“Receiving our GFSI certification is a landmark moment for USANA and our manufacturing capabilities,” said Jim Brown, USANA President and CEO. “In the crowded health and wellness space it’s important to differentiate yourself. Receiving this certification is a great way for us to do just that. I’m extremely proud of our manufacturing and quality teams who have implemented the standards and practices necessary to pass this demanding audit.” 

The goal of GFSI is to reduce recalls and deliver safer products to consumers, and this certification signifies that USANA’S enrobed snack bars and drink mix powders meet stringent requirements for food safety management systems. 

“SQF is considered to be the highest standard in the industry, and our certification with them places us at the top of the mountain,” said Walter Noot, USANA Chief Operating Officer. “Having SQF certify our dedication to the safest and highest-quality production standards is a huge benefit to us—especially with our foods products. I look forward to the new opportunities this certification can create for us. Thank you to everyone at our USANA foods facility for all their hard work.” 

The post USANA Manufacturing Facility Earns GFSI Certification  first appeared on Direct Selling News.

“This win is outstanding for our manufacturing and operations teams,” said Jim Brown, USANA CEO and President. “I am so proud to work for a company that continuously seeks improvement and goes above and beyond. USANA is committed to excellence, and being named manufacturer of the year for a second year in a row proves that.” 

USANA’s manufacturing facility is FDA-registered and GMP-certified by USP and NSF, and features nutritional supplement machines that can produce up to half a million tablets per hour. Each machine is also designed to monitor its output for specific quality attributes and can customize or change the shape and size of each supplement. 

“USANA has a mission to manufacture high-quality products, and because we take pride in our manufacturing practices, we create products people trust,” said Walter Noot, USANA Chief Operating Officer. “We are one of the few companies to manufacture almost 70% of our products in our state-of-the-art, FDA-registered facility (excluding Mainland China), something I am truly proud of.”

The post USANA Named Top Manufacturer in Utah  first appeared on Direct Selling News.

“I’m very pleased to welcome Dr. Wood back to USANA as the newest member of our board,” said Myron W. Wentz, Ph.D., Chairman of the Board. “Prior to his retirement in 2011, Dr. Wood led USANA’s research and development department for 15 years. His expertise will help USANA stay at the forefront of cellular nutrition and scientific innovation.”

Dr. Wood joined USANA in June 1996 as Director of Research and Development, and served in this role until June 1999, when he was appointed as the company’s vice president of Research and Development. In January 2006, he was appointed executive vice president of Research and Development.

“I am honored to accept a seat on USANA’s board of directors,” said Dr. Wood. “I have followed the company closely since my retirement and have been pleased to see it grow and progress.”

Walter Noot joined USANA in 2016 as chief information officer. As COO, he will continue to oversee USANA’s information technology function, with the added responsibility of global operations. He has more than two decades of executive leadership experience with numerous companies in and out of the direct selling industry.

“Under Walter’s leadership, USANA’s IT department has been re-organized and is now functioning at the highest level,” said USANA President Jim Brown. “We are grateful to have Walter as a key player on our executive leadership team. His vision, passion for excellence, and knowledge will continue to help USANA attain record heights and accomplishments.”

The post USANA Announces New Appointments first appeared on Direct Selling News.

It has become a painfully common headline: “Cyberthieves breach company’s system, steal credit card numbers, Social Security numbers, birthdates, passport numbers . . .” High-profile corporations such as Target, Equifax and Marriott all have been robbed of massive amounts of valuable consumer data in recent years, proving that even major companies with huge budgets and IT departments are not safe.

Cybercrime is not your grandfather’s smash and grab. It is a strategic, sophisticated, coordinated operation in which criminals slip in through a virtual window that a company forgot to close or through a back door that may have been closed but not locked. Hackers even disguise themselves as friendly faces and come in through main online entrances, using keys that unwitting employees freely hand over.

Record Number of Breaches

As we live more of our lives online, cyberspace has become a web burglar’s dream. In the first half of 2018, the equivalent of 291 records were stolen or exposed every second, reports Computer Business Review. That adds up to more than 4.5 billion records in just six months. The financial losses from these breaches can reach hundreds of billions of dollars in a very short time.

The direct selling industry, which collects billions of items of personal data from customers all over the world, is a prime target for cybercriminals, making cybersecurity a top priority right now, say direct selling executives and advocates. “Direct selling companies are among the most vulnerable to cyberattacks because of the volume and type of data they collect,” says Walter Noot, chief information officer at Salt Lake City, Utah-based USANA. Beyond personally identifiable information (PII)—such as addresses and phone numbers— and payment card industry (PCI) data, they gather other sensitive content such as Social Security and government ID numbers.

“Cybersecurity is a paramount concern for us as an industry,” says Adolfo Franco, chief operating officer at the Direct Selling Association (DSA). Feeling increasing pressure from regulators to close IT gaps or risk penalties and massive loss of data and consumer trust, many direct selling leaders are doubling down on efforts to stop intruders as far from the doors and windows as possible.

The Human Element

In a 2017 study conducted for IBM, 47 percent of cyberattacks among companies surveyed involved a malicious or criminal attack, and about one-third involved IT system glitches and business process failures. But 25 percent were due to negligent employees or contractors. That’s one in four that potentially could be prevented through proper training and increased awareness.

That kind of diligence recently saved Frisco, Texas-based PURE from handing over money to a cyberthief. Chief Executive Officer (CEO) Daren Hogge says he was about to board a plane when he got a call from his assistant. She wanted to confirm that he’d sent her an email telling her to purchase and send the codes from some Apple iTunes gift cards “immediately—so that we can use them as rewards for our Independent Business Owners (IBOs).” He had not sent that email, and while she almost bought the cards, she paused and thought, “I’d better check this out first.”

Common-sense cybersafety like this is a recurring topic at PURE headquarters staff meetings and a regular message to the company’s 60,000 U.S. and Asia IBOs. “We have found that you can’t tell someone just one time,” Hogge says. “It has to be a constant effort. The more you hear it the more it becomes ingrained in what you do.”

Stopping thieves in their tracks is everyone’s job, experts say—because the financial consequences of successful extortion or theft can cost a company dearly. Among the companies surveyed for the IBM study, the average cost of a typical breach in 2017 was $3.6 million. So-called “mega breaches” can cost a single company as much as $350 million. “There are many hidden expenses,” the study says, “such as reputational damage, customer turnover, and operational costs.”

“Direct selling companies are among the most vulnerable to cyberattacks because of the volume and type of data they collect.”
— Walter Noot, Chief Information Officer, USANA

Beyond the harm to customers and company finances, senior executives’ jobs can be at risk in the wake of attacks, too. Equifax’s chairman and CEO stepped down after his credit agency’s breach was revealed in 2017, taking the heat for the theft of PII that affected 145.5 million people. An article in TechRepublic reported recently that Paul Proctor, vice president of research and advisory company Gartner, believes the Equifax chief’s exit “will be a trend likely to continue as more breaches emerge.”

Rules and Regulations

As online privacy rules tighten—especially in Europe, under the General Data Protection Regulation that went into effect last May—direct selling companies need to stay on top and even ahead of best practices in data protection. In 2016 the DSA formed a council of chief information officers from about 15 member companies for this purpose. Considering themselves a learning group, the CIOs meet regularly to compare notes on how their companies are handling data, implementing security measures, responding to potential threats and recruiting and retaining top IT talent.

“Stopping thieves in their tracks is everyone’s job, experts say—because the financial consequences of successful extortion or theft can cost a company dearly. Among the companies surveyed for the IBM study, the average cost of a typical breach in 2017 was $3.6 million. ”

Eventually, this group may help DSA issue a set of U.S. cybersecurity guidelines for the industry, Franco says. The European DSA has already published guidelines for direct sellers in Europe, he adds. Meantime, the CIO council is gathering and processing information about the nature of current threats as well as how various levels of government are developing and enforcing regulations.

The Federal Trade Commission is scheduled to have a hearing this month on data privacy, and the DSA will be there to provide its perspective on the best ways to shield companies and consumers from cyberattacks. As always, Franco says, the association supports all regulations that are in the best interests of its members and their stakeholders and just wants to make sure “we are not burdened with unreasonable or unnecessary” rules.

California has already passed its own Consumer Privacy Act, set to take effect in 2020. But Noot says he hopes U.S. lawmakers and regulators will adopt national standards so that companies don’t have to keep track of and comply with lots of different state-level regulations.

Constant Vigilance

Executives we talked to for this story say it’s critical to have a healthy “respect” for hackers’ abilities, or rather an acknowledgment of their skills. To say that a company is immune to cybercrime is folly, according to Noot, who says “If anyone says ‘We’re totally secure,’ they should be fired. There’s no such thing.” Because believing you’re secure implies that the methods of breaking in are static, and they’re not. Hacking is an evolving science. Hogge agrees. “I don’t want to give the impression that PURE is smarter than these hackers, because these folks are genius people. They’ll take it as a personal challenge.”

So the best cyberdefense strategies are those that evolve, too. “Companies think the IT department can throw some firewalls at the system and they’re okay,” Noot says. “And that’s not enough.” At USANA, a newly appointed vice president who’s in charge of just cybersecurity has been immersed in training, he adds. The company also regularly assesses its hardware, software and IT policies—sometimes using third-party evaluators—to look for weaknesses.

“If you’re doing your best to protect everything you’ve got, if you’re equal to or better in cybersecurity than companies your size, you’re in a decent place,” Noot says.

“Cybersecurity is a paramount concern for us as an industry.”
— Adolfo Franco, Chief Operating Officer, Direct Selling Association

Pick up the printed issue in which this article is found.

Doing your best includes, at a basic level, following accepted cybersafety practices like frequent password resets and reminding people not to share personal data, like login information. System monitoring is key, too. Make sure there’s always someone watching network traffic, looking for unusual activity. If, despite those best efforts, you discover you’ve been breached, be quick to announce it. Transparency will go a long way toward restoring trust with your customers, experts say.

Hogge also points out how important it is to partner with vendors, like data warehousers and accounting service providers, who have a track record of protecting consumer and IBO data. “We partner with companies that have the ability to help us thwart cyberattacks,” he says.

The bottom line is, there’s no way to completely insulate a company from intruders. It’s the stark reality of the increasingly virtual world we live in, Hogge says. “We, like everybody, wish it wasn’t, but it is. We’ve got to be diligent.”

Cyber Attacks 101

Hackers have lots of weapons in their arsenals, but companies can better defend their data and systems if employees know what those weapons look like and how they’re used. Here are five of the biggest cyberguns and how to spot them.

1. Data breach

Digital theft of sensitive data such as customer names, addresses, birthdates, Social Security numbers, company financial information.
Signs of a breach: Reports of identity theft; sensitive company data discovered freely available online; unauthorized downloads from the network; bogus email attachment opened by an employee.

2. Phishing (also known as social engineering)

A request, often for identifying or financial information, that appears to be from an organization or a person the recipient knows.
Signs of phishing: Unexpected email requests–that appear to be (but are not) from someone an employee knows—for money or sensitive data; hyperlinks that don’t match what the text of the email says they should be; poor grammar and spelling in emails; “URGENT” in subject lines.

3. Malware

Software intended to damage or disable computers and computer systems; can come from web downloads such as attached files or from clicking on internet ads.
Signs of malware: Strange ads or windows popping up even when a user isn’t logged into a web browser; ads with inappropriate content that might be difficult to close; ads that display flashing colors while blocking what the user is trying to view.

4. Ransomware

Programs that cyberblackmailers use to lock up systems and then charge a fee to release them.
Signs of ransomware: Messages that a computer doesn’t have the application to open a file; odd or missing file extensions; explicit demands for money to restore access.

5. Distributed denial of service attack

Programs that cybercriminals use to flood a network with traffic, crashing the system and preventing authorized users from getting to their email, files and online accounts and other services.
Signs of DDoS attack: Unusually slow network; suddenly inaccessible websites.

Best Cyberdefense Practices

Walter Noot, chief information officer at Salt Lake City, Utah-based USANA, has been in the technology industry for nearly 25 years—many of those years closely involved with direct selling companies. And until about 10 years ago, the internet barely figured into most direct selling operations, so no one cared that much about cybersecurity. Things have changed.

Noot says USANA has spent tens of millions of dollars on cyberprotection in the last few years, its strategy built on a foundation of these four pillars:

1. Internal Processes—including acceptable use policies for software, systems and devices
2. Software—for monitoring network activity, defending systems and recovering lost or stolen data
3. Architecture and Infrastructure—configuring networks to resist penetration and implementing the proper number and types of firewalls and disaster recovery systems
4. Culture—the priority a company puts on data safety and the money it’s willing to spend on it

Noot and other experts also say it’s important to examine the kinds of data you’re collecting and to know why you’re collecting it. General Data Protection Regulation guidelines explicitly address this idea of being deliberate about gathering and keeping data. Whether or not your company does business in Europe, you would be wise to ask yourself these questions:

Is data protection top of mind for everyone at this company? Are we privacy-aware?

Who collects our data and where is it kept? How long do we keep it and why? What do we use it for?

Do we give customers clear information about what we collect from them, and can they easily opt out of emails and other forms of marketing from us?

Are we tracking data privacy news and regulatory reform efforts?

The post Are You Sure Your Data Is Safe? first appeared on Direct Selling News.

Whether you’re hitting the gym to burn off a few pounds, hitting the street to look for a new job or hitting those business goals you set for 2018, the start of a new year marks a time of renewal and resolutions—a great rebooting, so to speak.

As you will see, that’s what this month’s issue of Direct Selling News is all about.

In this month’s cover story, writer Heather Martin chronicles the efforts of a cross-section of direct selling companies to figure out the best ways to incorporate the latest technology tools into their businesses. The aim is to become more fully integrated into the economics of digital transformation, or the DX Economy. Big data, social media, artificial intelligence and cloud computing are just some of the technology trends that are helping to make shopping from direct selling companies what Walter Noot, the chief information officer at USANA Health Sciences Inc. in Salt Lake City, calls “stupid simple.”

And prescient segment leaders understand that anything that makes the customer experience stupid simple is simply smart.

Michael Oricchio

Take social media, for example. Gone are the days when having a strong social media presence was considered optional for direct selling companies. Social media is where consumers go first to connect with other like-minded shoppers, as well as to learn about new products and companies.

“Every one of these companies in the direct selling space has to be focused on social media first and the company second,” says Paul Gravette, co-founder of Le-Vel, the fitness-and-nutrition products company based in Frisco, Texas. “It’s more powerful than ever in moving the deal.”

Also in this month’s issue, you’ll learn about New Avon’s Espira health-and-wellness line of products debuting this month. It’s meant to “boost and sustain your natural energy, restore your radiance, and support your overall health,” according to Elana Gold, the company’s chief marketing officer. Of course, company executives also are hoping Espira will be a big boost to the New York City-based beauty brand’s business.

“Avon historically has been an iconic leader in the beauty category,” New Avon CEO Scott White said as he introduced the Espira line to an enthusiastic audience of about 6,000 representatives at a three-day sales conference this past summer. “We absolutely have a commitment to that, but we also wanted to give our representatives a broader portfolio to capitalize in a way that leads to new customers.”

This month, we also help Princess House, the successful kitchenware company based in Taunton, Massachusetts, celebrate its 55-year anniversary with a story on its latest collection and its new—and healthier—direction. Without giving too much away, you may be surprised to learn just how much the introduction of its new Vida Sana line says about the company and where it’s headed.

“Our products have evolved. The company and brand have evolved from breakable to durable—from crystalware to cookware,” CEO Connie Tang tells us. “Marketplace changes, preference changes and even demographic changes—to meet the needs of customers, consultants and business owners, an evolution has occurred.”

Finally, as it has for the past nine years, January marks the official launch of Direct Selling News’ annual Global 100 ranking. Our publication’s signature project has become one of the channel’s most popular events. Join the celebration on April 25 at the Renaissance Dallas at Plano Legacy West Hotel, when we’ll unveil the 100 largest direct selling companies in the world for 2018. Submission qualifications, ticket information and sponsorship opportunities can all be found at dsnglobal100.com. Naturally, any one of the magazine’s staff can answer questions about the research process or the program, so feel free to contact us.

In the meantime, we on the DSN team offer you our heartfelt thanks for joining us for our first issue of 2018 and our sincerest wishes for the happiest, healthiest and most successful of new years.

MICHAEL ORICCHIO
Publisher and Editor-in-Chief

The post The Great New Year Rebooting first appeared on Direct Selling News.

“The first time we were invited to speak at an industry conference I stood up there and made the comment that Ambit was a data processing company. We heard the snickers and laughter in the crowd,” Thompson said. “They thought we were crazy to build our own software. But we ignored them. We didn’t want to be like them, and we didn’t want returns like theirs. It’s all about returns on invested capital. Technology has enabled rapid scale at a low cost, and direct selling has enabled a very attractive cost of acquisition alongside very rapid growth.”

Eleven years later, Dallas-based Ambit is reaping the rewards of such a novel idea in the direct selling space. The company reached $1 billion in revenue before its seventh birthday and has been growing exponentially (270 percent between 2009 and 2016). It also is keeping a solid foothold, at No. 16, on the Direct Selling News Global 100. Executives’ early belief in using technology to send, collect, process, use, share and store data gave the company a head start in a race that everyone wants to now join: a race in which the advantage goes to those who harness the power of digital transformation (DX), a term coined by Massachusetts-based technology and analytics firm International Data Corporation (IDC).

In the DX Economy, smart companies focus on how to embed transformational technology at every level of their organizations. IDC projects that spending on DX technologies—such as data analytics, cloud-based infrastructure, application development and deployment, and any technology that helps a company redefine its operations—will increase from $1.2 trillion in 2017 to $2 trillion by 2020.

Within this new landscape, technology has now become so embedded in business strategy that the digital transformation of every industry, including direct selling, is now leading to seismic shifts in ways in which global business is conducted. Any company looking to stay competitive in the new DX Economy must think, act and plan like a digital native.

Direct selling executives know a little something about redefinition, as those in the channel adjust to new pressure from policy makers, look for new ways to compete in the omnichannel retail environment and respond to rapidly changing global business rules. Executives at some of the segment’s largest players say that if they focus their technology efforts and investments in such DX categories as social media, data analytics and the cloud—none of which are new, but all of which are necessary for remaining competitive—they will have the agility they need to keep up with and stay ahead of these monumental changes.

Social, Science

Using social media to fuel business growth shouldn’t be considered optional for direct sellers, says Paul Gravette, co-founder and co-CEO of Frisco, Texas-based Le-Vel, a fitness and nutrition products company. It should be an imperative. “Every one of these companies in the direct selling space has to be focused on social media first,” he says, because that’s where people go before they go anywhere else when they want to connect with each other and discover new products. “It’s more powerful than ever in moving the deal.”

Walter Noot agrees.

Social media is the new Google, says Noot, the chief information officer at USANA Health Sciences Inc., a nutrition products company in Salt Lake City. The holy grail for online marketing used to be the top spot on a search engine results page, he says. Now it’s the top spot in social media query results, being a conversation leader in Facebook discussion threads and having a prominent place on Pinterest boards. “At USANA, we’re building technology around social media tools,” Noot says.

As the largest company in direct selling, Amway has no doubt that leveraging DX technologies like social media should be among its top operational priorities. “The way people are interacting on the internet? That’s a huge opportunity for us,” says Todd Woodward, Amway’s vice president of communications. “We want people’s businesses to revolve around their lives; the beauty of direct selling is that we have a great opportunity in social and digital tools to make that promise come true.”

Recent studies of buying habits reflect what these executives are saying about the importance of social media. In a 2016 poll, consumer research firm Crowdtap found that 75 percent of surveyed Facebook users search the social media platform for pre-shopping advice and information. More than half of Crowdtap’s respondents said they search social media for discounts. In a 2016 PricewaterhouseCoopers survey, nearly half of online shoppers said that comments and reviews on social media influence their buying decisions; 16 percent said they purchase products directly on social media.

Savvy sellers are keeping pace with this trend and moving their ad dollars where the buyers are. Business development firm Zenith Media Services has projected that global ad spending on social media will grow by 72 percent from 2016 to 2019, at which point it will make up 20 percent of all digital advertising. And more than 70 percent of sales professionals in a 2016 LinkedIn study said they use social selling tools on a regular basis.

If any channel is poised to reap big rewards from the surge in social media commerce it’s direct selling, Noot says. “Social is the perfect tool for direct selling because direct selling is a referral business, and social media is a referral tool,” he adds.

So how do you reach through the trillions of social media users to find your next loyal retail customer?

Executives at the companies we talked to say one of the best ways is to let your top-performing social media influencers do it for you. These influencers—the company’s consultants—are people who have established credibility and bring authenticity and personalization to your products and your brand, and that’s critical to promotions and sales.

“When I’m buying a product through social media, if it’s done right, I’m not just buying from the company, I’m buying from the person,” Noot says.

When influencers post something about their experiences with a product, people listen and respond. More than 2 million people signed up for free accounts with Le-Vel in 2017, and company officials believe social media drove many of those connections. Not all 2 million new account holders immediately purchased product or have become promoters, but posts from Le-Vel promoters on social platforms inspired many people to share personal information with the company, and that’s how relationships start. “How fast our products are marketed is based on how we’re letting brand promoters market in a social media space,” Gravette says. “You have to embrace these people that have the individual ability to effectively put your product out in the marketplace.”

Dana Harrison and Haya Ajjan say there is scientific evidence that influencers extend a company’s reach. As members of the Direct Selling Education Foundation Fellows Program—a partnership that DSEF established to provide college professors with the tools to offer direct selling education to their students—Harrison and Ajjan consult with direct selling company executives and their sales fields to analyze salesforce, e-commerce and social media data. And they’re seeing that when a top performer shares news and information it spreads exponentially—as the influencer’s followers discuss and share the content because they trust the source. “If it’s a promotion that you want to go far, get it to the right influencer,” says Ajjan, an associate professor of management information systems at Elon University in Elon, North Carolina.

Mind Your Data

Whether it’s studying the “social influencer effect” or quantifying the results of a targeted marketing campaign, analyzing data should be a daily activity for all direct sellers, they say. “Being data driven builds a company toward a higher competitive advantage,” Ajjan says. Data analysis is certainly a booming component of the technology sector: IDC has predicted that global revenue for big data and business analytics will increase from $130 billion in 2016 to more than $203 billion by 2020.

So how do you become data driven? Start by making sure you’re capturing basic transactional data, like customer demographic profiles, geographic locations and purchase histories as well as distributor sales and recruiting volume. Don’t assume one kind of data is more valuable than another. All data have potential to reveal underlying trends and motivations among buyers and sellers—which is what you really want to know—so don’t disregard even seemingly benign information. “Companies usually have more data than they realize they have,” says Harrison, an assistant professor of marketing at East Tennessee State University in Johnson City, Tennessee.

It does take higher-level analytics to tap into that potential, though. Knowing that customers in a certain part of the country tend to buy certain products doesn’t tell you why they buy them. Acting on what you think is the obvious conclusion can lead you astray, says Ambit’s Thompson. “There were intuitive assumptions about some of our best customers that we thought would predict their behavior,” he says. “And we found out we were wrong.”

Ambit has had plenty of data to prove itself wrong because it’s been collecting it for nearly 12 years. Even before big data was a big deal, Ambit executives believed there was value in catching and keeping every figure and fact—especially in the commodity business. “We are in a highly competitive space, selling commodity products that are exactly the same,” Thompson says. “The lights shine equally bright; the heat comes out exactly the same way; there’s no quality differentiator in our electricity or natural gas. It’s how they are packaged and how our customers are treated that make a big difference.” To reach and keep its 1.2 million customers, Ambit has to know exactly who will pay for what kind of package.

Noot and his team at USANA look at their data constantly. From web traffic to connection speeds to the percentage of people who self-enroll versus those who are enrolled by someone else, all data feed USANA’s analytics systems, which dissect customer and distributor behavior and learn from it. This machine learning, or artificial intelligence (AI), is at the center of the DX economy, experts say. It makes otherwise static data dynamic.

The algorithm at a company like personal stylist brand Stitch Fix, for example, combines information on the kind of clothing a customer says she likes with information on what she buys and sends back, and over time it “learns” to anticipate fashion choices that even the customer doesn’t realize she is going to make.

Harrison and Ajjan referred to Stitch Fix and other AI leaders, such as Facebook and education-focused technology company Coursera, in their presentation at the Direct Selling Association Fall Conference in November 2017. These companies have reached a higher level of maturity on the “data analytics infusion” model, the professors say. They’re not just analyzing and predicting consumer and consultant behavior, either. They’re using AI to automate key functions at every level of the business. But they also are using AI to augment key human functions, because you can be king or queen of a world of data and still miss a mark, according to Noot. “Logic goes out the window a lot of times in this business,” he says. “We look at trends and sales and numbers, yet there’s such a thing as emotional momentum. You can’t describe it. You can over-predict and overanalyze.”

This is where human intelligence comes back into play. Companies that are successful with AI—which Forrester Research predicts will be a $100 billion market by 2025—know that the brains that created AI didn’t trigger their own obsolescence. These businesses understand how to make AI and humans complementary. “It’s important to keep humans involved,” Harrison says. “As we think of AI, we often consider the possibilities that it will take over our lives, but humans are still critical for unstructured tasks that require high personal touch.”

Cloud Computing

The place that social media has in direct sales and the amount of data companies need to benefit from the DX Economy wouldn’t be possible without the cloud, the system of web-based storage, infrastructure and software and one of the biggest segments of the technology market, according to executives. A recent Forbes article predicted that spending on cloud-based data centers, software and IT services is expected to reach $547 billion by the end of 2018.

“In order to play around with your data, you need cheap space,” says Ambit chief information officer John Burke. “The cloud has allowed us to pour our data into inexpensive space, and the tools have become available that allow us to analyze it.”

Le-Vel certainly wouldn’t be the company it is without the cloud—being completely virtual is core to its brand, according to Drew Hoffman, chief operating officer and chief legal officer. “We’ll do more than $500 million in revenue this year, and we have 55 corporate employees and no office,” Hoffman says. “You just can’t operate efficiently and effectively when you’re that lean without having the right technology, like our custom cloud infrastructure.”

For example, the cloud allows Le-Vel to disregard geography when it comes to hiring. “If we need to add anyone new to the staff, we’re not limited to a radius of resumes. We don’t care where they live.” Cloud technology also allows the company to provide front-line customer service via a completely online support system. While its method is different from a chatbot system—which simulates human responses to basic customer questions—Le-Vel does use smart technology to analyze, prioritize and direct tickets to the proper service representative, reducing the number of customer service staff it needs to employ.

Robust virtual technology has been a major factor in Ambit’s success, too—especially in its international wins. Its recent expansion into Japan took time at first because of how careful the Japanese are about forming partnerships with non-native companies. But once the deal was in place, “we were able to spin up our environment in Japan very quickly because of the cloud,” Burke says. Switching Ambit’s data load to local Japanese data centers—to comply with the country’s data management requirements—would have been much more cumbersome if the engineers hadn’t basically been able to flip a virtual switch.

“Stupid Simple”

Data feeds. Chatbots. Servers and software in the sky. It all can seem, as Burke says, “kind of out there, kind of ‘Star Trek.’ ” But these direct selling executives say it all helps their companies create the most important thing they can offer their customers: personalized experiences that feel low-maintenance because they’re so high-tech. Experts call it the Amazon effect. “Amazon just really made it stupid simple,” Noot says. “You push one button or two buttons and you’re done.”

We want to be able to buy clothing, housewares and services from our mobile phones while we wait at the curb to pick up the groceries we ordered online. And we want our web-based merchants to remember who we are, know what we like, tell us what we might also like, and remember how we pay. “Direct selling companies that do not to have a website that personalizes experiences will be at a disadvantage,” Ajjan says.

Direct selling companies are investing heavily in technology and expertise to make sure to meet customer expectations and stay competitive within the channel and within the general marketplace. Ambit spends 95 percent of its capital expenditure budget on technology, Thompson says. USANA employs hundreds of IT people, Noot says, and its technology expenditures fall in the “sales general and administrative expenses“ category, which saw an increase of nearly $7 million in the third quarter of 2017, compared with the same quarter in 2016. Overall from 2015 to 2016, USANA’s expenses in that category rose by $25 million.

One thing seems certain—operating successfully within this new landscape of digital transformation requires a high level of awareness and commitment on the part of company executives. Is your company prepared to compete in the DX Economy?

January 2018

Click here to order the January 2018 issue in which this article appeared.

The post Technology Trends: Are You Ready for the DX Economy? first appeared on Direct Selling News.