Direct to Consumer retailers report sales growth of up to 30% following CV19 crisis

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The UK industry body for direct to consumer (DTC) retail, The Direct Selling Association, today reported a surge in sales by many of its members – which include Avon, The Body Shop at Home and Neal’s Yard Remedies Organic – as the impact of the COVID19 crisis continues to be felt by the retail sector.

Susannah Schofield, director general of the Direct Selling Association, said: “Initial indications suggest that consumer demand has increased considerably across many of our member companies as result of the COVID19 situation. It is clear that consumers are looking to alternative channels of retail following the closure of more traditional outlets, and this is particularly true across health, wellness and homecare product lines.”

Additionally, some of the retail body’s members in the beauty space are reporting early indications of the Lipstick Effect starting to take effect.

Direct selling is where products are sold directly to consumers outside of a fixed retail environment. This could be via ‘Tupperware-style’ parties, face-to-face, online or through catalogue distribution. Schofield adds: “All sales are currently taking place online following COVID19, including the hosting of virtual Tupperware-style parties by members such as The Body Shop at Home and Neal’s Yard Remedies Organic, which bring friends and family together for an online personal shopping experience and a bit of light-hearted fun.”

Andy Smith, general manager, Amway UK & Ireland, which sells health, beauty and homecare products and has operated in the UK DTC space for over 45 years, comments: “We have seen a 30% increase in product sales this March compared to March 2019. The highest demand has been for our wellness range, particularly vitamins and supplements, as people look increasingly to support their health at the moment, as well as general homecare items.

“Our expectation is that current growth trends will be sustained as consumers look to shop from home during the current lockdown, but with the personal advice and recommendation that this form of retail is famous for.”

Over a third of the UK population (34%) have bought products this way and the latest figures show that an estimated £2.67 billion of product sales are made through the retail channel each year.

Schofield continues: “A further factor that many of our members are expecting to see take effect over the coming months is a growing number of people looking to earn additional income as the full financial impact of the COVID19 crisis is felt. It’s already clear that the sector’s army of side hustlers are increasing their business activity, perhaps to compensate for loss of earnings elsewhere, and the majority of our member companies are reporting increasing enquiries by those interested in setting up a direct selling business. This bolstering of independent representatives is likely to help sustain current growth over the longer term.”

Direct selling operates in a similar manner to a franchise, but start-up fees are considerably lower, and it is often free to get started. There are currently 563,000 people working in direct selling in the UK, and a steady rise in numbers over recent years has been attributed to the increasingly mainstream awareness and acceptance of the influencer economy.