developed standardized models for analyzing distributor and customer activation and engagement. Using those models, we will assess and report on trends in distributor and customer activation and engagement levels.  
 
Click here to have us contact you about our 2020 Field Salesforce and Customer Behavior Benchmarking: https://airtable.com/shrhJ3ubTcRva0ZgP
 
Answers to some common questions:
How will you safeguard my company’s data?
Participating companies will be asked to provide a CSV file with basic transaction information for each month from January, 2020 through September 2020 and a CSV file with basic distributor/customer information.  We collect no names, street addresses, email addresses, phone numbers, or other personally identifiable data.  All files are provided via FTP or a secure Dropbox.  All data is moved offline once received by Hepfer & Associates.

How will you protect my company’s identity?
No data requested will contain any personally identifiable information, providing zero risk that any specific information about your representatives might be compromised.  Your company will receive a participant number, and all data being processed on our systems will refer to companies only by participant number.  Only two people will have access to the company/participant number cross-reference table:  Amanda Bowerman, our benchmarking study manager, and Doug Hepfer, President of Hepfer & Associates.
 
 
 

Direct Selling Just Finished a Record Quarter – Now Comes the Real Challenge

Business people greeting during COVID-19 pandemic, elbow bump

In early April, we were among the first to call out the renaissance coming in the direct selling industry.  In the three months ending June 30, companies across the industry validated that prediction.  The second quarter of 2020 was among the best quarters the industry has seen in the last 40 years.  The combination of factors we call out the first week of April (https://hepferassociates.wordpress.com/2020/04/19/a-renaissance-is-underway-in-the-direct-selling-industry/) drove strong growth for almost all direct sellers.  Recruiting raced – one of our larger clients brought on more new distributors in May than they did in all of 2019.  Preferred customer ranks swelled – and autoship subscriptions grew dramatically.  Even June, one of the traditionally slow “J” months saw many of our clients post growth of more than 50% over the prior year.  We just saw a great quarter – but now comes the challenge.

Companies in the direct selling channel need to double down on their focus in three areas if they are going to put up a strong second half of 2020.

Focus area 1: Contribution Margin after Commissions (CMAC),  This is always the most important measure of success.  Growth without profitability is hollow – and we have helped several clients increase their CMAC percentage as they managed the rapid growth of the last quarter.  There is great opportunity in this renaissance period, and now is the time to realign selling prices, preferred customer fees and benefits, product mix and cost, and base and supplemental commission payouts to make sure you deliver strong CMAC in the second half of 2020 and in 2021.

Focus area 2: Operational Agility.  The only thing certain about the coming 18 months is that things will change regularly.  You need to look strategically at your operations and make decisions now that will accommodate the range of outside factors that will likely impact your ability to serve your distributors and their customers.  As the world adapts to living with COVID-19, supply chains will be disrupted.  In many cases, raw material availability has already become an issue.  Some suppliers will not survive the current challenges and will close.  Delivery services will impose volume limits and additional COVID-19 surcharges as we approach the holidays.  Employees will work from a variety of locations.  Online meetings will continue to be important, but in-person meetings and incentive trips will come back onto the calendar – with a variety of precautions and restrictions.  Customers have been forgiving of service issues in the early months of the coronavirus pandemic, but their patience is already coming to an end.  We have helped clients examine their operational processes and cost structure to identify risks and opportunities.  Our experience with organizing for growth includes work with almost every size company, from small, single location organizations to the largest of direct sellers.

Focus area 3: Technology.  Technology has been one of the real areas that differentiated direct selling companies over the last three months.  Some companies were just better prepared to register, train, develop, and support their distributors and their customers online.  Now is the time to deal with your tech debt and implement systems that will allow you to lead as we continue through this renaissance period.  We have helped clients develop online recruiting tools which doubled the number of interested people who registered as distributors after visiting the company’s “Join Us” site.  We have helped clients deploy highly personalized email and text interaction with preferred customers that increased order size, increased order frequency, and added months to average customer lifetime.  

Almost every direct seller has had a great second quarter – but now comes the real challenge.  Recruiting cannot remain this strong for the balance of the year.  The forces which drove growth in the most recent quarter will shift, and a company’s ability to develop and retain both distributors and customers will now be critical.  Retail will not recover before the holidays, and the eCommerce channel will present increasing opportunities to companies with a strong direct selling base.  Focus now on strengthening your CMAC percentage, adapt your operational processes to allow for greater agility, and accelerate systems work that will support increased growth this fall and into 2021.

#directselling #mlm #networkmarketing #omnichannel #COVID-19 #coronavirus

 

U.S. Direct Selling companies added millions of customers and distributors in April – but can they keep them?

Mousehole Cornwall England UK

Last month we made the call that the direct selling industry was entering a Renaissance period. April results are in and the industry has indeed seen a tremendous burst of growth. Our clients, collectively, have seen the best month since the turn of the century.  While this explosive growth has not been universal, it is certainly widespread across the direct selling space. Not every company has participated equally in this renaissance, and those that have not should ask themselves what they could do right now to take part in this period of growth for the industry.

For direct selling companies enjoying a period of renewed growth during this Renaissance period, it’s becoming clear that this will be a marathon and not a sprint.  U.S. direct selling companies added millions of customers and distributors in April, and direct selling has entered a new era. We know very little about coronavirus, but we do know that it will cause an extended period of disruption in our society.  This disruption will work in favor of companies that can support the personal selling efforts of independent representatives with an excellent online shopping experience and outstanding customer service.  The coronavirus pandemic will radically alter the face of retail stores in the U.S., and as we begin to see a recovery there will be excellent opportunities for direct sellers to build their brands and market share through partnerships with existing retail stores and, potentially, a limited retail footprint of their own.

Direct sellers, as an industry, have historically had trouble balancing direct to company consumers, sales at retail outlets, and the relationship with their direct selling representatives.  eCommerce efforts typically incur a high cost of acquisition for customers with limited interest in loyalty, while breeding distrust between a direct selling company and its independent representatives.  Flash sales and consumer promotions aimed at driving eCommerce volume generate one-time sales volume, but often hurt the value of a company’s preferred customer programs and their distributors’ businesses.  Retail partnerships have often resulted in a deterioration of the company’s relationship with their direct sellers, while producing disappointing revenue gains.

Having worked with direct sellers for nearly three decades, we have learned that the secret to success across multiple channels is to subscribe to the idea that A Rising Tide Lifts all Boats.  The photo at the top of this blog post is from a small village on the south coast of England where I enjoyed spending time before coronavirus brought international travel to a standstill.  It was so peaceful to sit there on the shore, watching the tide come in and float all the boats that had been laying on the sand.  The same simple principal applies to growing omni-channel businesses – build your strategies and manage your execution so that the rising tide lifts business in each channel.

Many people believe that business in e-commerce, retail, and direct selling channels can all be managed independently. We have found that this is not true.  Retail, eCommerce, and direct selling are really boats on the same stormy sea.  Consumer don’t care what “channel“ they are buying through, and direct selling companies need to be aware of the power of driving a rising tide.  We have helped clients drive retail sales through their own outlet stores and through initiatives with retailers ranging from regional specialty stores to Walgreens to Target, while generating increased recruiting and strengthening the business opportunity for their independent distributors. We have helped clients forge relationships with subscription box services and eCommerce companies to build their brand, sell to each other’s customer lists, and generate online product sales – while using the revenues and other benefits from these partnerships to enhance the experience and earnings of their direct sellers.  We have helped clients implement highly successful preferred customer programs that build customer loyalty and purchasing across multiple channels.   Millions of direct U.S. consumers are members of preferred customer programs we have helped design, and each of those programs is unique, tailored to the products and culture of the direct selling company that sponsors them.

Direct selling is one of the most successful long-term work from home industries.  The Renaissance has begun, and the direct selling channel will continue to see strong growth for the foreseeable future.  Companies that consciously build omni-channel strategies that provide a rising tide to lift business across all channels will be the winners in this Renaissance period.  The will keep and build on the growing base of consumers and distributors that join their company during this period.  eCommerce, or direct to consumer, is substantially stronger when supported by an army of direct sellers sharing products they love and believe in.  A selective retail strategy can strengthen a company’s direct selling base and their eCommerce initiatives.

It’s always better to make strategic changes from a position of strength and now is the time to chart a course for the next two years. Direct sellers should develop strategies that can drive a rising tide for their business.  They should manage the growth in their online and direct selling channels now, and be ready to execute on solid retail plans later this year.

We have helped direct selling companies build and implement growth strategies, supply chain solutions, and information technology in more than 25 countries.  We have helped some of the largest direct selling companies in the word build strategies and align their investments to drive billions of dollars in growth.  We also work with start-ups every year, and our strongest start-up clients have grown to achieve more than $300 million in sustainable annual sales by their 5th year.  For more information on how our firm can help your company drive a rising tide, contact Doug Hepfer (dhepfer@hepferassociates.com)

A Renaissance is underway in the Direct Selling Industry

Raphael, School of Athens

The rapid spread of COVID-19 in the United States has pulled our society into a unique cycle.  Things have evolved rapidly, and we have been working with our clients to understand and adapt to the unprecedented rate of change in the marketplace.  We started research calls more than a month ago, and our weekly research still includes hundreds of calls and electronic exchanges with consumers and distributors across the country.  This extensive research had given us some unique insights into how things are developing in the U.S. marketplace.

Two months ago, life was moving along as normal in all 50 states.  The first coronavirus death in the United States was reported on February 29 in Washington state.  Soon after that, the first states began to restrict public gatherings and suggest that people begin to practice some social distancing.  Within two weeks of the outbreak in Washington state, other states around the country began to close schools and issue Stay At Home orders.  Today, residents in 45 states under a Stay at Home order.

Our conversations with people around the country have been timely in helping us understand the current social environment and how people are reacting to the situation.  Schools are closed in 42 states as of today, with more than half of those states already announcing they will be closed through the end of the school year. More than five million people filed for unemployment benefits in the US last week, bringing the total number of unemployed in the U.S. to more than 22 million.  The unemployment rate in the U.S. has already reached the highest level since 1933, and the massive upheaval in our economy has brought fear and uncertainty to many Americans.

Amidst this massive upheaval, the Direct Selling industry is seeing the start of a renaissance.

  • A rapidly growing number of Americans need a source of income.  Some need to replace the income from a job they have been laid off from, and many of these people have no good idea when they will be recalled to their primary job.  Many who are still employed have seen reductions in their hours or salary – again without any good idea as to when those hours or dollars may be restored.  Our nation’s use of social distancing to slow the spread of COVID-19 has created great uncertainty for almost all businesses and their employees.
  • Consumers have been cut off from the retail locations where they normally buy certain products.  Consumers under Stay at Home orders are being urged to limit shopping trips to the purchase of essential items, which is limiting their product choices to what they see in the grocery store.  In addition, all non-essential stores and service locations are closed in more than half the states – including stores selling personal care products as well as salons, nail shops, day spas, gyms, and yoga studios.
  • Social Media activity and personal electronic communication are up dramatically.  People who are stuck at home are talking to each other – live and through social media.  An Instagram influencer group has reported 75% increases in accumulated likes on Instagram posts they monitor.  Time spent on Facebook has soared by more than 70% in areas that are socially distancing.  Facebook messaging is up more than 50%, and video messaging has more than doubled.  People are connecting with others in their networks on a more frequent and more personal level than at any time in the past.

What this means for direct selling companies:

  • We are the established work-from home industry, and we have the products, compensation structure, training, and infrastructure to give new distributors confidence that predictable earnings will follow their effort.
  • The strength of our distributor community has always been distributed and our strong, experience field leaders will continue to coach, train, and support their teams across the country whether the home office is full or our support personnel are working from home.
  • Our supply chains have been built to support the peaks and valleys of economic cycles, and we have the systems and processes to reliably get product directly to customers’ homes.
  • The industry will see the number of new and reactivated distributors grow dramatically for several months – and likely through the next year. Coming out of a period with record low unemployment where we competed with a wide range of Gig-Economy side hustles, millions of thousands of Americans will find a direct selling opportunity that fits them.  They will pursue part-time or full-time income with stable, reputable direct selling companies that can provide them with something they can depend on during this period of upheaval.
  • The industry will see a wave of new customers, looking for sources for products they cannot buy locally right now.  They are searching for our products online, and are connected with us by an army of new and re-engaged distributors. Electronic personal communication and Social media hold great opportunity right now, as the U.S. population has greatly increased their screen time while sitting safely at home.  The use of limited, highly personalized digital marketing continues to be effective in the recruiting and reactivation of distributors.  Direct sellers are also seeing great success using digital marketing tools to deliver “campaigns of one” to engage with and extend the life-cycle existing customers, building loyalty and delivering additional revenue for their distributors and the company.

We are in uncharted waters in this country, and around the world.  While our research calls over the past month have focused on the United States, we have had conversations with many clients about their businesses outside this country.  We also have developed insights from informal conversations with consumers and distributors in Europe and Asia.  We have evidence that many of the same consumer and distributor trends we have seen in this country are playing out in many of the developed countries in those regions.

The U.S. economy is contracting, but we have seen many of our direct selling clients grow at rates from 20-40% over the past month.  We recognize that this growth has not been universal.  We have seen the strongest growth in companies that sell personal care, meal replacement, and other daily use products.  Direct sellers offering non-essentials like clothing, jewelry, or travel (the hardest hit segment) are having a tough time right now.  The COVID-19 pandemic is not impacting everyone in the same way, but the trends we are seeing are not short term.

The “new normal” is just beginning to play out, and we’ll see the current trends continue through at least the early fall.  It’s clear, however, that the Direct Selling industry is entering a renaissance period.  In 2019, tens of millions of U.S. direct sellers were already  working from home.  Many aspects of our business model were already socially distanced, and we’re rapidly adapting the balance of our model.  No industry is better positioned for a resurgence in 2020.