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DIRECT SELLING ASSOCIATION Direct Selling | 2017 Evolving Marketplace Survey: Maintaining Relevance in the New Economy 1 | December, 2017

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Page 1: DSA Evolving Marketplace Wave 1 Report Final...benchmark their efforts against the overall industry and against leaders in the ... • The party plan model in the age of social media

DIRECT SELLING ASSOCIATIONDirect Selling  |  2017 Evolving Marketplace Survey: Maintaining Relevance in the New Economy  1 |

December, 2017

Page 2: DSA Evolving Marketplace Wave 1 Report Final...benchmark their efforts against the overall industry and against leaders in the ... • The party plan model in the age of social media

DIRECT SELLING ASSOCIATIONDirect Selling  |  2017 Evolving Marketplace Survey: Maintaining Relevance in the New Economy  2 |

Table of ContentsObjectives, Methodology, and Profile of Participating Companies 3 – 6

Executive Summary and Recommendations 7– 14

Detailed Results  15 ‐ 52

o The Retail Marketplace is Evolving 15‐17o The Marketplace Evolution Largely a Result of Technological Advances 

in E‐commerce, Social Media, and Collaborative Economy 18‐22o Direct Selling is Evolving with a Focus on Consumers Outside the Network 23‐33

o KPIs: Acquisition and Retention Metrics 24o Segmentation 25o Preferred Customer Programs 26o Access to Consumers Outside the Network 28o Actions to Understand and Profile Consumers 29o Communicating with Consumers Outside the Network 30o Social Media with Consumers Outside the Network 31o Social Media Effectiveness 32o Social Media Management Platforms 33

o Independent Representatives 34 ‐ 39o Communicating with Independent Representatives 35o Social Media with Independent Representatives 36 – 37o Independent Representatives’ Use of Social Media 38o Independent Representatives Selling on Amazon/eBay 39

o Ordering Processes: Are Direct Selling Companies Keeping Up? 40 ‐ 44o Ordering Directly with Company 41o Shipping 42 ‐ 43o Autoship 44

o The Party Plan Business Model is Shifting and Evolving 45 ‐ 52

Appendix 53 – 61o Glossary of Terms  54 ‐ 59o Acknowledgements 60 ‐ 61

Page 3: DSA Evolving Marketplace Wave 1 Report Final...benchmark their efforts against the overall industry and against leaders in the ... • The party plan model in the age of social media

© 2017 Direct Selling Association

Objectives, Methodology, and Profile of Participating Companies

Page 4: DSA Evolving Marketplace Wave 1 Report Final...benchmark their efforts against the overall industry and against leaders in the ... • The party plan model in the age of social media

DIRECT SELLING ASSOCIATIONDirect Selling  |  2017 Evolving Marketplace Survey: Maintaining Relevance in the New Economy  4 |

About this survey

The Direct Selling Association conducted this new study to provide member companies with actionable information to improve their future go‐to market strategies and to benchmark their efforts against the overall industry and against leaders in the collaborative economy. This is the first of two waves of this study. 

Objectives

The study examines:

• The evolving nature of the direct selling model 

• KPIs such as independent representative and consumer acquisition and retention costs

• The party plan model in the age of social media

• The challenges and opportunities posed by technology, e‐commerce, and the collaborative economy 

Objectives

Page 5: DSA Evolving Marketplace Wave 1 Report Final...benchmark their efforts against the overall industry and against leaders in the ... • The party plan model in the age of social media

DIRECT SELLING ASSOCIATIONDirect Selling  |  2017 Evolving Marketplace Survey: Maintaining Relevance in the New Economy  5 |

• The survey was conducted online from September 8 – 29, 2017.

• All DSA member and pending member companies were given the opportunity to participate.

• A total of 51 member companies completed the survey out of 184 companies that were invited to participate yielding a 28% response rate. 

• Answering the questionnaire online averaged 25 minutes (median) in length.

• Note: Due to the wide range of sizes of DSA member companies and the sales strategies they employ, there are considerable variations in responses to questions.

• The 51 member companies that participated in the study are a good cross‐section of DSA member companies, however, the data is representative only of these companies and cannot be generalized to the industry as a whole.

Methodology

Throughout this report, totals may not sum to 100% due to rounding.

Page 6: DSA Evolving Marketplace Wave 1 Report Final...benchmark their efforts against the overall industry and against leaders in the ... • The party plan model in the age of social media

DIRECT SELLING ASSOCIATIONDirect Selling  |  2017 Evolving Marketplace Survey: Maintaining Relevance in the New Economy  6 |

Base: Total Respondents (N=51) Q2. Does 10% or more of your annual net sales come from the party plan sales channel?Q62. When was your company’s first year of Direct Selling in the U.S.?Q63. What is your company’s primary product or service category?Base: Total Answering (N=48)Q1. What were your company’s net sales of consumer products and services in the United States that were generated via direct selling for 2016? Base: Total Answering (N=49) 

35%

18%

16%

12%

12%

8%

Wellness products

Home durables/home decor

Personal care

Clothing and accessories

Services/miscellaneous

Home & family care

Profile of Participating Companies

Started Direct Selling…

Company’s Primary Product or Service Category

Company’s Net Sales U.S.

15%

38%

23%

25%

Under $3m

$3m to $29.9m

$30 to $200m

Over $200m

47% are Party Plan Companies

41%Before 

59%After

2000