Direct Selling in the Digital Age

If Uber or Lyft operated like many direct selling companies, their drivers would spend more time "figuring stuff out" than driving. It's crucial to find & implement technology that all of your distributors will use.

Did you know?

  • Nearly 90% of distributors work fewer than 30 hours
  • On average, distributors have less than 10 customers each
  • Micro influences have 60% higher campaign engagement than macro influencers
  • Brands and retailers spend over $1 Trillion per year to get consumers to buy their products
  • Global e-commerce cart abandon rates are over 80%
  • Mobile e-commerce cart abandon rates are over 90%
  • Ecommerce accounts for less than 20% of total global retail sales
  • Online Conversion Rates average 1% -5% compared to in person rates nearing 40%

As our real and virtual world become more connected, Direct Sellers must continue to adapt if they want to be successful. In addition to the new challenges and opportunities of the digital world, direct sellers also have age-old challenges like low distributor activity levels, low distributor retention, and high customer churn rates. So, what can we learn from the world around us, where Influencer Marketing and the gig economy are experiencing great success?

Direct Selling and Influencer Marketing were both founded on similar principles, so why does Influencer Marketing appear to be more effective outside of the direct selling channel? Similarly, if Uber or Lyft operated like many direct selling companies, their drivers would spend more time “figuring stuff out” than driving. The genius of their model is that they leverage an existing skill (driving) and provide technology that seamlessly monetizes that skill. The genius of Influencer Marketing is that many influencers focus on a single product or small number of products. In both cases, companies benefit because they understand that the goal is to maximize the use of each hour, not the quantity of hours.

Next Steps: Innovate & Simplify

There is ample evidence to prove that the following e-commerce strategies are effective and given their proliferation, downright necessary to successfully sell online:

  • Product Reviews
  • Customer Reviews
  • 360 Views (where applicable)
  • Product Videos
  • Product Recommendations (“You May Also Like”)

As e-commerce and technology have continued to evolve and close the gap between online and offline selling, new and exciting ways to engage with products, people, and brands have emerged. Almost all the most recent advancements are focused on humanizing the online experience and on removing the need for a physical presence. These solutions, depending on how they are implemented, can create better distributor AND customer experiences!

Keep in mind that not ALL of these may be right for YOUR business. For example, VR is may not applicable to most industries. However, I’m sure a few of you have experienced augmented reality in virtual fitting rooms as apparel retailers innovate to leverage the convenience of online shopping with the confidence and trust of offline shopping. And if you have engaged in a major home improvement recently, you may have been treated to either a virtual or augmented reality rendition of your finished product!

As far as what’s next in e-commerce, it’s easy to fantasize about the virtual universe. Imagine attending a virtual concert and buying your concert t-shirt from a virtual pop-up. Who knows if we will still be able to buy the $10 shirt from the guy on the “virtual corner.” Digital universes are still in the early stages of development and it remains unclear what impact they will make on digital marketing but one thing is undeniable: if there’s a collection of people in a real or virtual world, marketers will try to market to them and sellers will try to sell to them.

What should you do?

The answer is as old as direct selling itself: increase engagement of both distributors and consumers by making the business opportunity and purchasing journeys easier.

Embrace full timers and part timers in their respective paradigms.

Companies have invested considerable resources over the years to convert “passive distributors” into active ones but the ratio of passive to active distributors has hardly changed. By increasing the effectiveness of both part-time (micro influencers) and full-time distributors (macro influencers), direct selling companies will generate more activity. By implementing new livestream shopping technology, companies will see higher average order sizes and greater conversion rates.

Embrace full timers and part timers in their respective paradigms.

That’s a strategy that not only costs companies billions of dollars annually but it can also be costly by overwhelming sellers and increasing their barriers to success (more time “doing stuff,” less time making money). Remember that your primary goal is to maximize every hour they devote to the business of selling whether part-time or full-time.

Rethink your Distributor Facebook (Social Media) and Zoom (Videoconferencing) strategies.

We know that distributors operate on social media and videoconferencing platforms. However, we also know that selling seamlessly on these platforms is not possible and will become increasingly more difficult, not to mention that Direct Selling organizations have little visibility or control over these platforms. A new suite of livestream shopping products have emerged that have proven to be critical tools in this endeavor: shoppable videoconferencing (similar to Zoom), shoppable broadcasting (like social media "lives"), and shoppable video. Data shows that these tools become even more powerful when offered directly from distributor sites compared to the unnecessary friction of hyperlinks or maintaining separate e-commerce platforms. Companies that employ these tools are seeing conversion rates up to ten times greater than conversion rates of traditional e-commerce, including social media platforms.

No matter what your product or service is, humanizing the online experience and creating trust online are keys to e-commerce success.

Technology has made it incredibly convenient to shop from anywhere and is closer than ever to providing the trust and confidence online that was once reserved from physical contact and proximity to people and products. Technology has also allowed more sellers (or influencers) to enter the marketplace and reward them for sharing products. Using technology, convenience, and a simple system, you too can create a powerful shopping experience that will transform your business.