At the World Federation of Direct Selling Associations (WFDSA) World Congress XVI, held in Bangkok on October 6, 2021, the WFDSA Board of Directors held a CEO panel to discuss the future of the direct selling industry.
Roger Barnett, CEO of Shaklee Corporation and Chairman of the WFDSA, was the moderator for the event that featured WFDSA Board Members Magnus Brännström, President and CEO of Oriflame Cosmetics; Lam Yu, CEO of Infinitus Global; Dora Hoan, Founder, Co-Chairman, and Group CEO of Best World Lifestyle; Ryan Napierski, President and CEO of Nu Skin Enterprises; João Paulo Ferreira, CEO of Natura &Co Latin America; and Milind Pant, CEO of Amway.
Portions of the CEO panel are printed here with the permission of the WFDSA.
How Do We Reimagine, Reinvent, and Redefine Direct Selling?
Barnett: The direct selling industry is more than 100 years old. What is the most important thing we could do to reinvent, reimagine, and redefine our industry for the next 100 years?
Napierski: That one thing, in my view, is to truly embrace a customer-obsessed or customer-first approach. I don’t just mean the consumer; I also mean our affiliates, our consultants, our distributors—whatever we call them. Becoming a truly customer-obsessed industry will ensure our viability into the future no matter what we need to do strategically to accommodate their needs.
Hoan: The single most important thing we could do as an industry is embrace digitalization. In today’s world, the business model and people’s lives are experiencing constant changes due to the advancement of technology, combined with the new normal brought about by the pandemic. However, plans can never catch up with changes. The core value of direct selling has always remained the same—and that is to provide quality products and an entrepreneurial platform to make people’s lives more exciting and better. In the digital age, the direct selling industry could be redefined as a membership-based e-commerce platform.
Ferreira: Our industry has deep roots based on building trustful relationships—relationships between companies and distributors, between consultants and their clients, and, ultimately, between our industry and society. What I think is the opportunity going forward is that we use the power of digitalization, which Dora referred to, to increase our reach and our positive impact on society.
In the digital age, the direct selling industry could be redefined as a membership-based e-commerce platform.”
—Dr. Dora Hoan, Group CEO, Best World Lifestyle
Pant: At our core, we are an industry of inclusive entrepreneurship. The question is this: How do we make direct selling relevant and make it a magnet for a younger or a new generation? As we pull that off, we will continue to be an industry that continues to modernize, be relevant, and provide opportunity for millions across the world.
Yu: We are not satisfied being a small fish in a small pond. We need to be a big fish in a big pond. After 100 years, we are competing way beyond peers among our industry. We’re actually competing with other companies and with social media, e-commerce, and gig economies for job seekers. What we did in the past is not correct. What we need to do is to change our perception.
Barnett: To recap, the common themes are:
Embrace the modernity of how people communicate and buy goods today, which is the digital component.
Focus on the customer—give the customer choices of where, how, and when to buy and create these amazing products.
Embrace the roots of direct selling—what’s fundamentally different about us is the community that we create in the connection among our customers. That’s a point of distinction in the marketplace as we go forward.
What Remains Going Forward?
Barnett: Many of us have had to change the way we do business over the last eighteen months as a result of COVID and now, the Delta variant. Are there elements of how you’ve done business differently that you’re going to keep going forward as we go into the next phase of this post-pandemic world?
Hoan: The impact of COVID has definitely led to many changes, both on the personal and the corporate side. I have to admit that I was never good with technology. However, the pandemic forced me out of my comfort zone, and I knew that I had to embrace technology. As CEO, I have to know how to operate on various technology platforms so I can constantly stay in touch with my management team and the distributor field across the many countries we operate in.
On a corporate level, I knew I had to transport the company to digitalization to keep pace with the changes resulting from COVID. We had to increase our IT staff. We had to beef up our e-commerce platform quickly to ensure our distributors were able to operate smoothly. We digitalized and automated our training. We even set up an online academy to allow our distributors to have a better learning experience.
I believe digitalization is here to stay. All the changes that we make to our business will be a permanent aspect of our business model moving forward. We also have to constantly ensure that our staff has the necessary skills training to stay ahead of the curve. Technology is a tool for us to enhance our business; however, direct selling is still very much based on interpersonal relationships, which cannot be replaced with technology.
Napierski: The adoption of digital is one of the key value-adds to the challenges related to COVID. The other one I would add is the increased level of empathy for people around the world. I really hope that as we continue to lean into a digital-first approach to market and a digital-first way of living, we’ll also continue to be more empathetic.
Ferreira: I was reflecting on what happened to our business during the pandemic. We did extremely well, but that was a consequence of putting our people first in the peak moment of uncertainty. We left business goals aside and decided that people would come first. We donated to health authorities to try to help contain the COVID spread to communities in the rainforest. We created an emergency fund for the most vulnerable consultants and representatives around the world. And of course, we accelerated the digitalization of the business model as well as the education of our network.
In the end, what was really special was the human touch, because that’s what mobilized people. There was this empathy. I think that is the most powerful element of our industry. No matter what technology we use, there are always humans in the loop.
Pant: One of the things that the pandemic has done—and continues to do in many parts of the world—is shine a light on the strengths of our industry, the strength of our entrepreneurialism, and the strength of our colleagues and employees. There’s been such a groundswell of entrepreneurship across the world. Here in the US, new business applications have gone up 24 percent in the midst of the pandemic. There are young people looking for flexibility, looking at following their passion. They love the sense of community or building new businesses.
There is also a renewed focus on health and wellness. There are many parts of our industry where entrepreneurs build communities and provide health and wellness solutions. That’s going to be a big thing for society going forward after we’ve solved the issues of the pandemic. So, there have been so many aspects of the strength of our industry that have shone brightly during this pandemic, giving us a tailwind going forward across the world.
One of the things that the pandemic has done—and continues to do in many parts of the world—is shine a light on the strengths of our industry, the strength of our entrepreneurialism, and the strength of our colleagues and employees.”
—Milind Pant, CEO, Amway
Barnett: I think people have embraced the idea of working from anywhere as a concept. The idea of this flexibility and being able to fit work into your life and work from anywhere is going to last for a long time. And that’s a benefit that we have provided our people for a very long time. I think the only other thing to add is that in addition to the empathy, I think the pandemic showed the need for places and communities where people can have hope and aspiration about the future.
Most of our businesses thrived during this moment in time in part because we could make that transformation to digital. We could provide products and services, particularly around health and well-being, that people cared so much about. It created a sense of optimism when other things were bleak. That’s a reminder for us to keep optimism at the forefront of what we do for the years to come.
How Do We Contribute to the Broader Society?
Barnett: We all sell products. We all provide earnings opportunity for people. But is that all we should be focused on? Should there a broader contribution to the societies in which we operate? How can we grow our impact even more?
Ferreira: We all manage a huge network of people. We have such a potential positive impact on society. We can change behaviors. We can change standards and the way people look at companies, at governments, and at each other. We talked about being a 100-year-old company. We now have Avon, which is celebrating 135 years. I was thinking this company was empowering women before women had civil rights. Isn’t that amazing? I think this is the sort of impact our industry can have on our societies.
In the case of Natura, we monitor the Human Development Index across our network. We noticed that income was only one component of well-being. There was health, education, digital inclusion, and civil rights. We decided that we would keep shifting and improving our business model, so we started providing health solutions and services, education, and so forth. Because we have so many people touching so many lives around the world, we have to raise our own bars and understand the value we generate to society. It goes beyond the value to shareholders.
An impact on environmental, social, and governance (ESG) is what society will demand from all companies. The good news is that direct selling is in a privileged position to lead the way. We can be the lighthouses of ESG in the years to come.
Yu: In China, direct selling companies have been educating consumers and giving training opportunities so that more people will recognize the importance of health and wellness.
Pant: For us, it goes back to the idea that Rich DeVos and Jay Van Andel had when they founded Amway: help people live better, healthier lives. This is before words and phrases like purpose and corporate purpose became mainstream. That’s the foundation that has been our north star. And that leads us to one of the biggest contributions—the idea of inclusive entrepreneurship. In Korea, which is a billion-dollar business for us, 90 percent of Amway business owners are women. Our business in India calls its women empowerment program, “Nari Shakti” or literally, “women power.”
Our Amway business owners across the world touch the lives of millions of people. That’s the impact made on health and wellness, and the impact made in terms of women empowerment. This is an addition to the work that is done with the pandemic, which we had to respond to in many of the markets across the world. This pandemic has reminded us that at the core of direct selling is a humanity. It’s a network of humanity that spreads goodness. Our entrepreneurs are powerful forces of change across the world.
Barnett: At Shaklee, we measure our sales and profits like every other business, but we really measure how many people we are impacting. And the human impact is what all of you are talking about. I think it’s just great to keep that at the forefront for all of our corporate brothers and sisters out there.
How Is the Digital Transformation Impacting Business?
Barnett: We are entering into a phase in which e-commerce is growing in the United States, and predictions are that in China, in the next year, it will be over 50 percent of total retail sales. There is also the explosion of social networks. What does this digitization mean for the direct selling industry?
Pant: There have been two business models that have taken off and flourished in the last decade: one is social and the other is e-commerce. What is happening going forward, in our assessment, is social platforms and e-commerce are fusing together into a business model opportunity—social commerce.
Who is the original social commerce? The direct selling industry. At its core, the direct selling industry is about communities and relationships and social networks. And, of course, it’s linked to COVID. We did it. We were the world’s best to do it offline, and in-person no one can ever match us. The question for us going forward is how do we now help our entrepreneurs and unleash them in building their communities both in-person and online seamlessly? How do we help them with e-commerce shopping and last-mile delivery in the backend so they can focus on providing solutions to their customers and to their communities?
For the past five to ten years, we have been the consumer internet, and now we are becoming the face of the industrial internet.”
—Lam Yu, CEO, Infinitus Global
We’ve had a partnership with WeChat for a number of years. In the middle of the pandemic, we partnered with KakaoTalk in Korea. So we are looking at social platforms. We’re looking at a backend partnership with Jingdong in China and with FedEx on last-mile delivery. We’re investing in technology in our own platforms. The whole idea is to unleash a million entrepreneurs to build communities around their authentic passion for becoming creators. As an industry, we can democratize being a creator and make it available for everyone who wants to be on that journey. I think this is the most exciting thing for direct selling going forward—picking up on trends and then embracing what is happening with this new industry of social commerce. As pioneers, I’m confident we will have millions of entrepreneurs across the world build their communities in-person or online.
Napierski: This is, wholeheartedly, where my heart is at. I loved how you described that, Milind—social platforms and e-commerce coming together. That’s precisely how we look at it as well with social commerce. And we look to great companies like Amway who built this offline model and are leading forward, and leaning into, a digital first. I would add to what you said: the authenticity comes through our form of influencer or micro influencer. I believe that’s a superpower that the direct selling channel has over other brands that are now trying to pivot.
In fact, I was reading a report in which some of the leading beauty and wellness companies talked about how they’re shifting 75 percent of their ad spend to influencer marketing. That’s great, but it’s not authentic. Authenticity is what we add. Authentic social commerce is what we do and what we can do better than anyone else if we embrace that digital first-approach.
Ferreira: One additional feature we could add to that equation is the idea of augmentation. That is, augmenting the power of our distributors or representatives—how much more they will be able to add in those relationships through our best science, best technology. That’s the one element I can keep adding to this equation as I think about the future.
Hoan: The pandemic accelerated digitalization. Direct selling companies, like all traditional retail companies, had no choice but to embrace digital transformation. In the digital world, direct selling can be repositioned as membership-based e-commerce. The e-commerce platform has significantly replaced or surpassed physical retail stock. This situation is happening rapidly during this pandemic period; hence, distributors must adapt in the way they operate and start introducing new members into their company.
Yu: For the past five to ten years, we have been the consumer internet, and now we are becoming the face of the industrial internet. It’s a prominent opportunity for the direct selling industry because in the past, direct selling companies took pride in the fact that there were strong, offline people-connection capabilities with mutual trust and warmth. Now online boasts of speeds. If we can combine the offline warmth with online speeds and industrial connection, the new spaces for industrial connection or internet connection will be created. So the transformation of digital industry may seem to be a slightly technological problem, but the echo is human.
Brännström: Social commerce is one way where the new world really meets with the old world in the sense that direct selling is now converting into a new way of doing business. In the old days, we met physically. In the new world, we’ll be meeting you not only physically, but also virtually. I think that’s where we’ll find the true success is combining the historical experience of social interaction between people with modern technology to make the business as strong as possible. It will be the advantage for the consultants, brand partners, and distributors around the world.
At the end of the day, though, I think it is important to remember that what this is all about is providing great products from great brands to consumers around the world via great independent distributors. This is the truth of the past. It is the truth of today, and it’s the truth of tomorrow.
Barnett: Our industry is so poised to take advantage of this digital transformation, and it is because of how consumer goods went to market in the past. Originally, goods went through retail stores. That was the way consumers came to market. Then the direct selling industry started, and it took in a small portion of the retail sales. Then consumer goods went into the home—mail-order catalogs and home shopping on TV. A little over twenty years ago, e-commerce came along. We are now in this phase of influencer marketing where brands are shifting their dollars to try to get people to talk about their products rather than use their own advertising to talk about their products.
The challenges are macro influencers—celebrities with big followers. The authenticity doesn’t ring true. People know they’re being paid to promote these products. The engagement of micro influencers, people with 100 or 200 followers or 1,000 followers, is four times the level of the celebrity ones. But nobody understands how to engage micro influencers at scale except for our industry. I believe that we are really at the forefront of how consumer products go to market.
I also want to talk about the social commerce because what’s so striking is that, in the United States ecosystem for example, commerce and social are separate. In other countries they’re more integrated. In China, Alibaba and jd.com were the two biggest e-commerce players in the marketplace. And then six years ago a startup called Pinduoduo used social commerce for people to invite their friends to buy together. In the last quarter, it had the highest number of e-commerce shoppers in all of China. It shows the power of social commerce.
So, our channel is at the forefront of how consumers get to market. This idea of the blend of social commerce is the future. We understand how to develop it in an authentic way. And that’s why I think for everybody who’s a representative in our businesses, it’s such an exciting dynamic time, and it’s why I’m so optimistic about our future. It’s very hard for other business models to convert to social commerce, but that’s how we were created. So it’s exciting to see all of us evolve in that direction.
What Is the Future of Direct Selling?
Barnett: To attract new consumers and potential distributors, we may have to change some processes or explain our business in different ways to make it easily understandable. What can we do to tap into a new generation of consumers and a new generation of people looking for alternative ways to earn income? What is going to be most attractive for our future consumers and future distributors?
Brännström: The future of direct selling is always inspiring—and a bit nerve-wracking—because we don’t know what we don’t know. But I believe good products will always attract good people, and a good earning opportunity will always be attractive. One of the challenges in the digital world will be in closing. Direct sellers and social sellers are different from influencers or bloggers because of their ability to close the deal. At the end of the day, selling products is about making closures.
Hoan: Direct selling companies have to leverage off digitalization to pay into the new generation of consumers, as well as those who are looking for income opportunities. In the digital age, there are two groups of people who deserve our attention and support. The first group includes the members and consumers who have joined the company as a result of digital marketing. The second group includes the younger generation who are good at digital operation and digital marketing. The driving factor for this younger generation is usually monetary. If we want to retain these people, we must consider rewarding them for selling or sponsoring.
Barnett: What are you most excited about the future for our industry?
Napierski: The most exciting thing for me is to be part of such a great industry and Association that are in the midst of disrupting commerce. What we’ve talked about is social commerce coming to market, and we are the central driving force for that. I believe that the model we have as a collective industry is what every brand is looking for. It is how consumers prefer to find the products they love. I’m excited about being part of the disruption.
I think we’re just tapping into what people are looking for in the modern world: to work for themselves, to decide their futures, to be the boss of their lives.”
—Magnus Brännström, President & CEO, Oriflame Cosmetics
Ferreira: A few years ago, we were considered an outdated industry. Now we’re in the forefront, on the leading edge of the new way of doing commerce. With outstanding companies and outstanding leaders, I am totally confident that this journey will be extremely exciting for years to come.
Pant: It is unleashing entrepreneurship with social commerce, where any young person just needs three Ps to be successful: passion, positive attitude, and a mobile phone.
Brännström: I think we’re just tapping into what people are looking for in the modern world: to work for themselves, to decide their futures, to be the boss of their lives. Through a direct selling commitment, they can live a fulfilling life by being in the business but deciding what to do with their life and their time, and with whom and where they are working.
I look forward to the future with confidence. I look forward with enthusiasm. I’m eager to see what the future will hold. I think it will be even greater than we think.
Yu: I think the most important thing is that after helping someone change, they can have a different life after being in the direct selling industry. It is very exciting for me to tap into the direct seller’s life and give them a very different life.
Hoan: The future of direct selling is one man or woman, one phone, one world.
WFDSA Goals & Objectives
Barnett: We have an energetic leadership team at WFDSA. As chairs of our Advocacy Committee and Ethics Committee, Ryan and João Paulo are going to share what WFDSA’s goals and objectives are for the immediate future.
Napierski: We’ve all been talking about the amazing work that the direct selling industry as a whole does around the world. There are 125 million people currently engaged in some form of entrepreneurial effort within direct selling. In the US, it’s 60 million people. The US workforce is 168 million, so if you extrapolate that data, that’s roughly 35 to 40 percent of the US workforce. If you apply that to the global population of 8 billion, the number micro entrepreneurs participating in our industry is in the range of 300 to 350 million.
So we really have to ask the question: Why aren’t they yet there? What are the barriers that are causing our industry to not flourish the way we all believe we should? Everything we’re all talking about is what the world needs. They need our products; they need our opportunities. So how do we tell our story better? How do we truly advocate for direct selling as an industry? And I think there are two components to that.
The first is our narrative. How do we describe ourselves to the population for the value that we add as an industry? The second part relates to the behaviors and standards that reinforce that narrative. If we say one thing but do another, it completely refutes the intention behind our work.
And so, the work of the Advocacy Committee is to (1) identify the proper narrative that truly enables new opportunity into the future and (2) align our behaviors and standards to reinforce that narrative.
This has required us to look at ourselves, not just as Association members but also as a broader industry. There is a reason why our reputation suffers and struggles in various markets around the world. There are behaviors and standards not suitable in a customer-obsessed approach that caused our reputation to be what it is.
What’s important for all of us—as companies within the World Federation—is to truly be self-aware, to truly ask the hard questions about what has driven our narrative negatively in the past. We can then contrast those negatives with the positives. We can lean more into those good things that we do to truly define and refine our narrative. Then we can reinforce that narrative with behaviors and standards so independent business owners, consultants, distributors, or representatives can truly exude the goodness of the mission of their companies. Then I think we can make an impact.
Our role within the advocacy committee over the next three years is to put that narrative together, to align it globally, and to ensure it is something that truly can be a global message we can carry out and be a force for good.”
—Ryan Napierski, President & CEO, Nu Skin Enterprises
Our role within the advocacy committee over the next three years is to put that narrative together, to align it globally, and to ensure it is something that truly can be a global message we can carry out and be a force for good.
Ferreira: My ambition is to take ethics beyond compliance. Compliance is an obligation, but as an industry we can go beyond it. The Ethics Committee has split its work along two streams.
One is to raise the bar on compliance. We’re just finalizing an update of the industry risk assessment, which is once again confirming the well-known risks for the industry that affect the narrative. Fraudulent financial schemes, fake promises to direct sellers or to consumers, and labor regulatory issues that again connect to the regulatory community. On that work stream, we’re working on upgrading the standards. We’re giving a lot of effort to improve monitoring and enforcement.
The second work stream is to take ethics beyond compliance. We can do a lot of good for the world, so we’re finalizing an impact matrix that shows the areas we can, as an industry, make significant impacts around the globe.
Barnett: What is so striking about the work our committees are doing right now is the long-term view of our industry being better and increasing our impact and being completely transparent in it. I admire that because I think that’s the way that you evolve from our early founding 100 years ago to where we can truly make the kinds of impact in the societies in which we operate. We have a lot of dedicated professionals who are here to enhance and improve this amazing industry for decades to come.