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Michael O. Johnson Reassumes Herbalife CEO Role Following Goudis Departure

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Herbalife Nutrition Ltd. announced that effective immediately, Michael O. Johnson, the company’s executive chairman, will reassume the role of CEO.

The Board of Directors of Herbalife Nutrition Ltd. Made the announcement that Johnson will serve on an interim basis following the resignation of current CEO Richard Goudis.

Johnson, who led the company as its chief executive officer from 2003 to 2017, will oversee the operations, along with other senior executives, and continue to drive Herbalife Nutrition’s strong performance and growth trajectory. Pursuant to the Board’s succession plan, and to ensure an effective and orderly transition to a permanent CEO in the future, the Board expects to select the permanent CEO from the company’s proven senior leadership team.

Goudis’ departure is not due to any issues regarding the company’s financial reporting, but pertains to comments which recently came to light, made by Mr. Goudis prior to his role as CEO, that are contrary to the company’s expense-related policies and business practices. The comments made were inconsistent with Herbalife Nutrition’s standards and do not reflect the company’s culture.

The company today also announced preliminary volume point results for the fourth quarter 2018, which were up 11.6 percent worldwide from the same period in 2017 and reaffirmed its initial full year 2019 guidance as announced on October 30, 2018, thereby demonstrating the company’s consistent and continued confidence in the business moving forward.

Stella & Dot to Exit European Market

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According to a BBC report, US direct seller Stella & Dot is ending its operations in Europe.

Several UK sales reps, some of whom host parties to sell jewelry, say they have been messaged by the firm to say it has been hit by declines in the value of the pound and euro.

Messages have been posted online by the sales reps from chief executive and founder Jessica Herrin, who founded the company in 2003 and also founded WeddingChannel.com.

Herrin says the once profitable European business is now operating at a loss.

“Sadly the market conditions in Europe have become very difficult,” she wrote. “In the last few years the British pound and Euro have devalued against the US dollar by almost 20 percent, causing a deep decline in our margin, whilst at the same time operating costs have increased.”

Herrin also wrote that the decision to close had been taken with a “heavy heart” and after “countless deliberations” and that it was of “utmost importance” to exit gratefully.

UK sales representatives, known as stylists, will be able to continue to sell products and earn commissions until April 7.

DSA Establishes Third-Party Self-Regulatory Program

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The US Direct Selling Association (DSA) has announced that its Board of Directors unanimously approved the establishment of a third party self-regulatory program.

The Direct Selling Self-Regulatory Council (Direct Selling-SRC), which will be administered by the Council of Better Business Bureaus (CBBB), is designed to ensure high standards of integrity and business ethics which remain the guiding principles for all direct selling companies in the marketplace, regardless of DSA membership.

The Direct Selling-SRC will encompass active monitoring of the entire direct selling marketplace, including websites and social media of direct selling companies and their independent sales forces in the areas of income representations and product claims. In addition to a new process of investigating and reporting potentially non-compliant companies to the appropriate government agencies, the Direct Selling-SRC program administrators will also manage consumer/company complaint resolution. The program will also include a competitive challenge process, enabling independent companies to identify issues for the Direct Selling-SRC to review.

“We are proud to announce the creation of this program with the Council of Better Business Bureaus (CBBB),” said Joseph N. Mariano, president and CEO of DSA. “It was imperative the DSA partner with a third-party, independent organization such as the CBBB to ensure the enforcement of business standards and meet our objectives for self-regulation. Direct sellers are America’s original entrepreneurs with unique opportunities to connect with customers, as well as pursue independent businesses. Along with that unique opportunity is increased responsibility. Our salespeople perform demonstrations person-to-person frequently in the home and we have long been aware of the additional accountabilities for our companies and salespeople to ensure trustworthy, reliable experiences. Our top priorities continue to be protecting consumers and promoting our viable, time tested retail channel.”

Mariano continued, “We know that direct selling has sometimes suffered from perceived problems, occasional bad actors, and others who pretend to be legitimate. We have decided to address these issues directly, by holding companies to the highest standards with an effective third-party regimen.”

Lee Peeler, executive vice president of CBBB for National Advertising Programs, described the Direct Selling SRC, “The new program is a combination of a strong legacy with the ability to evolve so that it can keep pace with marketplace dynamics, respond to consumers’ needs and expectations, and complement law enforcement as the hallmarks of successful self-regulation.

“The program is built on the same strong foundation as other CBBB-administered self -regulation programs: clear standards, independent administration, transparent decision making and accountability for non-compliance,” stated Peeler in discussing how the program will align with existing CBBB operating units. “The Direct Selling-SRC will have all four of these components, will be backed by robust online monitoring, and will be applicable to DSA members as well as non-members. This will go a long way to ensure higher levels of compliance with best practices and help elevate the industry’s reputation.”

Peter Marinello, vice president of CBBB, will serve as executive director of the Direct Selling-SRC, overseeing the program and its staff. He brings a wealth of legal and self-regulatory experience from the National Advertising Division and the Electronic Retailing Self-Regulation Program.

Marinello complimented the DSA leadership for its efforts on co-development of the Direct Selling-SRC. “Good self-regulation starts with leaders in an industry with faith in their commitment to truthful and honest advertising. I am excited to be part of this new important chapter for direct selling.”

While the DSA has had a reactive, self-regulatory program for its members for nearly five decades, the creation of this new, proactive program represents a dramatic step forward to raise the bar for all direct selling companies. The program’s foundation is based on guidance from the regulatory community including the Federal Trade Commission (FTC), CBBB, outside experts and DSA’s leadership.

“DSA members have long ascribed to our Code of Ethics, and that program will continue to be enforced by our Code Administrator,” said Mariano. “However, the Direct Selling-SRC will allow for a more comprehensive review of the marketplace as well as to ensure truthful, accurate content and representations by members and non-members. We are in an exciting time that will eventually bring increased accountability for the entire direct selling industry.”

DSA is the national trade association for companies that offer entrepreneurial opportunities to independent sellers to market and sell products and services. The DS-SRC launched on January 4, 2019. More information on the new entity can be found here.

Customer Care: 5 Trends for 2019

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A recent business article by Twitter noted customer care trends from 2018 that they expect to continue to grow in 2019.

Direct Messaging

More consumers are connecting with companies through direct messaging (DM’s) than through more public methods like tagging in a Tweet. According to Sprinklr, 80 percent of consumers engage with brands online, and 54 percent of customers prefer social messaging channels for care instead of phone or email.

It’s easier than ever to reach out privately. With more businesses enabling DM’s on their accounts, customers can private message companies even if they don’t follow each other. DM’s allow for longer messages and don’t limit text to 140 characters, and consumers can upload photos, videos and sensitive personal information without broadcasting it to the world.

Customer Care Bots

Customer care bots, or chatbots, allow companies to offer 24-hour, automated replies that can instantly help customers navigate a technical issue or even order their lunch. Chatbots are a quick-and-easy (not to mention cost-effective) solution for offering simple answers to common questions, but if they aren’t implemented with a strategy, they can feel clunky to people used to real-life interactions.

Chatbots may not have been the solution of 2018, as was widely predicted, but they aren’t going anywhere. Expect them to keep growing and evolving. According to a CNBC report, chatbots could cut business costs by $8 billion by 2022.

Social Care Strategies

There’s been a lot of hype around adopting social media customer care strategies, but now with most brands establishing their social care strategy, there is a move towards personalization. Companies are focusing on more human interactions like active conversations through messaging while adopting a more casual tone and using emojis.

Putting more energy into social care strategies can also mean major savings. According to the Online Marketing Institute, it costs $1 to solve a customer service issue on social media compared to customer call centers, which can cost six times as much.

Customer Care Agents

Marketing and PR departments have long used social data to influence decisions, but now customer care teams are using it to shape interactions. According to Sprinklr, brands generally spend 98 percent of their time and resources trying to reach customers, and only 2 percent on customer care. But now it’s easier than ever to use technology to track mentions and reply quickly to both positive and negative comments—a strategy that shows the world how much a company cares.

Social data also allows care teams and advertisers to work together and deliver more relevant ads. Pinpointing someone’s unique interests or needs can help a brand deliver ads that matter to them, like focusing on a product’s eco-friendly attributes instead of serving a more general ad, or addressing a specific comment or complaint.

Loop Loft used to broadcast the same message across social channels, but when business stagnated, it turned to social data for insights. A few months after teaming up with Sprinklr and personalizing social media ads, Loop Loft experienced a 400 percent increase in ROI.

Customer Care the New Marketing

With consumer interactions more public, customer care is becoming the new marketing. It’s not that one can replace the other—it’s that they’re now working together instead of in silos.

Feedback often appears as public comments under social posts and care teams are seizing the opportunity to actively find them and offer public, personal responses. When it’s done well, word spreads.

Twitter noted that with more than 3 billion people on social media this year, it’s natural that more consumers are using social media to connect with businesses when they have questions, compliments, or complaints. Customers expect the ability to connect with companies online, which means more customer service teams are turning to social media as their primary way of reaching out.

Avon to Sell China Manufacturing Operation

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Avon Products, Inc. (AVP) announced it has entered into a definitive agreement with TheFaceshop Co., Ltd., for its manufacturing operation in China.

TheFaceshop Co., Ltd., a subsidiary of LG Household & Health Care Ltd., one of Asia’s largest consumer goods and beauty companies, will acquire all of the shares of Avon’s Beauty manufacturing operation in Guangzhou. Net proceeds to Avon will be $44 million.

The companies also agreed to enter into a manufacturing and supply agreement, under which the Guangzhou factory will manufacture products for Avon’s fast-growing Chinese business and other markets, while maximizing the capacity of the plant for its own production. Avon’s associates at the facility will remain with the operation.

These agreements are another step in Avon’s strategic shift to opening up its business mind-set with best-in-class partners to efficiently manufacture and deliver products in service of the millions of beauty entrepreneurs and their customers around the world.

“This transaction is a significant step forward in our efforts to ‘Open Up Avon’ by operating more efficiently, with a leaner, more agile global infrastructure,” said Jan Zijderveld, CEO of Avon. “This agreement provides us with greater operational and financial flexibility, while allowing us to benefit from the local knowledge, world-class products, R&D expertise and infrastructure of internationally- recognized partners such as LG H&H. By operating with a local structure that fits our purpose, we will be better positioned to capture the significant opportunity in China and the wider Asian market. We know LG H&H well and believe that they will continue to be a strong partner for Avon as we collectively seek to grow our business in the region.”

Suk Cha, CEO of LG Household & Health Care, said, “We are pleased to have reached this agreement with Avon and add a state-of-the-art facility with powerful capabilities to deliver quality products for the fast-growth local market. Our past interactions with Avon provide us a sound understanding of its brand power and global reach, and we look forward to continuing our relationship with Avon as we both explore ways to grow our product lines, bring desirable products to market faster, and each accelerate our growth across Asia.”

The transaction is expected to close by February 2019 following customary local regulatory approvals.

Is Your Arbitration Clause Enforceable?

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With the start of a new year, direct selling companies might benefit from taking a new look at the arbitration clauses designed to protect them from class-action lawsuits.

Why? Last week, the Ontario Court of Appeal deemed Uber’s arbitration policy to take advantage of drivers. A panel of three judges ruled on Wednesday that Uber was improperly forcing its drivers in the province to resolve complaints about pay or other work issues through an international mediation process in the Netherlands. Drivers disputing even small complaints face a steep cost of $14,500 to initiate the process, the ruling said.

The clause, raised in the class action certification process, is both “unconscionable” and amounts to “illegal contracting out of an employment standard,” Justice Ian Nordheimer wrote, with Justices Kathryn Feldman and Gladys Pardu concurring in allowing the appeal.

Michael Wright, managing partner at Cavalluzzo LLP in Toronto, says the decision shows that if arbitration provisions are too onerous for one party, they may be set aside.

“What the court concluded was that Uber overreached fairly dramatically here,” says Wright, one of the lawyers who represented appellant David Heller in the case, Heller v. Uber Technologies Inc., 2019 ONCA 1.

The decision overturned that of the lower court and dealt a blow to the ride-hailing technology company, which now faces the prospect of a class-action lawsuit in Ontario.

The enforceability of arbitration clauses has been challenged in direct selling previously. In 1998, a group of Amway distributors filed suit alleging that the arbitration clause in their distribution agreement with Amway was unenforceable. The District Court held that the clause was. It found that the arbitration agreement was not unconscionable and further reasoned that the parties were sophisticated business people who were aware of the consequences of agreeing to such an arbitration clause.

Maybe now is a good time to start the new year by revisiting your arbitration policy to see if it would stand up in court.

Facebook Breach May Bring About EU-Style GDPR Privacy Rules in U.S.

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Recent news of a Facebook breach might have a major impact on Information Technology Asset Management (ITAM) practices in the U.S.

News just before Christmas that Facebook is allowing advertisers and marketers direct access to personal data—and even private conversations—may have the effect of accelerating consideration in the U.S. of General Data Protection Regulation (GDPR) privacy rules, according to Dr. Barbara Rembiesa, president and CEO of the International Association of IT Asset Managers (IAITAM).

“The year 2018 has been a difficult one for Facebook,” said Rembiesa. “Between testifying before both domestic and international courts as well as the bad publicity surrounding the Cambridge Analytica scandal, one would think that Facebook would be careful how it handles and distributes personal information. This time, it turns out Facebook was selling access to your personal data. This includes private conversations.”

The data sharing deals which Facebook engaged in have been revealed to be especially liberal with their access to personal identifying information (PII). This PII can include everything from a user’s name and email address to their photos, birthdate and even private Facebook Messenger texts. The intent was to benefit everyone using Facebook. By having all that information accessible by the various organizations, ads and marketing campaigns were supposed to be easier to tailor to their target demographic. However, this information sharing went far beyond the scope of what most people anticipated and has created a privacy crisis to which Facebook needs to respond.

“Advertisers and marketers used their wide-open access to harvest PII from Facebook users without the knowledge of the individual,” Rembiesa said. “As a result, some users of Facebook and other social media platforms are now looking for a solution to protect their data as well as their digital identity. Those same people have looked at the EU and their sweeping regulation that turned the power and authority of protecting PII back to the individual: the GDPR. The recent Facebook discovery has people looking for the adoption of something like GDPR in the U.S. faster than anticipated. It seems that people feel they are able to make decisions about their personal data better than any company or organization would.”

What would happen if the U.S. followed such a path?

Assuming a bill like GDPR is passed in the United States, the next question is how corporations will adopt the new regulation. Organizations in the European Union currently use Data Protection Officers (DPOs) for handling compliance, and many U.S.-based companies are actively recruiting DPOs in preparation for what is to come.

“The good news is that organizations that have mature IT Asset Management programs already have the professionals needed under their roof,” said Rembiesa. “The roles and responsibilities required of a Data Protection Officer are a natural addition for an IT Asset Manager. IT Asset Managers produce policies and processes and utilize best practices that care for software, hardware, and mobile assets. As Data Protection Officers, those practices would extend to personal identifiable information since such information is stored on those assets.”

Public Direct Sellers: Growth Continues To Accelerate For The Wellness Companies

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Avon Products vs. Tupperware in addressing the new paradigm.

Through the halfway mark in the fourth quarter, publicly traded Direct Selling stocks continued to outperform the broader market and consumer index averages so far in 2018. The Lane Research Direct Selling Index, which comprises the stocks of the six publicly traded direct selling companies we follow that are listed in the U.S., Herbalife Nutrition (HLF), Medifast (MED), Nu Skin Enterprises (NUS), Tupperware Brands (TUP), USANA Health Sciences (USNA) and London-based Avon Products (AVP), is up on average nearly +30 percent year to date compared to modest gains so far this year in the S&P 500 following the October sell-off. The Consumer Cyclical ETF (XLY) is up about +8 percent and the Consumer Staple ETF (XLP) is down modestly this year so far.

The key reasons for the strong outperformance have been:

YEAR-OVER-YEAR ORGANIC SALES GROWTH LAST 7 QUARTERS

  • on balance business has been substantially better than expected at the beginning of the year, so many of the companies have been delivering results ahead of Wall Street expectations.
  • multiples on the stocks have expanded following the covering of a large short position in industry bellwether Herbalife Nutrition early in the year.

As the chart illustrates, organic sales growth for the Group continued to accelerate as 2018 progressed. The Group Averages, which are sharply but not solely influenced by the dramatic performance of Optavia this year, have accelerated from posting +10 percent growth on average in the 2017 Q4 to +11 percent in the 2018 Q1, +18 percent in the Q2 and then +25 percent in the Q3. Along with the strong performance at Optavia we have also seen accelerating growth at Herbalife, Nu Skin and Usana as 2018 progressed as well.

Clearly the newer, more wellness-based companies are in the sweet spot of direct selling at present versus the older, more traditional brands like Avon Products and Tupperware. However, age of concept and product categories are not the sole definers behind the success of the former mentioned companies, in our view. We believe it is no coincidence that these companies are also the ones that have spent heavily behind new product development, including a complete rebranding at Optavia, and in technology to advance social selling and the ease with which their respective representatives can manage their businesses and more efficiently market to their customers.

Privately held Rodan + Fields was on the leading edge of this movement at the end of the last decade, and has built a $1.5B skin care business in the U.S. in a short period of time. That is a bigger presence in the U.S. of any of the publicly traded direct selling companies we follow, which have been around for a lot longer. And oh, by the way, according to a recent company press release, Euromonitor has ranked Rodan + Fields as the #1 skin care brand in the U.S. among all distribution channels, with the company projecting continued double-digit growth for the next 5 years.

How are Avon and Tupperware Addressing the New Paradigm?

So, as 2019 unfolds, what are Avon and Tupperware going to do to keep from being left behind? Below are 5 commonalities and 5 differences in their situations as we see it:

KEY COMMONALITIES
  1. NEW CEOs. Jan Zijderveld took over as CEO of Avon in February and Tricia Stitzel became CEO of Tupperware in May.
  2. The new CEOs have brought in new lieutenants. Among new Avon leadership appointed this year are regional heads for markets that account for >50 percent of its business, while Tupperware has new Group Presidents in 3 of its 5 main divisions, which account for over 80 percent if its sales.
  3. Increased focus on technology and social selling. Tupperware is rolling out enhanced mobile applications for on-line and off-line ordering, including catalogs that can be shared with social media. Avon is launching My Avon Store and My Avon Office, and rolling out e-brochures to help reps manage their sales process and business management.
  4. Cost reduction programs. Avon has just come off a sweeping 3-year cost savings program and recently announced another program of additional savings while Tupperware is most of the way through a much more modest cost savings program announced early last year.
  5. Liquidity to finance growth initiatives. Both Avon and Tupperware have ample cash and borrowing capacity to begin to implement their respective growth initiatives. Additionally, the fourth quarter is the largest cash generator seasonally for each company, so they should be in a good financial position to hit the ground running in 2019.
KEY DIFFERENCES
  1. Starting at the top, new management at Avon are outsiders. While at Tupperware they are insiders. Avon has recruited talent with senior level experience at other direct selling concepts such as Herbalife, Natura and Nu Skin as it looks to rebuild its direct selling chops after having abandoned many of them over the years. Tupperware’s recent management moves have been with existing talent, indicative of a much deeper bench from which to draw.
  2. Avon has been in a state of decline for the better part of 10 years. While growth at Tupperware has stalled only in the past 1-2 years. In 2010, Avon had 6.5 million representatives, which has declined to about 6 million today while globally, people participating in direct selling went from approximately 80 million in 2010 to over 100 million today. While not quite keeping pace with the broader direct selling market, Tupperware has continued to consistently grow its sales force, increasing to 3.1 million sellers today from 2.6 million in 2010.
  3. The magnitude of the initiatives for Avon are much larger. Initiatives will take longer to implement than at Tupperware. Avon’s initiatives include hundreds of millions of dollars in spending behind its brand, representatives, category competitiveness and various technology initiatives between 2019-2021. It could be years before investors see the fruits of what has begun to be implemented. The initiatives at Tupperware are much more modest, mostly around technology advancements to develop ecommerce capabilities and enhance the ability of its sales force to manage and grow its business.
  4. Tupperware generates ample free cash flow. Tupperware’s free cash flow pays a generous dividend and is still able to self-fund its growth initiatives. While Avon is relying on generating an additional $400MM in cost savings from the business over the next 3 years on top of the $350MM realized in the past 3 years to self-fund its growth initiatives.

Bottom line, from where we sit Avon looks like a real fixer-upper after many years of neglect. We like what new management has done early in the process, but it’s a tall task to execute on all the initiatives management has outlined, while self-funding the efforts by taking costs out of the existing infrastructure. And, as management outlined at its Investor Day in September, it will take time. Conversely, we view Tupperware as more of a remodel coming off a very successful 10+ year run of positive organic sales growth from 2006 to 2017. Injecting new energy with the new management team may be all the catalyst it needs to get back on a growth track. Meanwhile, existing cash flows should be ample to finance the investments and still pay a healthy dividend while investors wait for growth to resume, which could come as soon as this year.

However, Avon recently received a big vote of confidence from the investment community as legendary value investor Bill Miller recently took a very large stake in the company. Sometimes it pays to be the discerning eye looking beyond curb appeal.

Douglas M. Lane, CFA—is a securities analyst with more than 20 years of experience covering companies that employ a direct to consumer business model. He leads a boutique equity research firm, Lane Research, focusing on those companies. He can be reached at doug@laneres.com.

Top 2019 Global Workforce Predictions

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The Workforce Institute at Kronos Incorporated recently released its annual predictions of the top trends that will impact the global workforce in the coming year.

 

  1. AI and machine learning unmask previously hidden workforce data to make people-centric decisions. Artificial intelligence (AI) and machine learning will finally be woven into workforce management practices, revealing a treasure trove of data organizations have been collecting—but not using—for decades. With regular and digestible access to workforce data trends—like scheduling accuracy, absenteeism, overtime usage and burnout—predictive analytics will shine, helping organizations head off potential issues before they arise. Intelligent automation will also free up managers from admin-heavy tasks like managing schedules, approving time-off requests and shift changes while encouraging data-driven decision-making to provide clarity between what is equal versus what is fair. However, to harness analytical insights to make accurate, actionable decisions for specific employee and business goals, organizations must avoid a “one-size-fits-all” model.
  1. Historically tight labor markets and emerging technologies put people managers in the spotlight. With unemployment low and the exodus of baby boomers reaching critical mass, employers globally will face a historically tight labor market. Sourcing great candidates has never been more difficult, and retention will become an all-out dogfight. While an employer’s brand, innovative hiring technologies and proactive recruiting practices are more important than ever, it’s organizations with the best people managers that will ultimately prevail. Organizations will place an increased focus on leadership development as a retention strategy—especially as millennials flock to middle management—and measuring manager effectiveness will be HR’s top challenge in 2019. Additionally, as AI and machine learning take over mundane managerial tasks, freeing up managers to spend more time with their people, deficits in leadership competencies will be exposed as management expectations continue to shift from a historical command-and-control model to a horizontal style that considers all perspectives and seeks innovative ways to inspire, develop, grow and keep the top talent that drives business value.
  1. The changing face of education redefines trades and challenges traditional hiring practices. As the student loan debt crisis furthers the debate about the value of a college education and credentialing programs for job-specific skills emerge, tomorrow’s best employees may take an unconventional path to employment. Competencies that once required a degree—such as coding, robotics and data analytics—are being redefined as skilled trades with the rise of certificate and micro-credential programs. Also, as yesterday’s jobs become augmented by automation, new skills will be required for traditionally “blue-collar” roles. Employers must revamp their hiring profiles and remove traditional job requirements to tap into this new pool of qualified candidates who will staff the shop floor, store floor, hospital floor and top floor of the future. And, as millennials become parents, many will likely urge their school-aged children to take an alternative educational path for a brighter financial future.
  1. Further fracturing of employment laws globally, nationally and at the local level strain organizations. From minimum wage to sick pay, to fair scheduling proposals to the right to disconnect, governments around the world will continue localizing—and repealing—employment laws. Ever-changing regulations around the world will put increased strain on organizations to avoid sanctions, fines, crippling class action lawsuits and reputation-damaging stories. Technology will be vital for organizations to manage scheduling-related mandates, ensure unbiased practices, monitor fatigue and overtime management and ensure employees are paid accurately and fairly, all while providing analytical insights that surface risky managerial practices otherwise buried in a sea of employment data.
  1. Employee-agnostic flexibility, consumer-grade tech and the rise of the occasional time worker redefine “work your way.”All employees—salaried, hourly, and gig—crave control over when, where and how they work. While employers have put more focus on flexibility and alternative work schedules, most have been slow to reengineer processes that underpin how the organization runs. Tools must meet employees where they naturally work, such as on their mobile phone, tablet or favorite social networking platforms. The gig economy and emergence of the “occasional-time worker” will force organizations to replace traditional hiring and scheduling processes with systems that enable workers to choose when, where and how long they work. Mobile-friendly processes, self-service features and immediate access to real-time data in a consumer-grade technology wrapper will help drive the next iteration of the flexibility phenomenon, as predictability of anytime work will empower employees to be more productive, make more intelligent decisions and be more engaged.
  1. Greater emphasis on disaster preparedness as part of a holistic human capital management strategy. Disasters large and small, natural and man-made, have unfortunately become the norm. Organizations worldwide have been challenged to respond effectively to increasingly frequent crises, with HR, operations and payroll forced to take center stage in the lives of affected employees. With more emphasis on company culture, caring and “doing what’s right” in a world where disasters—and a company’s response to them—are frequently in the news, there is a new level of expectation for an organization’s response, responsibility and employee benefits. Organizations of all sizes must take a hard look at disaster policies, processes and capabilities, including both taking care of employees in the moment and rebuilding in the wake of disaster, which will be near impossible for those operating on a DIY workforce management, HR and payroll system. Sustainability plans that today primarily account for company assets and data will need to incorporate employees and their families.

Primerica Welcomes Senior Leaders to Atlanta to Kick Off 2019

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Primerica, Inc. (NYSE: PRI) is hosting its top representatives from across the United States and Canada for its Senior Leadership Meeting in Atlanta.

The event, which began yesterday and will run through today, will largely focus on new sales force and client initiatives for 2019.

The meeting will also celebrate Primerica’s ongoing success in 2018, including term life insurance face amount in force of approximately $782 billion at year end, as well as record-breaking Investment and Savings Products sales of $7 billion, an increase of 13 percent year-over-year.

“2018 was another outstanding year for Primerica as we continued to execute our strategy to drive growth and improve performance by expanding distribution and prudently deploying capital,” said Glenn Williams, chief executive officer. “We ended the year with a sales force of more than 130,700 life insurance-licensed representatives and more than 25,000 mutual fund-licensed representatives, both of which represent the highest counts since the company went public in 2010. Our diverse, talented sales force is our biggest competitive advantage, and it positions us well to continue providing exemplary service and financial products to middle income families while delivering long-term value for all of our stakeholders.”

Additional 2018 production results include:

  • Recruiting of New Representatives: 291,000
  • Term Life Insurance Face Amount Issued: $95 billion
  • Term Life Insurance Claims Paid to Policy Beneficiaries: $1.4 billion
  • Client Asset Values of approximately $56 billion at year end
  • Compensation Paid to the Sales Force of approximately $790 million

“In 2019, we plan to refine our clients’ experience, evaluate new product offerings, and enhance distribution capabilities for our representatives,” said Williams. “The middle-income market’s need for income protection and retirement savings is greater than ever. Thanks to the strong leadership of our sales force, I am confident in our ability to meet the financial needs of hard-working families throughout North America in the coming year.”

Welcome To 2019!

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Just as the arrival of a new year allows us start a new chapter and usher in new ideas, we too at Direct Selling News are excited to present to you a few new items for show and tell.

As you can see we have added a new coat of paint to our look and feel, in addition to expanding our content offerings. This is all in an effort to better serve the needs of YOU, our audience.

Never in our history have we been witness to a more competitive landscape as we are experiencing right now, with new challenges popping up every day that affect the direct selling channel. Whether it’s the ever-present 800-pound Amazon gorilla and its frictionless consumer experience, or the stealth threats from the gig economy’s easy signup process, delivering customers to our phones (Uber and Lyft) while paying you the same day, we are in a battle to remain relevant.

As LifeVantage CEO Darren Jensen said at DSA Fall Conference 2018, “The people in this room are not my competitors. Uber, Lyft, Shopify, and Amazon are my—and your—competitors.”

This means not only do we need to start discussing how we are going to compete going forward, it’s paramount that we work together as a channel in doing it. And that starts with upping our own game in supplying you with timely information and analysis you will need to make better decisions going forward.

With that said, we have a great lineup of content for you this month, starting with our cover story on the importance of focus when it comes to implementing your 2019 strategy. If your priority list is expanding, you might want to scale back for the fear of spreading you and your team too thin.

Our company spotlight this issue is on PURE, led by CEO Daren Hogge, which has seen impressive growth the past few years, and a resurgence in field activity. You will also see a few snippets of some exclusive online content, including our Direct Selling vs Gig Economy feature (pg. 9) and New Company Interview Series with Gaya Samarasingha of Kalaia (pg. 21). Just scan the QR code with your iPhone camera to be directed to the entire story.

I hope you are as excited to kick off 2019 as I am. We will be launching a few other initiatives in the upcoming months to better serve you. Also, let me know what you think of the new changes to the magazine as well as any other comments that will help us do our job better.

Worldwide Hair Care Market Expected to Reach $112 Billion by 2023

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Direct sellers such as Amway, Natura and Avon have reason to be optimistic for the growth of their hair care product lines over the next five years.

A new report by ResearchAndMarkets.com—“Global Hair Care Market Trends, Size – Segmented by Product, Distribution Channel (Direct Selling, Hypermarkets & Retail Chains, e-Commerce), and Geography – Growth, Trends and Forecast”—states the global hair care market was valued at $91.95 billion in 2017 and is expected to reach $112.57 billion by 2023, registering a CAGR of 3.35 percent over the forecast period of 2018–2023.

According to the report, the majority of the global population has become beauty conscious and people are more inclined toward beauty-enhancing products. This has resulted in an increased demand for grooming products. In addition, with more than 54 percent of the population falling in the age bracket of 20–65 years, a significant number of people are concerned about the effects of aging.

With the youth and middle-aged population facing hair-related problems, such as discoloring and thinning, the demand for hair care is also increasing. There has also been a considerable surge in global e-commerce sales and companies are looking for ways to explore this sector to boost their sales.