The direct selling industry showed some resilience during the past two challenging years. It has continued to do well, showing a tremendous amount of ingenuity and agility.
The way people do business has changed, and people’s priorities have shifted. It’s time to revitalize the industry by investing in the field and giving them what they need to succeed.
According to the World Federation of Direct Selling Associations, the global retail sales of network marketing amounted to $179.3 billion by December 31, 2020, showing a year-over-year increase of 5.8%. In addition, the number of independent representatives amounted to $125.4 million, which represents a 4.3% increase.
Staying on top of emerging trends can help you stand out from the crowd and gain a competitive advantage.
Now, let’s dig deep into the hottest direct selling trends of 2022!
Demographics: More Gender & Racial Diversity
One of the biggest, continuous trends of 2022 is the diversity of your field representatives. Diversity and representation should be reflected in your strategies.
Let’s start with the gender gap: 2020 was a disruptive year for the female workforce in the USA. According to the National Women’s Law Center, female workforce participation has dropped to 57%, the lowest level since 1988. Estimates of the number of women who have left the workforce since February 2020 range from 1.8 million to 2.5 million.
This could be a massive business opportunity for direct selling companies. Savvy MLM companies will take this moment to examine and capitalize on the qualities of many women and begin to close that gender gap.
Entrepreneurship will be the first choice for many women looking for a fresh take on work. The number of female entrepreneurs has been growing steadily for some time.
According to the U.S. Census Bureau, in 2018, 1.1 million women-owned companies employed people, and 10.6 million women were self-employed. In the past two decades, the number of women entrepreneurs has increased by 114%.
Fortunately, the direct selling industry checks many of the boxes that entrepreneurial women are looking for. It gives people the ability to work as much (or as little) as they want and when they want. And we invest in our independent distributors’ professional and personal development, making us more than just side gigs for those who want to grow their skills and explore their potential.
“Study after study shows that companies with a diverse workforce outperform those that lack diversity,” says Lauren Lawley Head, owner of Lawley Head Media, a marketing and content development company. “Gender equity is one piece of a comprehensive approach to diversity, equity, and inclusion. This is why it is important for companies that want to remain competitive to focus on establishing a strong employment brand that speaks to the values of today’s emerging leaders.”
Here are some data to back it up:
- 48% of Gen Z are of ethnic and racial minorities. (Pew Research Center)
- There is a 70% likelihood of diverse companies capturing new markets. (HBR)
- There is an extra 230% cash flow per employee in diverse companies. (Bersin by Deloitte)
By diversifying the field, a natural byproduct will be direct access to a larger, more diverse customer base and a wider audience of sellers. Attracting a different, new demographic is critical for business success in 2022.
The Rise of Health & Wellness
The COVID-19 pandemic was a massive wake-up call for many of us. As a result, a lot of people have started taking better care of themselves and their health. This has led to a significant rise in demand for immunity boosters and supplements.
In 2020, the global health and wellness industry was valued at $3.31 billion. More than that, by 2025, it’s expected to hit $4.24 billion. The health and wellness category has been booming like never before.
As per a recent IDSA report, approximately 55% of the total gross turnover in the direct selling industry comes from the health and wellness category.
But it is not only about physical health. With stress levels at an all-time high, Americans need mental health help. As a result, there is an opportunity for direct selling companies to provide solutions; particularly important are consumers’ rising need to sleep, de-stress, and focus.
For example, the CBD industry was popular even before the pandemic. However, as people were quarantined, many started prioritizing their physical and mental health. As a result, sales of CBD products skyrocketed.
CBD stands for cannabidiol, a non-psychoactive cannabinoid found in the cannabis plant. CBD has many health benefits. For example, it is believed to help reduce anxiety, relieve pain, or limit the feeling of nausea.
The health and wellness industry started manufacturing and selling CBD-infused creams, oil tinctures, drops, balms, vapes, and many other products and accessories.
Another massive shift in the industry is sustainability. Direct selling companies are evolving their processes to become more environmentally friendly, changing their packaging or ingredients, and others make commitments to be waste-free by 2025.
Automation: Smart, Secure Payouts & More
For years, the direct selling industry lacked the data needed for its growth and development. Luckily, in 2022, direct selling companies have many powerful software options that can provide great data management and insightful analyses.
Data-led insights help you drive the right behaviors to produce revenue for the field reps and the company.
One of the crucial parts of the direct selling business is payouts. The best MLM software providers like DirectScale allow you to quickly audit and modify your compensation plan and commissions payouts – on your own and without additional cost.
The demand for instant communication, feedback, and search results created expectations of high-speed access in every part of their lives, including commission payouts.
In 2022, more and more direct selling organizations are in the process of completely digitizing their payouts through their own branded mobile wallet systems and companies such as PayQuicker or Nexio.
In addition, faster distributor payments are evolving, and the industry is launching programs to enable instant and real-time payments.
Making and receiving payments quickly is now a market requirement for digitally savvy millennials. The payout frequency is also an emerging trend that keeps distributors engaged and motivated to grow their business.
Moreover, providing as many secure payment options as possible makes it convenient for your customers to click the Buy Now button. Ecommerce payment security plays a key role in the trust relationship between your company and your customers. Therefore, investing in great payment processing technology is essential.
As online shopping booms, so do cyberattacks. The value of losses caused by ecommerce fraud increased even more in 2021, going from $17.5 billion in 2020 to more than $20 billion. According to Juniper Research, this represents a stunning 18% growth in a single year.
The right technology partner delivers real-time fraud protection and offers overall security based on needed safety standards.
DirectScale has several partners already integrated into the platform that protect against these problems.
Online Onboarding & E-learning of Your Sellers
In the direct selling industry, unsuccessful onboarding and mentorship are the main reasons many field reps don’t succeed, inevitably causing churn. In 2022, MLM companies need to look at their onboarding process and make sure it sets up the field for success.
According to Penny’s research, the field consistently cited that not knowing what they should be doing is a challenge. Moreover, 70% of corporate respondents identified better training, onboarding, and mentorship as the greatest opportunity to reduce consultant churn.
This year, make sure you help your distributors from day one. Help them build valuable connections with their teammates. Be online for them. Don’t leave your field wondering.
Communication between field users keeps teams connected and revenue growing, and the right technology partner can help you with that. Provide your team with the communication and productivity tools they need to succeed.
Whenever possible, take your remote employee experience beyond the virtual with creative and engaging team meet-ups and presentations. Onboarding is a one-shot opportunity, and you should treat it accordingly.
To keep your field motivated and loyal, they have to keep learning.
Remote working can be very challenging for your field. Work on developing their professional skills through short-term training programs or well-built courses to replenish their skillset. Effective e-learning should be your priority in 2022.
The brands that deliver digital tools, upskilling programs, and learning opportunities for their sellers will see an increase in sales. But not only that. They will see an increase in consultant loyalty, and their overall brand reputation will strengthen.
The right technology partner can help you accommodate your e-learning needs. Promote your agenda thanks to intelligent MLM software. Banners and login events keep field users engaged, informed, and educated.
Thanks to partners like DirectScale, you can display custom announcements and notifications that will keep your team updated on their e-learning journey. Moreover, you can schedule content to update automatically and segment it by language, region, and rank.
Mobile Selling & Shopping: Running Business on a Cellphone
Another huge trend of 2022 is mobile commerce, in short, m-commerce. Mobile commerce is an ecommerce subset that involves the purchase and sale of goods through a mobile device such as a smartphone or tablet.
As more consumers use their mobile devices to purchase goods, more direct selling companies focus on selling their products on mobile-friendly websites and social media.
Year after year, we spend more time on our mobile devices. Many entrepreneurs use their smartphones to run their businesses, while consumers make purchases on the go.
According to industry experts, investing in mobile commerce promises an increased ROI and a higher conversion rate, with consumer convenience increasingly growing.
Here are some mind-blowing stats about mobile commerce:
- By 2021, mobile commerce sales will account for 54% of total ecommerce sales.
- One-third of consumers’ purchasing decisions are influenced by product research on mobile devices.
- More than 67% of all consumers have downloaded the merchant app, some doing so to take advantage of a discount/coupon.
- 58% of Google searches are done by mobile phones. Only five years ago, this figure was almost half that (34%).
- Around 70% of website traffic originates from mobile devices.
- 83% of mobile users expect a smooth experience when accessing a website using their mobile phones.
This is a loud message to all direct selling companies. The user experience on a brand’s website can determine whether someone will keep engaging with your content. The more they engage with it, the more likely they will purchase a product.
In 2022, take a look at your mobile web design. Maybe your mobile app needs a modern refresh. This year, customers’ seamless experience should be your top priority as the mobile commerce trend is not going away.
Dive Deeper into Social Selling, Social Commerce, & Live Shopping
Speaking of mobile phones, we can’t leave our social media platforms and what they offer. Many direct selling companies already use social media to connect with their prospects and sell their products. In fact, 76% of sellers say that social media is in their top three sales streams.
Facebook remains the most used social media platform (94%), while 67% of sellers use Instagram and 14% use TikTok.
Influencer marketing continues to drive online sales by offering seamless shopping. In addition, thanks to social commerce features like online checkout and native shops on almost all social media platforms, influencers are important go-betweens in converting awareness into online sales.
Moreover, in 2022, experts expect live shopping to become a staple for influencer campaigns.
This modern, QVC-style live-shopping experience is one of the features Facebook and Instagram rolled out this year. Pinterest and Amazon offer similar features, too.
Social selling, social commerce, and live shopping are here to stay. In 2022, brands should pay more attention to social selling and social commerce opportunities through Meta products.
The Importance of Corporate Social Responsibility
Modern consumers care about brands’ integrity, authenticity, and corporate social responsibility (CSR). In fact, up to around 70% of Americans believe that social responsibility is essential.
Your CSR program should reflect your values. Whether your company focuses on diversity and inclusion, climate change, or philanthropy, make sure the message comes out authentically. Corporate social responsibility is a new expectation.
These days, customers are more likely to buy from socially responsible brands or companies that supported their workers during the pandemic. Smart direct selling companies listen to their customers and include CSR activities in their marketing strategies.
Research by IO Sustainability – an international research and consulting firm studying how sustainability and CSR initiatives are good for business – shows that corporate-wide CSR integration:
- Enhanced sales by as much as 20%.
- Increased productivity by 13%.
- Reduced employee turnover by 50%.
- Created a “reputation dividend” worth up to 11% of market capitalization.
- Increased company share price by up to 6%.
- Reduced financial and litigation risk, the cost of equity, and borrowing.
In 2022, take a stand and make an impact. CSR is an opportunity for businesses to look beyond profits, focus on people, and become the changemakers the world desperately needs.
Final Thoughts
2022 will be a mixed bag of opportunities and challenges for direct selling businesses across the globe. Yet, direct selling stays a stable source of income. With flexible work hours, zero seed capital, and no minimum qualification, direct selling allows people to grow and realize their true potential while also managing their full-time job responsibilities.
Despite the stability of the direct selling industry, there are challenges, like reputation. Direct selling brands need to laser-focus on sellers’ training and enablement, so the industry reputation is rewritten by a new generation of social selling companies.
Luckily, there are partners to help you on your journey. If you genuinely want to reach your full potential of managing your field, hop on a call with DirectScale.