In the 1960s Oriflame pioneered the market for skincare products by setting up a direct selling organization, based on the party plan concept where a trained consultant demonestrated the products to small groups of sustomers in their homes. At the same time ther was no equivalent range of products available in retail stores.
Over a period of ten years Oriflame created a new sector of the cosmetic toiletries and perfume (CTP) market with a steady demand for repeat purchases. The inevitable result was that what had originally been a novel idea became an established and significant product line where Boots and other majojor retailers were able to capture repeat purchase demand.
This is an accepted challange faced by all DSOs who pioneer and create new markets. In the case of Oriflame, the company reacted by widening its products range and abandoning its reliance on demonstration in favor of a catalogue, which was better able to cater for repeat business.
Novelty is rewarded with consumer demand, as much by the way a product is sold, as the product itself.
Elismann is a German company specializing in up market frozen foods and which started trading in the Uk in 1990. Salespeople who operate on full-time, self-employed franchise basis, start their business by distributing catalogues in an allocated territory and collecting orders, which are later delivered, at as agreed time, by the franchise in a freezer van provided by Eismann under the franchise agreement.
Certainly the products on offer are distinctively different from the mass market brands available in food stores, but the novel approach to distribution that has accounted for the success of business.
Recently a number of other direct selling food companies have adopted the same approach. Even the major multiple grocery retailers are now testing direct sales as a way of extending their market offer. In a collaborative venture with Sainsbury’s, Flanagans offer customers in the London area the opportunity for home delivery of a range of top-selling grocery lines with a telesales ordering system.
The opportunity to sell novel products is an important factor in another respect,. that is motivating salespeople. In experienced direct sellers,when they approach a past customer for a repeat order , are always a little nervous that they will face rejection. For those DSOs that have an extensice product range it is, in theory at least , an illogical fear; it is almost certain that the business has something else on offer that is of interest to the customer.
The additional item was not purchased on the first occasion for reasons that will be explained later in this chapter, but it is difficult to explain those reasons to every direct seller. An easier solution is to make frequent of new lines to the range on offer. Doing, so encourages direct sellers, gives them something to talk about and serves to attract the attention of the customer.
Another useful technique available to DSOs, is to give a novel product a ‘rest’ amd to reintroduce it at a later date. The inherent turnover rate of salespeople is such that after a year or so, a reintroduced product will once again be novel to a large proportion of the salesforce and to their customers.
Reference: Direct Selling: From Door to Door to network Marketing: Richard Berry.