Both sectors face similar challenges, such as increased competition and decreased earnings, with retail sales falling by 1% in March 2023 and disappointing results for direct selling leaders in 2022. Success in these industries relies on the ability of their workforces to drive sales conversions and adapt to ever-changing consumer behaviors.
Many retailers are now implementing a "gig" model for their frontline staff, promoting independence and autonomy. Concurrently, some direct selling trailblazers are exploring the potential of in-store sales as a means of expanding their reach. This article will discuss the implications of these strategies for the future of direct selling, the necessary training for sales representatives, and the potential advantages for businesses looking to stay ahead of the curve.
Understanding Direct Selling
Direct selling is a business model where companies sell products or services directly to consumers through independent sales representatives or consultants. These representatives typically work on commission and may receive bonuses or incentives for achieving sales targets or recruiting new team members.
Distributor-facing learning and development, incentives, and recognition, as well as opportunity management technologies, all contribute to the effectiveness of direct selling. Ongoing training for sales representatives leads to upskilling, which in turn enhances sales results.
Direct selling differs from traditional retail sales, which involve wholesalers or retailers purchasing products from manufacturers and selling them to consumers. In direct selling, the sales representative acts as the intermediary between the company and the consumer, taking responsibility for marketing and selling the products directly to the end user.
Companies such as Avon, Mary Kay, Tupperware, and Amway are well-known examples of businesses utilizing the direct selling model.
Forging a Connection between Direct Selling and Retail
As direct selling leaders face economic challenges, executives and sales managers must be resourceful in identifying new revenue streams. This includes exploring in-store sales as a means to grow the business and strengthen brand recognition among consumers.
For example, Tupperware has started selling its products at Target, while BeautyCounter has partnered with Ulta Beauty to distribute their products in-store. This approach, known as "omnichannel," "cross-channel," or "multichannel" selling, is a strategic move with potential benefits for both direct selling and retail industries.
Case Study 1: Tupperware at Target
Tupperware, a household name for food storage containers, has traditionally relied on direct sales. However, the company has now entered the retail market by making its products available at Target. This shift is part of a broader omnichannel strategy aimed at increasing brand visibility and appealing to younger shoppers who are less familiar with the direct selling channel.
Case Study 2: BeautyCounter and Ulta Beauty
BeautyCounter has formed a strategic partnership with retailer Ulta Beauty to drive in-store sales. Although BeautyCounter already operates its own stores and has a presence in other retail locations, Ulta Beauty is a significant player in the beauty retail industry. This partnership forms part of BeautyCounter's wider omnichannel strategy, allowing them to diversify their sales channels in a challenging market.
Enabling Sales Representatives in Retail and Direct Selling
Some retailers are considering direct selling and influencer marketing as potential avenues for driving sales, given the opportunities to build brand loyalty, grow the business without significant investment, and leverage social media channels.
There is a natural synergy between direct selling and retail, as both industries rely on sales forces for revenue generation and have a mix of eCommerce and in-person sales components. Furthermore, both sectors require learning and development, as well as rewards and recognition programs to upskill and engage their sales forces. As a result, the strategies used to train, upskill, and support sales representatives in both industries can benefit from similar technologies and approaches.
Ongoing training, upskilling, and rewards and recognition programs are crucial for maintaining engagement among sales forces in both retail and direct selling. Historically, retail training has often been limited to initial sessions with minimal follow-up and reinforcement, while direct selling distributors may receive knowledge reinforcement through digital apps but rarely have it tied to their performance goals.
The solution lies in Performance Enablement technology, which provides continuous training for sales representatives, along with rewards, recognition, and customer relationship-building tools. This platform connects all activities to the individual's past performance data and future goals, whether they are a distributor or a frontline worker.
To discover how Performance Enablement can activate sales forces for large, distributed enterprises, request a demonstration of Rallyware today. With the right tools and strategies, direct selling innovators and retailers alike can forge ahead in this ever-changing landscape, driving growth and success for their businesses.
