Guest author Peter Maddox is the President of the Direct Sellers Association of Canada. Peter has extensive experience in the association world and the marketing industry. Over his career, he has managed files as diverse as government relations, regulatory affairs, marketing analysis, member engagement, communications, business development and sales. Originally from Australia, Peter has an MBA from Chifley Business School and a Marketing Degree from the University of Tasmania.
New Data Reveals Canadian Direct Selling Grew Significantly in 2020
The recent release of Canadian industry statistics for 2020 has brought good news. What a difference 15 months makes!
In March last year, there were so many unanswered questions about the direct selling industry and the world in general. So, to be at a point in mid-2021, where we are able to publish data showing record Canadian sales growth in 2020, seems a little surreal. In fact, retail sales for direct selling companies in 2020 were up 26% over 2019 numbers, which in retrospect is hard to believe.
In mid-March of 2020, international flights were grinding to a halt, the NBA had just cancelled games, and governments were scrambling to understand what was happening and how to deal with it. Similarly, the challenges for direct sellers seemed equally large and potentially existential. Among the questions many of our members asked were:
- Will my distribution center be allowed to stay open?
- Will my consultants be interested in moving to fully online selling?
- Will I be able to source raw materials from overseas?
- Without incentive trips and conferences, how will we connect with and reward people?
- Will consultants be drawn to government support programs, instead of entrepreneurial activities?
- Will my staff do any work at home?
And most importantly:
- Will my company even be able to keep its doors open for the next six or twelve months?
As the President of DSA Canada, I heard all of these questions and didn’t necessarily have all the answers. But through the hard work of our members, many calls with government officials, support from industry suppliers, and some aspects of the pandemic that actually favoured our business model, we have arrived at today.
So, here are some of our topline numbers from our 2020 industry survey:
- Retail sales grew 26% over 2019, to C$4.15 billion. 2020 was the largest ever year, in dollar value, for direct sellers in this country. This growth is significant, and also compares favourably with growth in other direct selling markets.
- The number of Canadians signed up as independent sales consultants rose to 1.39 million, up 20% over 2019. This total number is comprised of 5% full-time business builders (or those working 30 or more hours per week), 70% part-time business builders (or those working less than 30 hours per week or more) and 25% other independent representatives (or those who are not active).
- The percentage of the independent sales force in Canada who are women rose by 2%, to 84% overall. A small rise, but significant. Perhaps this is a sign of the “she-cession” that has been discussed as one of the pandemic impacts. Hopefully, it is also a part of the “she-covery”, which is helping to lead us out of our challenges.
It is also interesting to consider one other part of the industry that is evolving at this point, that being the existence of preferred customer programs. As of this survey, just over half of DSA member organisations, or 53%, have a preferred customer program, and this accounts for 11% of their sales. This will likely be an area where we continue to see growth in future years.
Why did sales spike like this? I have a few thoughts:
- Consumers wanting to shop safely from home; to buy products that were important to them during a pandemic (such as healthcare products and kitchenware); and to support the entrepreneurial business of their families, friends and social circle;
- People looking for additional earnings opportunities; perhaps rethinking their careers; and spending more time working on their existing direct selling business; and
- Direct selling companies having effective and established digital platforms for carrying out commerce (or at least being able to speed up an existing digital transition)
I recognize that not all companies experienced the same level of growth and many did struggle with significant pandemic-related challenges, but overall, the industry had a phenomenal year. The next question many of our members are asking is, can these sales numbers be maintained and can industry participants continue to post year-over-year growth? I know that this is something that direct selling companies are working on right now, by building connections with newer independent consultants, altering product selections to suit our new reality, finding innovative ways to recognize success and by diving headlong into the new digital reality.
DSA Canada will continue to work with members and stakeholders to set the table for success. We encourage all direct selling companies to participate fully in industry research efforts, as with verifiable numbers comes advocacy power.
I can’t wait until this time next year, when we release our 2021 numbers. Then we will have an even better understanding of how this crazy time in our lives has impacted direct selling in Canada.
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