There is a BIG shift in the Direct Selling industry towards an Affiliate Model of E-Commerce. This new, emerging hybrid of Direct Selling and Affiliate Marketing will become the norm in just a few short years.
The Next Version of Direct Selling?
An Affiliate Model (Click through Model) is the next version of the direct selling model.
In this e-commerce relationship, an online merchant agrees to pay an associate or an affiliate in exchange for promoting or providing an advertisement, which links to the seller’s site.
Such sales are generated as a result of a consumer clicking an advertisement from an affiliate website or app to the seller’s store.
This results in a pre-decided upon commission for the affiliate partner. This arrangement provides a revenue stream for affiliates, and at the same time provides the seller, who owns this network, high quality, new traffic.
This cuts customer acquisition costs for the seller and therefore allows them to directly target their desired audience.
Spurred by the strong growth of smartphone users and hence internet users, there are many websites, apps, and blogs, which are using affiliate marketing to monetize their traffic.
With time, this model is growing as a strong marketing channel across the world.
As consumers are adding various devices, their shopping experiences are increasingly becoming digitally-led; a great deal of innovation has emerged in both direct and affiliate marketing to keep pace with customers’ evolving habits and behaviors.
The Emergence of Millennials and Generation Z
One has to wonder then how has this massive trend gone somewhat unnoticed until now?
It’s because it’s driven by the emergence of the millennials and Gen Z. Everything we know about the Millennials and Gen Z tells us they are perfect for the Direct Sales model, yet, most existing direct sales companies have failed to take advantage of this fact. Most of what the Direct Selling Industry offers them has little value, and worse, detracts because it’s too “MLM-y.” Millennials don’t like most MLMs and they really don’t like most MLM practices. See the Mom’s Parody of MLM video that went viral a few years ago.
This generation was born into the world of rapid growth and is more involved with entrepreneurship and technology. Millennials don’t believe in rigid rules or cubicle offices, but they are always “on” and ready for customers.
Marketing is being redefined by this generation, which has taken it by the tail as soon as social media emerged from the technology world. Entire customer care operations are being managed with mobile devices. The executive answering your questions on FB might be sitting in his living room on the sofa with a laptop and smartphone.
Many of this generation’s entrepreneurs have emerged as influencers with a niche in a particular segment.
A girl living next door to you might have a million followers on her blog which specializes in fashion trends or a son of your friend might be tweeting to the world with reviews on mobile phones.
What this generation, the under 35-year-old wants are more affiliate options, blended with direct selling principles to support their preferred ways of selling and networking.
They do physical, in person parties at a far smaller rate than Gen X’ers or Baby Boomers.
Instead, this emerging young group focuses on their online social influence to drive personal retail sales. They have a topic, a niche, where they have a loyal following that trusts their opinions and recommendations. Their priorities are tilted more heavily towards personal influence and retail sales and much less towards recruiting and team building. This shapes the model.
Consider an influencer who focuses on vegan eating, armed with the right tools and training, they can sell millions of supplements.
As a business, we get far higher retail sales per distributor and a savvy marketer.
All we have to do as an industry is to take the best of both the affiliate and direct selling models and focus on that. Unlocking this is the key to continued growth of the direct sales industry in the coming years.
This is the time for a hybrid marketing model, with ingredients of both direct marketing and affiliate networks.