Given that human contact is the very essence of this channel, sales obviously collapsed during the first few weeks of the pandemic in 2020. The channel lost 70% of its sales in March and April 2020 according to the main direct selling trade association in France.
From 2020, a growing proportion of sales in direct selling were organised via social networks and with the use of digital tools with this continuing into 2021. Network selling benefited from the general shift towards online marketing while many sales agents and customers were recruited online.
The ongoing appeal among French consumers for products for the home and for wellbeing is exemplified by the astonishing progression of Vorwek and Herbalife. Vorwerk was already a dynamic direct seller before 2020 but managed to forge ahead by training its direct sales force of around 7,000 advisers in France in web tools.
In the middle of 2020, direct selling players did not expect the channel to return to pre-COVID-19 sales levels before 2023 at the earliest. Their reaction against the consequences of the pandemic was so efficient that, at the end of 2021, their predicted scenario of a return to pre-COVID-19 sales levels is 2022.
Similar to difficult financial times, such as the financial crisis faced in the years prior to the review period in 2008-2009, the expansion of the networks of sales agents of the leading names in direct selling is expected to accelerate. Direct selling is often seen as an ideal source of extra revenue by people facing financial hardship which means direct selling is likely to be able to ride out the post-COVID-19 period in a better condition than some other retail channels.
Difficulties will persist for direct selling agents who encounter scheduling face-to-face meetings in the homes of their customers, not only due to the probable lessening of the aftermath of the COVID-19 restrictions but also due to the aforementioned switch of direct selling towards a neo-e-commerce business model. The diminished consumer confidence and the massive adoption of e-commerce by previously reluctant consumers (notably seniors) could further limit their ability and willingness to invite direct selling agents into their homes and/or attend in-person sales meetings.
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Direct selling is the marketing of consumer goods directly to consumers, generally in their homes or the homes of others, at their workplace and other places away from permanent retail locations. Direct selling occurs in two primary ways: -one-to-one basis (usually by prior arrangement a demonstration is given by a direct seller to a customer) or -party-plan basis (selling through explanation and demonstration of products to a group of prospective customers by a direct seller usually in the home of a host(ess) who invites other persons for this purpose). The prime example of a one-to-one method is Avon. Tupperware is famous for its party-plan method. Direct selling of services - such as insurance, telecoms, other utilities, financial services - are excluded.See All of Our Definitions
This report originates from Passport, our Direct Selling research and analysis database.
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