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Latest Research: Digital Transformation of Direct Selling During & Post-Quarantine
For many industries, this past year has been an arduous one, filled with ups and downs, as COVID-19 forced many to pivot and think outside of the box. The pandemic has effectively illustrated the benefits of direct selling and working from home – a better work-life balance and eliminating time spent commuting among them. The industry has demonstrated an ability to thrive in such conditions – for direct selling companies that offer supplements and other health-related products such as Nu Skin, Herbalife and USANA, 2020 was a strong year for their bottom lines.
As many salons and spas were shuttered during lockdown, this spurred a rise in at-home beauty treatments and haircuts, and direct selling companies have risen to meet consumer demands in a changing environment. “As the pandemic expanded the self-care-at-home beauty trend, the company focused innovation around beauty device systems to meet consumer demand for at-home skin care tools, which grew triple-digits in the U.S. and EMEA in 2020,” analysts with Deutsche Bank hypothesized about Nu Skin.
Pre & post-lockdown: an analysis of direct selling’s quarantine journey
The team at Rallyware did some digging – for those direct selling companies that use Rallyware’s Performance Enablement Platform, how did distributors fare during this period of ‘quarantine’? What was the impact of COVID-19 on consultant performance, and how did performance enablement platforms play a role in helping drive success during this time of digital transformation? Armed with the goal of measuring the impact of Rallyware’s platform on the business results of users’ and their interactions with the platform, we compared these metrics for the pre-COVID period (December 2019 to February 2020) and evaluated changes during the first lockdown (March to May 2020) and the period following it, until September 2020.
For this analysis, the sample size of users and their sales was 826,000. Based on their task activity, we split users into five groups:
- non-active – had no login to a platform or no completed tasks;
- beginners – completed 1-24 tasks;
- active – completed 25-49 tasks;
- very active – completed 50-99 tasks;
- super – completed 100+ tasks.
Users who completed one or more tasks were grouped into one ‘active users’ group for further comparison with the ‘non-active’ group, which we define as a benchmark.
Here’s what we found:
- From March to May 2020 (the first wave of quarantine), there was an increase in sales performance. For the months of April and May, this increase was much more evident for active users than for inactive users, with gains in sales an average of 43.5% and 29%, respectively.
- At the end of the quarantine wave, we saw a decline in sales performance from June through to August (the third quarter), as towards the end of this period, retail and other industries began to reopen, and distributors and the salesforce began gradually returning to work, while customers began returning to beauty salons and shops. As online sales was their primary source of income during the quarantine period, this was gradually replaced by sales made offline. If we compare the third quarter with the one previous, then the average index of sales decreased by 16.8% for inactive users and 26.6% for those who were active.
- In regards to platform activity, new users continued to show high results. New users (newly enrolled distributors) during the third quarter showed an increase in average number of completed tasks per user, in comparison to the second quarter, the activity of new distributors grew by an average of 8.5%, compared with the previous period.
This highlights the notion that, as they were competing with retail sales when the lockdown had ended, distributors turned to Performance Enablement Platforms as a means of gaining new insights – such as learning more about better strategies for sales and customer service. Providing a personalized experience based on their individual goals, such platforms offer a solution for the effective onboarding of new distributors. Having a platform in place that serves as a centralized hub for information regarding the company, its products and business building strategies is even more critical to have in a virtual environment, when interacting and communicating offline is more difficult.
Digital transformation in direct selling in 2021 and beyond
Those direct selling companies that are rapidly growing are the ones that are adopting technology at a fast pace, in order to keep up with advances in technology, meet the needs of consumers and thrive in the digital world of today. Many direct selling companies were well-positioned to respond to evolving customer preferences and demands during this time of unprecedented change. For instance, as more individuals and families are opting to dine in rather than visit a restaurant, companies such as Pampered Chef and Tupperware are in an ideal position to service the needs of at-home cooks. As consumers may remain wary of activities that involve close contact for some time (such as visiting makeup counters and restaurant dining), products offered by direct selling companies will likely continue to be in high demand.
Direct selling companies are designing their own innovative tools to thrive in the digital age. Nu Skin is empowering sales leaders to become “modern entrepreneurs” with VERA – a skin consultation tool that helps sales leaders recommend a tailored skincare regimen to their customers, based on their requirements. The tool uses an intuitive digital questionnaire, face-scanning technology and an intelligent recommendation algorithm to help customers better understand their skin needs to discover the best products for them. All at the palm of their hands.
Marrying high-tech with the physical environment, global nutrition company Herbalife Nutrition has teamed up with Proactive Sports Performance to open an elite training facility for athletes. Located in California, the multi-sport training center provides a high- tech and personalized experience, including access to personalized nutrition management and a sports performance testing lab. This endeavor provides Herbalife an opportunity to better comprehend how their products help to elevate athletic performance and in turn, provides invaluable knowledge and insights to those independent distributors who work directly with customers.
As noted in a previous Rallyware article on the industry’s digital transformation: “now, moving forward, it is a matter of combining the knowledge and experience direct selling businesses already have with the tools and resources that can serve to keep them at the top of their game.” From providing a means for effective onboarding and training, to offering streamlined communication and data-driven rewards and recognition, Rallyware offers the tools and solutions to engage and empower distributors at scale. Combined with innovative tools such as Nu Skin’s VERA, this puts direct selling companies in a powerful position, perfectly poised to tackle the challenges and opportunities that tomorrow may bring.
With a Performance Enablement Platform, Rallyware is here to help distributors navigate the post-COVID landscape, from effective onboarding of new distributors, to personalized tasks and opportunities for continuous learning and growth. Schedule a demo to see the platform in action!
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