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Direct Selling in North America: Adapting to Changing Consumer Behaviour in the Beauty and Personal Care Industry

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While direct selling comprises a small proportion of beauty and personal care sales in North America, (less than 10% in 2022), the pandemic has brought new challenges and opportunities for players. Euromonitor International takes a closer look at how direct selling in North America has evolved since the emergence of COVID-19, highlighting strategies beauty players are undertaking to secure future success.

Direct sellers lean into digitalisation strategies that propelled sales during pandemic

During periods of economic downturn, consumer interest in direct selling models sometimes has an uptick. This was the case in 2020, when direct sellers in North America witnessed a bump in growth while GDP declined; that bump was magnified by high unemployment and consumers’ desire for human connection. Successful direct sellers focused on their digitalisation strategies, ranging from supporting consultants with social media and content-creation tools to launching online stores, while also exploring omnichannel marketplaces, last mile delivery apps, and digital platforms.Direct Selling in North America Chart 1.svg

Post-2020 slump acts as “wake-up call” to overcome challenges that could curb future growth

Beauty direct selling sales started to decelerate and, in some cases, decline at the beginning of 2021. Consumers resumed daily activities and returned to in-store discovery, while retailers aggressively expanded their beauty assortments. Key challenges included overcoming the negative stigma of the direct selling channel, building up consumer confidence in the business model, and capturing the attention of a younger salesforce without alienating the existing one.

Purpose and transparency: The new challenge for beauty players

Younger consumers are increasingly searching for purpose-driven brands. While direct sellers do advocate for charities and causes, not many centre their entire existence around a purpose better than BeautyCounter. Since its inception in 2011, the brand has advocated for clean beauty standards to be codified in US and Canadian legislation, holding a lobby day in the US in 2022 to help push the Modernization of Cosmetics Regulation Act. The brand’s longstanding investment in promoting this type of legislation has helped build trust with consumers, at a time when clean initiatives are increasingly scrutinised.

The negative stigma of direct selling will be a key challenge to overcome. There is sometimes a lack of trust and confusion in the model, particularly among younger generations that do not remember the days of Mary Kay or Yves Rocher catalogues. Taking note of the influence of user-generated content, “next generation” direct seller Red Aspen launched a Treehouse hub. On Treehouse, ambassadors can learn through TikTok-style videos and submit their own product ideas, all fully available to the public. These initiatives should help the brand relate to Generation Z consumers who value transparency and active participation.

Salesforce and end-user experience, affiliates, and retail partnerships amplify the advantages of direct selling

According to Euromonitor International’s Beauty Survey, North American consumers are influenced by both interpersonal and online interactions when purchasing skin care. Higher numbers of respondents were influenced by recommendations from friends, online reviews, social networking sites, and influencers.

Only 4% of North American respondents were influenced by direct selling agents in 2022

Source: Euromonitor International Voice of the Consumer: Beauty Survey, fielded June to July 2022

While direct sellers hold an advantage in being able to provide a human touch, improvements are needed in terms of knowledge and counselling capabilities, so that agents have the tools to take an influencer role and build relationships on their social networks – where demand for engaging and educational beauty content is only growing.

Direct Selling in North America Chart 2.svgStrategies to reinvent the direct selling model and its salesforce will be key – especially in North America where direct sellers are feeling pressure from e-commerce, beauty specialists and hypermarkets. Unlike most direct sellers, Mary Kay was able to increase its US sales in 2022, as it has a history of building up its salesforce and prioritising the consumer experience. Since the launch of its digital showroom, Suite 13, in Mexico in 2021, Mary Kay has expanded the showroom to other markets, including Canada and the US. This tool combines online experiences and personalisation, allowing the brand to compete with digitally native brands.

Some players, such as Usana, Nu Skin and Red Aspen, are exploring affiliate programs to complement their existing selling model and tap into growing social media and influencer opportunities. Unlike traditional direct selling consultant opportunities that offer various and sometimes confusing compensation plans, affiliate programs streamline the focus to commissions through personal selling links. In this way, the direct selling agent is positioned more as an influencer sharing products with their network rather than a traditional representative. Given the high influence of online user reviews and peer beauty recommendations for North American consumers, direct sellers should explore more social commerce opportunities via their consultants or affiliates.

Omnichannel partnerships with retailers can help introduce a new group of consumers to direct selling brands. This was one of BeautyCounter’s goals when it opted to roll out some of its SKUs to Ulta Beauty stores in 2023. Consultants will remain the main selling point for the full product range, but this development could bode well for BeautyCounter, as it would no longer be solely reliant on its consultants and new product drops to generate attention. At the same time, when many pure online brands are also testing retail partnerships for the first time, this partnership could expand consumer reach without cannibalising sales and better position direct sellers to be where their consumers are.

Future outlook: Bringing the direct selling model into the new age

Beauty brands are trending in shorter windows, due in part to social media; brands that sustained immense popularity in a 3-5-year window pre-pandemic are now faced with maintaining that momentum over one to three years. This is impacting beauty direct selling players in North America, which must adapt to changing consumer behaviours, including the adoption of an omnichannel strategy, and setting up affiliate programs or direct selling marketplaces to meet consumers where they shop. Providing educational beauty content to the North American consumer that increasingly researches beauty before making a purchasing decision could help direct sellers attract younger generations and reverse a sluggish performance.

To further explore the biggest obstacles and opportunities facing direct sellers in the Americas, read Carmen Silva’s article Direct Selling in Latin America: Facing New Challenges in the Beauty and Personal Care Industry. For in-depth trend descriptions, case studies and strategic recommendations read Direct Selling in Beauty and Personal Care: The Needed Transformation to Thrive Post-Pandemic.



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