January 01, 2015
Ramping up for a New Year of Industry Research
by Ben Gamse
Management consultant Stephen Few said, “Numbers have an important story to tell. They rely on you to give them a clear and convincing voice.” This sentiment is no different for the direct selling industry.
Direct selling is a unique sales model that is easily misunderstood and therefore subject to misinterpretations and misrepresentations. Clear and reliable communication of industry information to key audiences is enormously important and can help facilitate industry growth moving forward. Industry research is one of the most vital tools to effectively communicate this information, and Direct Selling Association (DSA) research is helping to lead the charge.
Leesa Martin, a member of DSA’s Industry Research Committee and Director of Market Research & Development, Sales Strategy at Thirty-One Gifts explains, “DSA and industry research is important because, unlike the non-direct selling world, many of the companies are privately held, and there is no syndicated data like IRI or Nielsen—all data sources that can help companies benchmark themselves and understand how our industry is evolving/changing. Industry research helps us understand our salesforce and our customers.”
DSA research, with the guidance and oversight of its Industry Research Committee—chaired by Jeff Morris (Director of Forecasting and Financial Analysis at The Pampered Chef)—is diligently working to help fill the data void with industry statistics and insights. “Industry research is vitally important to accurately portray the industry with complete and reliable data, unite ourselves as an industry, and demonstrate the social and economic benefits of direct selling in the U.S. in a tangible, quantitative way,” says Morris. “Industry research also helps us learn about our industry and uncover benchmarks and best practices that help drive business decisions, which in aggregate lead to industry growth.”
Emily Trainor, also on the Research Committee and Lulu Avenue’s Sales Analytics Manager adds, “Industry research is important for all industry members because we are all unique companies that together comprise a huge impactful industry. The research helps to identify similarities to industry trends as well as highlight areas of uniqueness for our individual companies.”
DSA research has come a long way, and as data becomes increasingly important, DSA is bolstering its research offerings, and we are poised for an exciting future.
Setting the Stage
Over the past few years, the Industry Research Committee has grown significantly, increasing research capabilities. The Committee has compiled a 360-degree view of the industry by synthesizing the most recent research studies (listed below) as a comprehensive State of the Industry Report. Now we are excited to share some of the top-level findings:
DSA’s 2014 Growth & Outlook Report provides a macro industry-wide perspective and shows us that direct selling has achieved record growth: $32.7 billion in estimated retail sales and 16.8 million people involved in direct selling in the U.S. Both of these figures represent all-time highs.
The 2014 National Salesforce Study surveyed over 20,000 independent sales representatives in direct selling and uncovered many motivations for joining the industry related to entrepreneurship, lifestyle, and love of the product. Drilling deeper, we find that long-term supplemental income, flexibility and getting the products at a discount were the most commonly cited motivations for becoming a direct seller. All motivations became stronger, except short-term income, as we look at reasons why people continue with direct selling.
DSA’s 2013 Sales Strategy Survey studies best practices and benchmarks from direct selling companies. Key findings are that distinctions between person-to-person and party plan sales strategies are becoming less rigid, and the Internet is growing to complement existing sales strategies.
Initially the Internet was seen as a threat to the industry, but now some of the companies that are experiencing the most growth are successfully utilizing e-commerce, mobile, and social media technology to complement their business and drive growth. Forrester Research forecasts that e-commerce is expected to grow 10 percent CAGR over the next four years and reach $370 billion by 2017, posing a powerful opportunity for direct selling companies.
DSA’s 2012 Consumer Attitudes & Perceptions in Direct Selling Survey finds that consumers list “feeling good about supporting a small business in my community” as one of the most appealing characteristics of direct selling.
Having completed the State of the Industry Report, DSA is ramping up for a new year with a full pipeline of research initiatives including the 2015 Growth & Outlook Survey, Socio-economic Impact Study, and Economic Opportunity Assessment of Direct Selling. This exciting new research will allow us to tell the story of the direct selling industry in a clear, convincing voice.
You can find even more top-line industry research statistics on the DSA website. Or you can browse full DSA reports including the Growth & Outlook Report and Sales Strategy Survey at the DSA Online Store. Also, ensure that your direct selling company participates in DSA research, including DSA’s upcoming Growth & Outlook Survey. For questions, contact DSA’s Market Research Manager, Ben Gamse at 202-452-8866 or at email@example.com.
Ben Gamse is the Market Research Manager for the Direct Selling Association.