In 100 Words: Looking Ahead To 2014
As the New Year approaches, it would be interesting to hear from some of the distinguished persons from the industry what they see coming in 2014.
“Looking from your perspective, what will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.
You will see below the diversity in the responses, that in my opinion, reflects the richness of our industry.
“Whilst social media is one of the most powerful tools of communication that we can use in direct selling, we need to be cautious that this is not being used by the sales force to replace the faced to face relationships that are the absolute strength of our industry. Whilst understanding how difficult it is to approach new people for either a sale, booking a party, or signing up a new recruit – the skills learned from actually performing these tasks, and the confidence gained from it – are immeasurable! This is what the drives a business forward and gives it a point of difference to other industries. The threat is if, as an industry, we don’t take responsibility for building those relationships and developing our people, we could ultimately have a sales force which consists of mainly salespeople, an increased attrition rate as no loyalty is built, and fewer business builders as they don’t have the knowledge, skills or confidence to grow their teams.”
Oscar Cano Arias, Managing Director of Direct Selling Europe:
“The new year ahead will be crucial for the sector, for many reasons. From the legal perspective, 2014 will see two important rulings that will affect the whole industry: first, the final decision of the Court of Commerce of Belgium on the issue Herbalife/pyramid schemes; second, the interpretation of the EU Court of Justice about the prohibition of pyramid schemes in the Unfair Commercial Practices Directive. Furthermore, it seems more and more likely that the US FTC might initiate action against Herbalife following the numerous complaints presented since end of 2012. From the regulatory perspective, the EU will have a new law on Consumer Rights, while the European Commission will propose new legislation affecting the sector. Last but not least, the EU will have new Commission and Parliament after the Summer 2014. Direct Selling Europe will work with all new key decision makers to ensure that the interests of well reputed and sustainable direct selling companies continue well preserved.”
Jeff Babener, Legal Counsel at Babener and Associates:
“As one American troubadour notes, “money talks, but it can’t sing and dance, and it can’t walk…” For the direct selling industry, in 2013 the markets and money managers have swung to the positive by billions of dollars. But industry observers always await for the “other shoe” to drop; lack of legislative and regulatory clarity means that the industry is only as secure as its last court opinion. Until federal legislation and the FTC rules are amended to recognize that distributor “personal use” of products is within the paradigm of legitimate direct selling, as opposed to pyramid scheme, the cloud will persist.”
“The World Federation of Direct Selling Associations has chosen Brazil to host in 2014 its 14th World Congress, entitled “Direct Selling: The Original Social Network”. The conference will be held in Rio de Janeiro between November 10 and 12 and will focus on future opportunities for our industry, such as the revolutionary role of digital social media. Besides that, a comprehensive program of social and cultural activities has been planned to highlight the diversity and energy of Brazilian people and market. We are confident that this Congress will be a milestone in the history of Direct Selling. Come to Rio!”
Jennifer Fong, Managing Principal at Luce, Murphy, Fong and Associates:
“I believe that the biggest threat (and opportunity) facing the direct selling industry in 2014 is the public perception of our business model. This past year’s onslaught by Bill Ackman brought to light something that has brewed under the surface for a long time. The attack could not have gained the traction it did without a lot of fuel, which was provided by people who have had less than positive experiences with our industry. Our business model provides great opportunity, but because it is so accessible there is also more opportunity to fail. We have to be sure people understand what they are getting into before they buy their kit. It is now more important than ever to build relationships with external stakeholders (academics, consumer protection groups, entrepreneurial and small business advocates, etc.) while demanding ethics in the way we conduct ourselves. When unethical people exploit others through the umbrella of direct sales, the entire industry is tarnished. We must be very honest about what this industry, and our opportunity, is and isn’t.”
Jonathan Gilliam, President and Founder of Momentum Factor:
“The use of the Internet and social media by the field combined with increased regulatory scrutiny has become a significant industry challenge. Not only must companies contend with risks in the business model, they now must also search out, identify and enforce false claims and policy violations from the field across the wide expanse of the Internet. It is a huge challenge and requires new ideas, training and technology in communication and compliance departments.”
John Holloway, Executive Director of Australia Direct Selling Association:
“I am confident about our industry’s performance in 2014 and beyond. We have business models that are bringing our channel’s relationship and experiential selling strengths to an omni channel presence. We have strong performances in product innovation and niche markets. And our systems offer life and work balance for a demographically diverse sales force. With this, public acceptance and use of our channel, our sound economy and increasing consumer and business confidence our direct selling future looks good. “
Michelle Larter, Worldwide Director Direct Selling at IMN:
“In 2014, one of the biggest threats to the direct selling industry will be the increased difficulty of connecting with twenty-something’s on social channels. As their parents and grandparents now use Facebook, Twitter and the more public forums, this younger generation is now more conscious of what they are saying on these channels, retreating to the use of more private social connectors, like Snapchat. The biggest opportunity, well really necessity, in 2014 will be mobile. eMarketer expects consumers to make nearly $87 billion in mobile purchases by 2016—direct sellers need to ensure that their websites and communications are mobile-compatible. “
Joe Mariano, President of the U.S. Direct Selling Association:
“Direct sellers face both a threat and an opportunity – and they come from the same circumstance. Over the last year, the myths, misunderstandings and even misrepresentations that have bedeviled us for years have arisen again in the form of self-interested attacks on some very well known companies. The threat is that those myths, misunderstandings and misrepresentations might gain traction and further confuse the public, investors and regulators about how truly wonderful direct selling is. Yet the opportunity arises from the same challenge – for we are given the chance to better educate and inform these same audiences about us. Because of the current environment, these audiences are paying more attention then ever, and we have one great advantage. Our story, of tens of millions of lives changed, of a business model suited for the 21st century, and of companies that are committed to treating their customers and salespeople impeccably. We have the truth on our side!”
Tamara Shokareva, President of the Russian Federation Direct Selling Association:
“I am proud to admit that direct selling industry in Russia grows dynamically and promises sound sale prospects for the end of 2013. However, we still face several ongoing problems and foresee that some of them will remain pending in 2014. Thus, mass media outlets sometimes wrongly labels dishonest retail companies with bad reputation as direct selling companies that is not true to fact and causes misunderstanding of Russian direct selling industry and its companies. Consequently, in the up-coming 2014 DSA of Russia will continue its project aimed at educating consumers and press about existence of various legal forms of trade and direct selling as one of them to fight false perception of our industry and to provide comprehensive information on direct selling.”
Paul Southworth, Director General of the UK Direct Selling Association:
“Looking ahead to 2014, I am filled with much optimism for the Direct Sales Industry. The economy is recovering well and we are receiving many positive reports from member companies on their key indicators of recruitment, orders and sales, even including one or two exceptional success stories. The major threat continues to be the negative media coverage surrounding short sellers and their malicious attacks for self gain on major DS companies in the USA. 2014 demands a strong show of solidarity from us all, to defend our reputation and prove to the world our strong ethics and the terrific opportunity we offer to all.”