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.
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.