What We Make It Innovation and Transformation Beyond 2020 – Scentsy

To gain perspective and understanding about what’s around the corner for 2021, it seemed prudent to profile some 2020 direct selling outliers. Here, eight executives reflect on a year that sometimes delivered unexpected and rapid increases in sales and growth for their companies, despite less-than-optimal pandemic conditions that caused pain and recession-like contractions for so many other businesses.

Beyond having in common the ability to adapt and be nimble, these companies are all driven by products in demand by consumers and readily accessible via robust e-commerce platforms. And these companies, much like direct selling legacy company Tupperware Brands—who experienced a resurgence thanks to more people needing to store leftovers during the pandemic, marked quadrupled profits of $34.4 million in the most recent quarter and saw stock prices soar from $1 in March to $28.80 per share in late October—want to ride this wave of sales through 2021.

Here, they lay out how they intend to do that using the insight of hindsight. They detail what worked this year, what challenged them, and how they coped with the unpredictability 2020 consistently threw. They share what sustained them in strife and offer up advice to those feeling the strain today. And lastly, they look forward through a pragmatic and transformative lens on a 2021 that will ultimately be what direct selling companies make it.

SCENTSY

FOUNDED / 2004

HEADQUARTERS / Meridian, Idaho

TOP EXECUTIVES / Orville and Heidi Thompson, Co-CEO and C0-Founders; Dan Orchard, President

PRODUCTS / Fragrance and Home Decor

When faced with changing market forces, Scentsy, founded in 2004, has a reputation for rising to the challenge. Over the last ten years, the fragrance and home décor direct selling giant has marked a high of $560 million in revenue in 2012, only to find themselves $141 million off that pace two short years later. But the company’s trademark agility and stalwart stability marched their revenues back up over subsequent years and in 2019 revenues hit $472 million. That figure placed Scentsy at #22 on DSN’s Global 100 for 2020.

Unlike other party plan business models within direct selling, Scentsy found themselves in a good place with their Consultants when the effects of the global pandemic hit. President Dan Orchard says early and frank conversations with top field leaders addressed the uncertainty of potential government shutdowns and how operating at half-capacity could affect sales. That transparency and honesty prompted action, rather than fear-induced paralysis among the field, whose extraordinary efforts ultimately protected the jobs and livelihoods of home office employees. Orchard says it was amazing and humbling.

President Dan Orchard on 2020

What worked for your company? Were you somehow better prepared? Were there standout successes? Were you more adaptive and flexible?

Dan Orchard: Consultants organized monthly campaigns in April and May that served as a rallying point for all Consultants and went to work encouraging and setting the example for their teams to shift their businesses strongly to online parties and sales that could be done in a safe manner. Instead of allowing the pandemic to defeat them, they viewed it as an opportunity.

These efforts by our Consultants also aligned well with what was happening in the lives and homes of Scentsy customers. Stay-at-home orders created a situation where people found themselves spending much more time in their homes, and Scentsy sells products that improve the experience and environment within homes. Customers were also increasingly shifting their buying behavior to online shopping—which Scentsy systems easily supported. Sales and sponsoring didn’t slow down…instead, they both began to outpace our projections. At the home office, we quickly shifted from uncertainty about the future to leaning into the demand and to plan for growth.

What obstacles did you face in 2020?

Dan Orchard: In the early days of the pandemic, primary concerns were around employee safety and whether or not we were going to be able to continue operating. We put an incredible amount of focus on implementing safety procedures and protocols to both protect our employees and to ensure Scentsy was compliant with all local health and government requirements.

The next wave of concerns came around product supply, and whether or not we would be able to source our hard goods products from Asia, and later our fragrance raw goods were impacted by shortages due to the increased global demand for cleaning products.

Another obstacle was enabling all of our employees who were not involved in manufacturing or shipping to be able to work from home in a period of a few days. This took a lot of heavy lifting from our IT teams to ensure that employees were set up to work remotely in ways that allowed us to keep our productivity up.

With the unprecedented levels of revenue growth and recruiting we’ve continued to experience throughout the summer and fall, our biggest challenges have shifted to product availability and shipping quota constraints imposed to us by our couriers.

How do your plans for 2021 reflect what you’ve learned?

Dan Orchard: Scentsy culture has always remained close to our entrepreneurial roots. We listen carefully to our field and validate what they are seeing/feeling with data. Then we are not afraid to act and change course when we believe there is a better path—due to what we are seeing, hearing and feeling. This agility, enabled by an experienced home office team that works very well together, served Scentsy very well in responding to the curves thrown at the business in 2020.

What is your plan to sustain the new business in 2021?

Dan Orchard: Keep doing what we have been doing in 2020. Provide our Consultants with products they get excited and energized about selling to their customers and continue to make Scentsy an appealing and inviting place and community for new Consultants to want to join, and current Consultants to want to stay.

What sustains you and your company during times of strife? What advice would you offer to others?
Dan Orchard: Lean on and draw strength from one another. In the very early days of Scentsy, there was a strong, interdependent relationship established between (founders) Heidi and Orville (Thompson) and the Consultants. A strong culture was built on the foundation of giving more than you take. Heidi and Orville were truly giving their all because they wanted to see Consultants succeed and improve their lives. Those early Consultants (many of who are now our top leaders) felt the unique culture of Scentsy, saw the efforts of Heidi, Orville, and the home office, and wanted to be a part of it. Scentsy still benefits from this positive, mutually-beneficial field/home office relationship.

Additionally, both with employees and your field organization, always keep the lines of communication wide open. When context or information is lacking, people tend to fill in those gaps with all kinds of negative thoughts and ideas. Even if the news isn’t all good, providing context and information is always better than the alternative.

Any insights for 2021?

Dan Orchard: After what just happened in 2020, anything is possible. We will continue to plan and prepare the best we can and be ready to react and respond in ways that serve our Consultants and their customers well. We know we aren’t perfect, but our vision is always to learn from our mistakes, improve every day and come out stronger than ever before.