Question

how will personal selling be transformed during this pandemic?

Answer 1

Key takeaways

The direct selling industry is vulnerable to the impacts of COVID-19, given its reliance on face-to-face interactions and a seamless global supply chain.

Consumers have reported meaningful decreases in monthly spending across several categories applicable to direct selling (e.g., spending 15%-20% less on beauty products), while other categories, such as nutritional supplements, are seeing greater spending.

Brands in this space can utilize several tactics to ensure resilience during and after the outbreak.

How to weather the COVID-19 storm

Focus on repeat customers. Independent distributors in direct selling organizations typically rely on some combination of two strategies: (1) generating impulse sales through live encounters with consumers who have not purchased from the agents before and (2) creating lasting relationships with small groups of consumers and responding to their recurring needs through ongoing interactions. Despite support programs from the Direct Selling Association and others, individual distributors who are primarily reliant on new customers are likely to be significantly challenged throughout the duration of the outbreak. Distributors who are developing existing relationships, on the other hand, will be more likely to adapt, maintain their relationships virtually and continue to generate sales. With that in mind, direct selling brands should seek to identify and support their independent distributors by facilitating repeat purchases. Companies can support these efforts by communicating availability, optimizing distributors’ stock, sending samples directly to customers and being proactive on delivery dates.

Enable ecommerce. Companies like Avon are doubling down by improving, enhancing or promoting their distributors’ virtual stores, while others, like Arbonne, are sharpening ecommerce offers for their “preferred customers.

Invest in online training and development tools. Given social distancing requirements and the limitations on “nonessential” businesses, the traditional in-person model of direct selling — especially group events like Herbalife Nutrition’s “shake parties” — will require innovative thinking in the near term and evolution over the longer term. Empowering distributors with social selling tools and virtual meeting (e.g., Zoom) training, etc., will be critical. To that end, Herbalife has begun offering online experiences for its wellness education and fitness activities rather than in-person sessions, noting that online engagements have been better attended than ever before. Likewise, Amway has provided its sales representatives with additional online training and digital support to give them the tools they need to continue selling virtually and maintain sales momentum.

Incorporate COVID-19 guidance into broader health and wellness themes. Several companies that support general health, nutrition and well-being have linked COVID-19 preparedness with their broader communication themes to create a subtle link between overall health and certain types of products, potentially stimulating sales. Companies should tread carefully, however, as both government agencies — including those that focus on consumer protection — and the general public are wary of companies that are or appear to be profiting as a result of the crisis. For example, on its website, Nature’s Sunshine prominently asks viewers to “fortify” their immune system; it has also underscored the “newness” of its immunity line, even if that’s a relative term for products it has supported prior to this year. Meanwhile, other direct selling brands such as Young Living and doTerra have individual distributors touting cleaning products and essential oils that prevent the spread of COVID-19, though these do not necessarily appear to be companywide marketing initiatives.

Actively contribute to the COVID-19 response. Organizations that can directly contribute to response efforts by producing medical products, donating funds, etc., could create strong relationships with potential B2B customers and strengthen their brand’s image among distributors and consumers alike. For example, Amway has started manufacturing hand sanitizer and donating it to hospitals in its home state of Michigan, and has subsequently received significant positive media coverage; Avon has donated masks, soaps and other personal hygiene products around the world; and Nu Skin has recently donated funds, air purifiers and masks across Europe, Asia and the U.S.   

Expand distributor networks. With the sudden and dramatic increase in unemployment claims and likely longer-term distortions to the workforce, direct selling offers the promise for potential independent distributors to reinvent themselves in a new career. So far, direct selling companies have not been promoting targeted recruiting efforts to attract new distributors; however, current distributors constantly look to bring others into the network. Existing direct selling distributors have been utilizing social media to target potential recruits since COVID-19 became a global pandemic, referencing shelter-in-place orders by noting how “there has never been a better time or people to work from their homes.”

There are numerous tactics that direct selling brands can use to survive the COVID-19 pandemic. From focusing on repeat customers to incorporating COVID-19 guidance into broader health and wellness themes to emphasizing the benefits that direct selling offers new recruits, there are clearly strategies that are helping. Direct selling brands have weapons in their arsenal they might not even be aware of that will serve them very well during these unprecedented times.