By Maghan McDowell
San Francisco Chronicle.
Founded by women with women-focused products, Bay Area entrepreneurs are breathing new life into the staid direct sales business model.
When launching Burlingame-based Ruby Ribbon in 2011, Anna Zornosa faced two challenges: shapewear’s unsavory reputation, and the direct-sales model she planned to use to get her products into the closets of her customers.
“They would say, ‘Oh, I’ve been to those house parties before–I don’t think that’s going to be so much fun,'” Zornosa says.
But that problem is quickly turning into no problem at all. Despite lingering Tupperware-party connotations, direct selling — also known as “social commerce,” in which sales are made directly to a customer without a retail store — has gotten a face-lift from the next generation.
The new direct sales companies are offering covetable fashion and beauty products through legions of sellers who are combining the tradition of personal recommendations with tech tools that are a far cry from peddlers past, and a handful of Bay Area women, including Ruby Ribbon’s Zornosa, are leading the charge.
Among them is Jessica Herrin of Stella & Dot (with jewelry and accessories), Lori Bush of Rodan + Fields (dermatological skincare) and Elenor Mak of Keaton Row (personal styling).
Last year was the best in the past four or five years for direct selling, says Direct Sales Association president Joseph Mariano, who has been representing the organization for more than 30 years.
In 2013, the direct selling sales force in the United States reached a record high of almost 17 million. That’s thanks, in part, to the recession. But the increase in direct sales businesses — “the original social network,” Mariano says — goes beyond sellers with excess spare time and a need for extra money.
It reflects a trend among the younger generation of embracing entrepreneurship; of blending business with the personal; and of flexibility in when, where and how one works, he says. “You can be social, commercial and technological at the same time, so it’s the perfect mix.”
The flexible nature also seems tailor-made for the lives, and social habits, of many women; consider it the original method in which housewives were able to “have it all.” Mariano estimates that more than 80 percent of the direct sales force is women.
Stella & Dot’s Jessica Herrin unflinchingly sites her primary motivation for starting the San Bruno-based jewelry and accessories company as “the opportunity to reinvent flexible entrepreneurship for modern women using a combination of high touch and high tech.”
“High tech” has become a key characteristic of the Bay’s next generation of direct sales companies. Although Mariano recalls a fear during the dot-com boom that the internet would threaten the appeal of purchasing from a human being, “it turns out, direct selling is a perfect compliment to internet sales,” he says.
A comfort with sharing online certainly hasn’t hurt, but whether they’re called stylists (as at Stella & Dot) or consultants (Rodan + Fields), they’re using technology to expand their customer base in ways that go way beyond simple social media.
In other words, the new “door-to-door” is often “screen-to-screen,” and although much of the initial sales still happen in person, the sales possibilities are extended through technology.
Many of these companies, like Stella & Dot, are describing themselves as technology companies, Mariano says. “But they still have that human element that is still critical.”
Stylists use Stella & Dot’s “Dotty” application at trunk shows to personalize a customer’s experience, while Keaton Row has totally forgone house parties or in-person consultations in favor of online-only interaction in providing personal styling services.
Ruby Ribbon’s recently launched training tool, “Connect,” allows its stylists to train “in sips — while she’s doing the rest of her life,” Zornosa says, who grew up watching her mother sell Avon. “I thought, ‘What would my mother’s business have looked like today?'” For many, that might mean bringing smart phones to the sidelines of a soccer field.
“It’s turning her passion into a way to make money,” says Keaton Row’s Elenor Mak, who developed an affinity for the business model while working at Avon before launching the service in 2012 with Cheryl Han. “It empowers everyday people by combining innate creative skills with a business platform and training.”
Helping women — both by making money on their own terms and by developing business skills — seems a major motivation.
Burlingame-based hairstylist Sheri Bass joined Ruby Ribbon as a stylist in August 2012 because she liked that aspect. “It was more of an emotional decision than a financial one,” Bass says. But since then, the single mom has become successful enough to put her son through college, and has grown a team of 47 women. Still, the initial inspiration remains. “I feel like I’ve gained a lot of confidence in helping and mentoring other women and helping them achieve their goals.”
Rodan + Fields CEO Lori Bush says many of the company’s consultants are drawn to a sense of community among other consultants. She’s found that the personal development skills provided through the company’s training programs have helped many women develop a sense of self.
Rodan & Fields consultants rely prevalently on their person-to-person network while using tech to extend the options.
The skincare company provides mobile tools that allow consultants to essentially have their office on their iPad, Bush says.
It also provides personal websites for each consultant that act as a portal to the company’s e-commerce platform. “Technology, in our opinion, has modernized direct selling and made it even more relevant than it’s ever been,” Bush says.
In the land of start-ups, where social networks have made many people a lot of money and women are known for breaking the mold, a re-imagined approach to direct sales makes perfect sense.
“We are a people company, a fashion business and a tech company,” Herrin says. “And we are giving her everything she needs to be successful.”
Be direct.
Here are some Bay Area companies leading the charge in direct sales.
Ruby Ribbon: Sells shapewear, “shaping essentials” (shapeware-powered clothing) and clothing through independent stylists, often through at-home through trunk shows.
Keaton Row: Matches customers to personal stylists who curate clothing and accessories recommendations from e-commerce sites like Nordstrom, Asos and Shopbop–for free.
Stella & Dot: Sells jewelry and accessories through independent stylists, often through at-home trunk shows.
Rodan + Fields: Sells dermatologist-created skincare through independent consultants.
