As society goes “hi tech”, the backlash is the consumer’s growing demand for “high touch” … high service, personalized, sales and service.
Watch for more direct selling of consumer goods with high enough pricing structures to allow sales people to make a living selling them directly.
From MLM.com via Ty Tribble on the MLM Blog:
Bill Blass, Jockey International, The Body Shop and Aerosoles are among the big players in fashion, personal care and footwear that have direct sales divisions. Others are considering doing the same. For example, Soma by Chico’s, which focuses on lingerie for Baby Boomers, has had success with in-store parties hosted by customers and may expand the program to in-home events.
Selling products directly through independent sales reps, often through in-home parties, can be an effective addition to a brand’s multichannel arsenal, while typically netting smaller numbers than retail stores and catalogues. Cheaper and less risky than opening stores, direct and home selling often create fierce consumer loyalty in a grassroots alternative to traditional advertising.
“If it works well, you get evangelical people pumped up about the product, which is better than advertising to reinforce a brand,” said Cynthia Cohen, president, Strategic Mindshare, a Miami marketing and branding consulting firm. “In stores today, there’s more product and much less service, so in-home sales edits product, explains and personalizes it for consumers.”
Demographics may also support continued direct sales growth as Baby Boomers of retirement age look to part-time direct sales jobs for the income, flexibility and socialization they provide, Cohen said.
But the business model, with its volunteer army, can also be fraught with challenges.
“To replicate store sales you need five to 10 times the number of independent reps,” Cohen said. “There’s a huge fallout and turnover in sales reps after two years. With startup costs, infrastructure, legal contracts, training, recruiting and keeping sales people, it’s an interesting but not an easy solution.”
The U.S. direct sales industry, which includes in-home selling, has almost doubled in the last decade to more than $ 30 billion a year. Annual growth averaged 7.1 percent in the last 10 years, outpacing traditional retail’s average yearly gain of 5.5 percent, according to the Direct Selling Association, a Washington-based trade organization representing 180 active member companies. Direct sales of clothing, lingerie and shoes total about $ 800 million annually.
No comments yet.