The Dawn of the Phygital Movement in Direct Selling

There has been a great deal of research and ongoing discussion around the pandemic and its impact on direct selling. The data clearly demonstrates the power and agility of direct selling as both a distribution channel and business opportunity.

The pandemic has forced our industry to operate in a world that is more virtual than at any time in our industry’s history. We are facing new opportunities and challenges. The direct selling community is asking, “How will the pandemic require direct selling to evolve so that it remains relevant in the marketplace?”

For the first time in history, direct selling is operating in a virtual world; where live meetings are replaced with Zoom calls and virtual events. Social selling became the buzz phrase used by many companies in the industry to differentiate their company from only being seen as a direct selling company. The focus on e-commerce, technology and data are growing at a rapid pace. Our industry is forced to learn new skills and to adapt quickly to succeed in the digital world. The pandemic has changed the trajectory in which direct selling will operate in the future.

The pandemic created a unique challenge for the industry that will continue even after the pandemic is over. The “new normal” will require us to build our business both online and offline. While social selling helped teach distributors how to sell in the digital world, the challenge we face is building culture and community in the world we live in today. Our strength has been defined by our ability to build culture and community offline. This will always be a timeless fundamental to our business model.

The value-add for direct selling has always been people building relationships with people. We always understood the powerful need people had to belong to something. We are masters of “Cultural Addiction,” the behavioral game of building a massive critical mass that included both customers and distributors. Direct selling was built around this fundamental concept. It differentiates us from many of the other businesses that use an independent contractor entrepreneurial model to drive sales, especially the GIG opportunities.

So much of business today exist in the virtual and digital world. I don’t see that changing. On the contrary, I suspect it will grow. Our customers live there. Our distributors live there. Our employees live there. Every part of the direct selling ecosystem is impacted by this change. Ultimately, we are forced to master the experience game both online and offline. This is the beginning of the Phygital Movement that will play an important role in the in the future of our industry.

The term “Phygital” is not a term you hear much in direct selling. Phygital marketing is not a new term. However, I have not seen it used in the transformation of a business culture. Just like selling has created an omnichannel focus, the Phygital movement is requiring us to create a multi-channel approach to delivering a more complete and satisfying experience for those who live within our business cultures.

Anyone that understands the business knows its foundation is built around the customer experience and customer journey. A great example of where this concept is utilized today in direct selling is the focus on UX and UI in the e-commerce world. Technology companies are having to be more innovative in helping customers enhance the interaction with consumers shopping on their websites. We are seeing new technology tools enhance our ability to succeed in the digital world. Because more are shopping online, all businesses, including direct selling, must master the experience game with online shopping.

As a long-time student of behavior, I have spent much of my career trying to understand and master the experience game. I understand that relationships are correlated to engagement which means they are critical to building culture. Engagement is a simple formula, “Engagement = the triumph of hope over experiences.” When the experience game isn’t working well, hope is all that is left to keep people engaged. However, hope is nothing more than one’s belief system about the future. Our industry is one of the best in the world at marketing hope. Hope opens doors, but experiences are the key to building relationships.

The online world operates in a similar way when it comes to what we define as a “great experience.” Great experiences are defined by five key organizing principles. They need to:

  1.  Be positive
  2.  Be meaningful
  3.  Create hope
  4.  Confirm hope
  5.  Magnify hope

There is an important component of experience that matters in both the online and offline world. Hope is a beggar. It requires experiences to both confirm and magnify experiences. If not, hope does not turn into reality. If hope fails to deliver on the expectations we create for others, our industry and those in it will lose trust. Even worse, the loss of trust can lead to an army of brand terrorists and have a profound consequence to the future of direct selling.

The Phygital world requires us to modify the experience game. It is bigger than just selling on social media platforms. This is where we see a much bigger focus on technology to facilitate immediacy, immersion and interaction. We can no longer be relevant as a distributor channel or business opportunity if reliance is solely on building relationships and culture offline. We are forced to connect these worlds to enhance every aspect of our business as to provide a synergetic experience. Remember, people in the marketplace today seek a more connected experience—an experience where the physical and digital coexist in the same journey for both customers and distributors.

Everything starts with awareness. However, awareness has little value unless it turns into execution. If we are going to master the Phygital game, here are some key components that will help us do that.

Better understand our audience from a behavioral perspective.

Embracing segmentation of the different relationship avatars that are critical to the success of building connection and culture.

More journey mapping of touchpoints and embracing data analytics to understand and strengthen the journey of both customers and distributors.

The adoption of emotional and empathy mapping, a tool used in collecting data about customers to better understand the target customer base. They allow you to visualize customer needs, condense customer data into a clear, simple chart, and help you see what customers want—not what you think they want.

Utilization of new technologies to understand and enhance our ability to win the experience game.

Train our distributors so they can succeed in the digital world and learn from those who bring that understanding to us.

It will require us to modify our thinking around scaling our businesses. To scale up, we must
scale down. We must get in the trenches with our people to ensure we see the world from their perspective.

We are at the beginning of the Phygital movement. Mastering the experience game both online and offline is the “new normal.” It will drive sales, improve customer retention, elevate distributor engagement, attract a different type of talent to our industry, magnify the power of our brands and enhance the perceptions about direct selling. Ultimately, it will ensure that direct selling remains relevant and leads in the marketplace as both a distribution channel and business opportunity.

There will be other key aspects of our business model that continue to evolve. We are seeing a shift in compensation plans and strategies. There will be increased focus on the micro-entrepreneurs and retailers from the customer-centric shift that started around 2016.

The best way to summarize the key to the future of direct selling is through the words of Peter Drucker. Change is often a turbulent time. During these times, we all need to embrace his wisdom. He noted, “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.” The time to embrace the Phygital movement is now. We must expand how we build culture and community. Those that do will be the future leaders in direct selling globally.

 

Gordon Hester is a direct selling industry veteran, lecturer, consultant and an accomplished author. He is on the DSA Research Committee, the DSA Government Relationship Committee and is on the Board of the DSEF. Hester owns a stack technology company, Shapetech Solutions.