Reflecting on 2020 allowed us to reach out to so many who make the direct selling channel one of the finest in the world and available to anyone looking to connect on a deeper level with the products and services they appreciate and love.
It’s so much easier to represent and share a product/service/brand that you believe in. In fact, this is typically how and when someone responds favorably to a business opportunity and becomes a direct seller/network marketer.
Direct selling products and services represent diverse, broad and deep categories and fill many consumer needs and wants. When we think of Amway, we can easily identify the Amway Brand products and services. The same can be said of Mary Kay Cosmetics’ beauty and skin care products and so many others that have become legacy brands. The possibility of direct selling’s future is built on legacy brands, but going forward, it also lies in the hands of emerging brands.
As we started the research to write this article, it occurred to us to not only search for the stories that needed to be told about this industry, its companies, and how 2020 impacted them but also take a moment to become part of the story ourselves.
During the course of any year, we publish 12 monthly and 52 weekly publications, plus special “breaking news” articles. Consequently, Direct Selling News is a reservoir of information that serves as the kind of source necessary when reflecting upon a most challenging and amazing year. We are privileged to share our observations of a year we will long remember—for 2020 has been a year like no other in our lifetimes.
From our point of observation, the impact of 2020 can be broken into three pieces:
1. What happened.
2. What did not happen.
3. What needs to happen/Our Outlook for 2021.
The direct selling model faced enormous challenges due to regulatory actions of recent years; continued, phenomenal gig economy growth; e-commerce consumer shopping preferences; innovative technologies; and a shrinking growth rate for the direct selling model both domestically and globally. On top of all of this—before the end of 1st quarter—a global pandemic changed our world and our physical routines dramatically.
Party plan companies already faced marketplace challenges associated with less physical shopping at social gatherings known as “home parties.” People gravitated toward shopping on their “seats” instead of their feet. The convenience of shopping at any time from any place, via any device connected to the internet, revealed dramatic shifts in marketplace dynamics and direct selling companies, overall, were playing catch-up. At the same time, the network marketing form of the business model reeled from regulatory challenges and actions that had these companies centered on compliance, revisiting compensation plans, and adopting customer-centric, product-focused business philosophies.
In 2020, the entirety of the industry—party plan, social selling, network marketing, social entrepreneurship—was in the same boat, rowing together not just for survival but the ability to thrive as an industry.
The pandemic forced new thinking, quicker thinking, speedier problem solving, innovation and yes…transformation. What had lingered as “some-day endeavors” within direct selling C-suite discussions for the past few years started to take shape and emerged very quickly. It was amazing to watch!
Direct sellers and their customers did not shy away or disappear. In fact, many companies featured in this issue experienced growth as they identified and met the challenges of doing business in 2020. They realized precisely how essential their products and services were —and their customers, independent representatives and companies reaped the rewards.
At a time when service gained extra meaning for consumers, direct selling companies via their independent contractors provided excellent products and services. They did so in a more personalized manner, despite shifting contact to the virtual realm. Direct sellers became Zoom experts overnight…or at least it felt that way. Companies innovated quickly and adapted major in-person events into major virtual ones. Attendance didn’t plummet. It went up!
Direct selling companies proved they were nimble. They moved faster and responded to challenges quicker than, perhaps, ever before. Direct selling companies partnered with suppliers to keep supply chains operational—so customers could be served.
The results: growth rates for some companies—the likes we had not seen in quite some time—occurred second quarter 2020. Momentum shifted and COVID-19 has become an accelerant for the business strategist, while companies continue to work on keeping everything as safe as possible.
So… What Needs to Happen?
Our outlook is an optimistic one based upon the many company executives we interviewed this year and the countless stories we brought to our readers about the channel in 2020.
The challenges we mentioned relative to 2020 were, for the most part, unrelated to the pandemic. They existed before, and they will still exist in 2021. What has changed the game—and will continue to do so in the future—is technology.
Artificial intelligence will play a larger role in helping us think faster and deeper. Robots will continue to replace human labor; therefore, people will continue to be replaced or displaced. The gig economy and all of its related labels will continue to grow at unprecedented rates. Once considered a phenomenon, the side hustle now appears to be more in keeping with a labor revolution. More and more people from all walks of life are attracted to micro-enterprise opportunities. There seem to be solid reasons for the shift away from rigid, traditional, industrial labor to a labor force more interested in flexibility and freedom with how and when work can be done. The trends are apparent, and the research supports it.
It appears to us that the direct selling industry’s future is contingent upon what we do as companies. How will we improve our relevancy in a more competitive yet far more receptive marketplace of people who are seeking and embracing micro-enterprise opportunities? Direct selling is often thought of as a unique and most personal sales channel. We believe 2021 will be about us and the numbers of customers we can attract through micro-enterprise business owners supported by the efforts of direct selling companies. The coming new year will be what we make it—innovative and transformative. DSN