2014-02-25 20:40:02 - Direct Selling in the US - a new market research report on companiesandmarkets.com
Mary Kay and Avon, both heavyweights in beauty and personal care retailing, remain the leaders in the United States direct selling market, both with value shares of 8%, in 2012. Although a pioneer in the direct selling business, Avon has experienced increased difficulties in recent years and experienced an erosion in its share. Mary Kay, on the other hand, benefited from increases in both its sales force and overall sales in 2012, and it seems that its focus on product innovation, sales force development, and personalisation is paying off.
While the most prevalent form of direct selling is person-to-person, the party plan format continues to grow in popularity. Direct selling agents host parties that feature elements such as spa treatments, teeth
whitening, wine tasting or cooking lessons. Comprised almost exclusively of women, parties are held in the home, where an agent, a hostess and her group of friends gather together in a relaxed environment. While agents certainly look to make sales and/or recruit others to make sales as their respective downline, potential consumers can enjoy the experience of the products, free samples and an inexpensive form of entertainment, while spending time with friends.
Direct selling is expected to decline by 1% in constant value terms over the forecast period to fall to US$22 billion. Despite some renewed interest in the channel from consumers seeing either a new source of income or the savings available from personal consumption, the long-term trend of decline is predicted to continue thanks to increased competition from other channels in the digital age.
- Direct selling value sales fall 2% in 2012 to reach US$23 billion
- The direct selling industry continues to face consumer scepticism over the merits of its model
- Consumer healthcare direct selling sees the highest sales growth of 5% while media products direct selling declines 8%
- Mary Kay and Avon Products remain the top two players in direct selling with 8% value shares each in 2012
- Over the forecast period, direct selling sales are expected to decline by a CAGR of 1% in constant value terms
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