Table of Contents
Executive Summary
-
- Market overview
- Top takeaways
- Competition in the larger market poses a threat to direct sellers
- Don’t forget about men
- Product expansion and innovation are necessary to compete and stay relevant
- The issues
- Peer-to-peer selling presents trust and credibility challenges
- Purchases in the general beauty market signal shoppers have unmet needs at direct sellers
- The opportunities
- Better informing and inclusive recruiting can serve more consumers, particularly men
- Innovation in marketing and products can prevent leakage
- What it means
The Market – What You Need to Know
-
- A chance to drive growth among underserved consumers
- Social media: a tool for communication and commerce
Market Perspective
-
- What is multi-level marketing within the beauty industry?
Market Factors
-
- Shared gender interest signals potential room for growth and a need for tailored targeting
- DPI is favorable, but how consumers spend their money varies by gender and age
-
- Figure 1: Splurges, by gender and age, August 2017
- Social media engages more consumers, introduces new competitors
Key Players – What You Need to Know
-
- Emerging brands appeal to a younger, overlooked consumer
- Despite partnerships and other evolution efforts, direct sellers face growth challenges
- Digitally native brands make selling more direct with technology
What’s Working
-
- Avon’s efforts to evolve pay off with shoppers
-
- Figure 2: Avon Insider Instagram post, June 2018
- Emerging brands’ efforts to connect with young men are paying off
-
- Figure 3: Arbonne Instagram post, May 2019
- Figure 4: Beautycounter Instagram post, January 2019
What’s Struggling
-
- Brands, new and old, face growth struggles in a crowded market
What to Watch
-
- Digitally native brands explore ways to use technology to sell even more directly
The Consumer – What You Need to Know
-
- Legacy brands are favorites, but younger brands resonate with young shoppers
- Direct sellers face competition from mass merchandisers in stores, Amazon online
- Fewer items purchased through direct sellers than elsewhere in the beauty market
- Embracing the social nature of shopping and improving the experience will lead to repeat purchases
Retailers Shopped
-
- Key takeaways/Analyst POV:
- Legacy companies see highest share of shopping
-
- Figure 5: MLM retailers shopped, July 2019
- Emerging brands are winning with younger males
-
- Figure 6: MLM retailers shopped, by gender and age, July 2019
- Figure 7: Arbonne YouTube tutorial, April 2016
- Where else are customers shopping in the beauty market?
- General merchandise and specialty retailers are biggest in-store threats
- Mass and Amazon are winning online trips
-
- Figure 8: Retailers shopped (general), in-store versus online, July 2019
Shopping Method
-
- Key takeaways/Analyst POV:
- Online is the preferred method of purchasing
-
- Figure 9: Shopping method – In-store and online – (NET), July 2019
- Older women rank direct sales as number one
-
- Figure 10: Shopping method – In-person and online, by gender and age, July 2019
- Competitive leakage occurs among older women in-store at mass and younger men at Amazon
-
- Figure 11: Shopping method – (NET any rank) – In-store and online, by gender and age, July 2019
- Legacy brands see traffic through social media
-
- Figure 12: Avon Instagram post, August 2019
- Figure 13: Mary Kay Instagram post, June 2019
-
- Figure 14: Mary Kay Instagram post, June 2019
Items Purchased
-
- Key takeaways/Analyst POV:
- Skincare and cosmetics are top purchases through direct sales companies
-
- Figure 15: MLM items purchased, July 2019
- Older women represent an opportunity for basket building
-
- Figure 16: MLM items purchased, by gender and age, July 2019
- MLM purchases compared to general beauty purchases
-
- Figure 17: Items purchased (general), July 2019
Brand Awareness
-
- Key takeaways/Analyst POV:
- Awareness mirrors retailers shopped
-
- Figure 18: Brand awareness, July 2019
- Emerging brands have high awareness among young moms, but might be isolating older women
-
- Figure 19: Brand awareness, by parental status by gender, July 2019
Types of Shoppers
-
- Key takeaways/Analyst POV:
- Despite evolving beauty routines, most shoppers remain loyal to brands and products
-
- Figure 20: Types of shoppers, July 2019
- Younger shoppers swayed by expert or influencer recommendations
-
- Figure 21: Sephora email campaign, February 2019
- Figure 22: Types of shoppers, by age, July 2019
- Young men enjoy their beauty routines
-
- Figure 23: Types of shoppers, by gender and age, July 2019
Shopping Experiences
-
- Key takeaways/Analyst POV:
- Improving the experience will elicit repeat purchases
-
- Figure 24: Shopping experiences, July 2019
- The social nature of shopping direct sellers appeals to parents
-
- Figure 25: Shopping experiences, by parental status, July 2019
- Young men are more likely to primarily purchase through direct sellers
-
- Figure 26: Shopping experiences, by gender and age, July 2019
Attitudes toward MLM Companies
-
- Key takeaways/Analyst POV:
- Shopper sentiments of direct sales brands are mostly positive
-
- Figure 27: Attitudes toward MLMs, July 2019
- Men appreciate socializing and women seek employment opportunities
-
- Figure 28: Attitudes toward MLM companies, by gender, July 2019
- Younger consumers more wary of direct sellers
-
- Figure 29: Attitudes toward MLM companies, by age, July 2019
Appendix – Data Sources and Abbreviations
-
- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Back to top