The UK industry body for Direct to Consumer (DTC) retail, The Direct Selling Association, today released new data outlining significant growth in the channel in 2020. The findings come as brands including The Body Shop and Amway spoke of record sales through their direct selling divisions over recent months during an industry roundtable event.
In the new survey of its members – which also include Usborne Books at Home, Avon and Neal’s Yard Remedies Organic – The Direct Selling Association reported that respondents outlined an average 45.5% growth in sales through the channel in 2020.
During an industry virtual roundtable event held this week Chaired by retail analyst Natalie Berg, CEOs from four of the leading DTC brands in the UK discussed 2020 growth trends in the sector, and the outlook for 2021.
Highlights of the discussions included:
- The Body Shop’s direct selling division, The Body Shop at Home – reported that sales in April / May 2020 were similar in volume to a full year’s sales three or four years ago. The division has also seen a significant increase in its independent salesforce in the UK, with Consultant numbers now approximately 60,000, making it one of the largest direct selling brands in the UK.
- Amway UK & Ireland – November 2020 was the strongest sales month for the business in over 15 years, according to General Manager Andy Smith. The company’s UK turnover is set to close approximately 20% up on 2019 levels following a major uplift in sales through 2020.
- To watch the full recording of the roundtable event, please see here.
Natalie Berg, Founder of NBK Retail, who Chaired the DSA roundtable event, said: “2020 has been an immensely disruptive year in retail and direct selling is emerging as one of the big success stories of the last few months. Many DTC brands have demonstrated successful ‘pandemic pivots’ to accelerate digital transformation and adapt the way they do business to suit the changing way in which we are all shopping now in response to the Covid-19 situation. Direct selling will certainly be a channel to watch in 2021.”
Susannah Schofield OBE, Director General of The Direct Selling Association and one of the speakers at the roundtable event, comments: “We anticipated reasonably strong growth for direct-to-consumer retail at the start of 2020, but no-one could have predicted what happened following Covid-19. Despite considerable uncertainty for many brands in March and April, direct-to-consumer retailers rapidly adapted to serve customers when other more traditional forms of retail were closed during lockdown.
“With low overheads and the ability to be far nimbler than many traditional channels, I expect to see strong sales via the channel into 2021, particularly given the considerable growth in people joining brands to earn this way as independent salespeople.”
The number of people joining DTC brands to earn additional income by becoming independent salespeople was outline by the survey respondents to have increased by 46.4% during 2020.
The direct-to-consumer division of Usborne Publishing (which won Children’s Publisher of the Year at the 2020 Bookseller Awards), Usborne Books at Home, saw a 101% increase in people joining its business during 2020. Consultants earn approximately 24% commission on each product sold.
Direct selling is a £2.67billion-a-year channel of retail where products are sold directly to consumers outside of a fixed retail environment. This could be via ‘Tupperware-style’ parties, online or through catalogue distribution. Individuals act as independent salespeople and earn through commission paid on product sales. The latest data (pre-COVID-19) estimates that in the UK approximately 563,000 people earn this way, usually on a part-time basis to supplement household incomes; the average amount earned in the UK through direct selling is £373 per month.
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.