By Alistair Gray From Financial Times

The Avon lady is getting a digital makeover in a belated campaign by the beauty company to drag its direct sales business into the 21st century.

Up to a million members of Avon Products’ global army of doorstep sellers are to receive training by the end of the year in how to exploit social networks to promote cosmetics.

The push into tech-driven “social selling” is part of what Avon executives are calling a revolution at the company, founded in 1886 by a door-to-door bookseller.

Yet the initiative is likely to encounter scepticism given Avon’s long struggle to adapt to the age of ecommerce. 

“Over the last number of years we lost our way,” Jan Zijderveld, who was installed as chief executive in February, told the Financial Times. “But the beauty market is growing, the direct selling market is growing – the core and essence of what Avon has to offer is still absolutely relevant.”

It is Avon’s latest attempt to reverse a multiyear slide in revenues and an exodus of sales reps. Previous efforts to harness technology have failed to spur a turnround.

Avon, based in west London and listed in New York, has lost to rivals in the booming yet rapidly changing beauty sector. Its market capitalisation has collapsed from 2004 highs of almost $22bn to $1.1bn.

The digital training forms part of $300m investments the company is making, disclosed at a presentation for investors on Friday. At the same time it is also planning to cut $400m worth of costs by 2021. 

As part of the shake-up Mr Zijderveld, who spent 30 years at Unilever, is planning to reduce the number of products Avon offers.

“We have a huge tail – many products are selling absolutely minimally,” he said.

He wants Avon Ladies, who sell via printed brochures, to also become “e-representatives”, targeting contacts through Instagram, Twitter and Facebook. “Friends selling to friends … You trust your friends, the lady you may know.”

“We’re willing to question everything and do things in a new way,” he added. “But the strategy is one thing – in the end it’s about execution.” 

Savvier operators have outflanked legacy companies with techniques to target younger image-conscious shoppers such as partnerships with YouTube personalities.

Jonathan Myers, a former Procter & Gamble executive who joined last year as chief operating officer, said: “If I were to say we need to play catch-up in e-commerce, that would be a good example of British understatement. What we need to do is actually trigger a revolution inside Avon.”

Having separated its North America business in 2016, Avon’s largest markets include Brazil, the UK and South Africa. It is targeting expansion in other countries including India and China. .

Activist investors this year demanded Avon put itself up for sale, although a truce was reached in March when Barington Capital secured a boardroom seat.

Copyright The Financial Times Limited 2019. All rights reserved.

For more on this story go to: https://www.ft.com/content/54930e72-be03-11e8-8274-55b72926558f

NOTE: The above article was written and first published by the FT in September 2018. See also today’s The Publisher Speaks – “Avon Calling”.

Related:

Avon Products Launches Strategy To “Open Up Avon” and Return To Growth

Strategy Focused on Rebooting Direct Selling, Modernizing the Brand, Unlocking Digital & e-Commerce Capabilities, and Driving a Performance Culture

Capturing Strategic Breakout Opportunities to Accelerate Revenue and Margin Growth by 2021

Management Presentations at Investor Day Begins at 9:00 AM EDT Today, Available via Webcast at Avoninvestor.com

LONDON, Sept. 21, 2018 /PRNewswire/ — Avon Products, Inc. (NYSE: AVP) today will host its 2018 Investor Day and introduce the Company’s new long-term strategy to “Open Up Avon” and return to growth.

“We are excited to share our plans to Open Up Avon as we continue to build on the progress we have made in the last eight months to reboot direct selling, modernize the brand, leverage strategic breakouts and begin a cultural transformation,” said Jan Zijderveld, Avon CEO. “We have assessed our operations, our markets and value-creating opportunities, and are implementing a plan to make Avon more attractive to beauty entrepreneurs and accessible to more consumers. Critical elements of the plan are expanding recruiting and retaining more Representatives, capturing our share in fast growth areas, opening our eco-system to more third party providers, and ensuring we have the right team and execution rigor. We are confident that these efforts can increase shareholder value and position Avon to become the leading digital social selling beauty company.”

Mr. Zijderveld continued, “Avon is grounded by our steadfast commitment to empowering women. Our ‘Open Up Avon’ strategy will enable us to provide more relevant earnings, contemporary products and meet the dynamic needs of women globally. While transformations of this nature take time, we are already working hard and committed to executing on these new strategic breakout priorities and building the Avon of the future.”

At today’s event, members of Avon’s leadership team will present the core tenets of the strategy including:

Pivoting to a New, Open Avon

• Focusing on restoring competitiveness, modernizing and digitizing the Avon brand, and capitalizing on strategic breakout opportunities by:
  • Recruiting and retaining more Representatives by increasing Her earnings and training with intent;
  • Opening up access to all consumers anywhere, anytime;
  • Capturing share in fast growth areas by expanding into those categories, markets and channels; and
  • Managing our product portfolio, winning in all price tiers, expediting innovation both in-house and with outside partners.
• Leading a performance-based cultural transformation aimed at:
  • Identifying news ways of working by enhancing speed and agility; and
  • Injecting new capabilities within the sales organization and our digital initiatives.

Rebooting Avon’s Social Selling Proposition

• Segmenting communication and training for Her based on her intent and expectations; 
• Providing her with products and tools that transition Her to becoming a trusted Beauty Advisor to Her customers; and
• Injecting new sales talent in key markets.    

Modernizing Avon’s Brand and Unlocking E-Commerce for the Future

• Refreshing the brand identity to capitalize on Avon’s strong brand recognition and provide relevant, on-trend innovative products; and
• Unlocking e-commerce, data and digital capabilities, as well as an open and simplified eco-system to increase access, reduce effort and provide tools to improve Her earnings.

Focus on Value Creation and Simplification

• Avon also intends to outline near-term cost savings and capital investments to support the strategy and accelerate revenue and margin growth.

Webcast
Today’s investor day presentation will begin at 9:00 a.m. EDT and will be webcast live at www.avoninvestor.com.

About Avon Products, Inc.
Avon is the Company that for 130 years has proudly stood for beauty, innovation, optimism and, above all, for women. Avon products include well-recognized and beloved brands such as ANEW, Avon Color, Avon Care, Skin-So-Soft, and Advance Techniques sold through approximately 6 million active independent Avon Sales Representatives. Learn more aboutAvon and its products at www.avoncompany.com.

Forward-Looking Statements 
This material contains “forward-looking statements” that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to revenue trends, cost savings, efforts to implement new digital and e-commerce strategies, improved Representative engagement and service, product launches and commercial and digital spend. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the possibility of business disruption, competitive uncertainties, and general economic and business conditions in Avon’s markets as well as the other risks detailed in Avon’s filings with the Securities and Exchange Commission. Avon undertakes no obligation to update any statements in this material after it is posted to the Investor Relations section of our website.

Contacts
INVESTORS: 
Amy Greene
Vice President, Investor Relations, Avon Products, Inc.
914-935-2172 
[email protected]