Nu Skin Enterprises CEO Ritch Wood sees technology and sustainability as the keys to the company’s ongoing success.
For Nu Skin Enterprises CEO Ritch Wood, two current trends lean in his company’s favor: people around the globe are increasingly seeking to look and feel better about themselves. Furthermore, as a multi-level marketing company, Nu Skin has enthusiastically embraced the social media era, which according to Wood, who previously served as CFO, has perfectly proven that consumers themselves can most often be a company’s best marketing tool.
“The existing landscape I saw was a world that looks for opportunity: opportunity to earn additional income, opportunity to share products that they love, and opportunity to look and feel better about themselves,” Wood told CEO Magazine on his perspective upon taking over as chief executive officer in 2017. “Millennials are really excited about sharing everything they see and feel, and I saw it as the perfect way to offer them a terrific opportunity, and grow our business at the same time.”
Founded in Provo, Utah, in 1984, Nu Skin Enterprises is a US multilevel marketing company that develops and sells personal care products and dietary supplements under its Nu Skin and Pharmanex brands. The company began its first international operation in Canada in 1990 and today markets its products in nearly fifty markets around the world through a network of approximately 1.2 million independent distributors. In 2018, Nu Skin enjoyed revenues of $2.68 billion worldwide.
“We were kind of the original social media business where people shared products person-to-person,” Wood said. “With technology, that personal reach is much larger and our ability to spread our message much broader. I felt like these are trends we can take advantage of.”
Looking and feeling great
Nu Skin offers a range of personal care and nutrition items from cosmetic and skincare products to stamina boost capsules and vitamin-based dietary supplements, which are sold through a multi-level marketing system (MLM) where revenue is derived from a non-salaried workforce with earnings of the participants derived from a flexible compensation commission system. Nu Skin was ranked the world’s number one at-home beauty device system brand for 2017 and 2018 by Euromonitor International.
“We continue to believe that innovation is at the heart of our success, so product innovation is really critical,” Wood highlighted. “We‘ve become very successful in selling beauty devices, so we think we can continue to innovate on that front, with additions to the devices we are currently selling, as well as new devices in the future.”
“Secondly, we believe there is going to be an increasing demand for even greater sustainability, as well as the traceability of our products,” he elaborated. “We’ve put a heavy focus around what we call controlled environment agriculture, which means being able to grow many of our ingredients indoors where they can be completely sustainable, using far fewer water and land resources, and also being able to trace exactly where the ingredient came from.
“Those are areas we think are going to be really important to consumers going forward, and where we’ll continue to innovate. It includes an ability to manufacture our own products and an ability to source our own sustainable packaging. We’ve made acquisitions to vertically integrate some of those areas of our business as well.”
Nu Skin currently sells its product range in approximately fifty markets around the world and has designed a three-pronged strategy to facilitate the process and grow its customer base which Wood describes as consisting of three “P”’s—platform, products, and programs.
“The first one is really the platform we use, and that’s our technology, social media, things like that,” he explained. “The second is our products, making sure that they’re great value, innovative, and products our customers want to use. The third is our programs, which is how we incentivize and motivate the sellers of our products to be successful, and that’s through rewards and compensation.”
“Our business is global, and our goal is to really make a borderless opportunity for our sales leaders to share products and share our business opportunity around the world,” Wood elaborated. “We think that’s a great way to continue to gain synergy. The Internet and social media are truly global. That’s the way our business has been set up, and so those two things work very well together.”
The greater good
Nu Skin has also been sure to put its global success to positive use by empowering the less fortunate citizens of the world through a combination of business opportunities and innovative social programs. In 1998, the company created the Nu Skin Force for Good Foundation: a nonprofit organization whose mission is to improve the lives of children by providing education, health, and economic opportunities.
For example, the Greater China Children’s Heart Fund was created in 2008 to help address the approximately 200,000 new cases of pediatric congenital heart disease that occur each year in China. Two-thirds of such children do not receive treatment on time because of their families’ inability to pay for necessary surgeries. Because of the Greater China Children’s Heart Fund, however, more than 8,500 children have received lifesaving surgeries.
Elsewhere, the Nu Hope Library Project in Korea has remodeled 22 libraries in rural areas such as the Chungbuk Province and Gyeongnam Uiryeong Daeui province in South Korea. The goal of the project is to better the lives of children by giving them access to reading materials and the latest in technology to promote literacy.
In East Africa, the School of Agriculture for Family Independence (SAFI) is dedicated to helping the people of Malawi learn better agricultural techniques to provide for themselves and their families. The school hosts as many as 40 farmers and their families while they are educated in fish farming, drip irrigation, sustainable farming, forest conservation, tree farming, animal husbandry, nutrition and other subjects.
In addressing Nu Skin’s approach to its supply chain, Wood used the term “value stream” to describe the way the company chooses its strategic procurement partners around the world, which include a mix of owned manufacturers and a number of secondary and tertiary vendors it partners with to ensure the best product is delivered at the highest quality, and on time.
“Our primary manufacturing happens in China and the US, with additional manufacturing in Southeast Asia, Korea and Taiwan,” Wood explained. “The ability to predict exactly what our sales are going to be of a certain product is probably one of the most complex functions at our company, so having suppliers around the world who can react quickly and scale up or down, according to our needs, is really important.
“We always pay on time and we treat our vendors with respect because we know that our success and profits are based on their success and profitability as well.”
Wood believes that the secret to Nu Skin’s success is a customer-obsessed focus that aims to give the consumer an amazing experience every time they come into contact with the company, and wherever they are in the world, driven by the company’s emphasis on technology and commitment to meeting sustainability goals.
“That includes technology in how we design and make our products, how we source our ingredients, how our sales leaders share our products, and how customers find out about our products,” Wood stressed. “I also believe that the companies that succeed going forward are those that focus on being sustainable.”