Avon’s efforts to modernize: does it need to do more?

By Lucy Whitehouse

- Last updated on GMT

Avon’s efforts to modernize: does it need to do more?
The beauty giant has been making ambitious efforts to turn its faltering fortunes back around of late, but with its recent announcement of a Q2 sales decline, is it doing enough?

Some efforts that Avon has made to modernize include adoption of online sales channels and the launch of an interactive e-brochure​, and through these efforts, the company is aiming to make its proposition more attractive to digitally-savvy, connected millennial consumers.

But some market analysts suggest that the latest sales figures show the international beauty giant needs to be doing more to turn its fortunes around.

Speed up the turnaround

GlobalData’s Associate Consumer Analyst Theodore Delimaris, is one market expert who reckons that while Avon’s efforts are heading in the right direction, it needs to continue to be ambitious and to speed things up.

Avon will have to implement its turnaround plan in a shorter time framework to increase sales in this growing and competitive market​,” he says.

“According to the company, their 3.1% year-on-year Q2 revenue decline was largely attributed to losses in the South Latin American market – primarily Brazil.

“However, Avon still have a long way to go to modernize its brand to make both its product offer and sales-model more appealing to consumers and the company’s sales representatives alike.

‘‘The company’s old-fashioned door-to-door marketing model remains an issue for its sales representatives.

“The attrition rate of the company’s sales representative base remains high, recording a 4% year-on-year reduction in active sellers in Q2 - unchanged from the previous quarter."

Modernizing sales is helping

Delimaris notes that online sales channels have boosted sales in some areas.

There are encouraging signs with existing sales representatives increasing their average orders by 5% in Q2 assisted by more direct online sales,” ​he suggests.

“In embracing the online sales channel Avon’s offer is also becoming more appealing to millennials who may have previously shunned the brand for being old-fashioned.”

Now to modernize product offering?

Moving forward, Delimaris suggests that consumers today don’t just want digital solutions, they want higher quality, modern products to match.

The challenge for Avon is to increase its new product development to provide the quality, specificity and novelty of range offer that characterizes what millennial shoppers are looking for​,” he says.

Indeed, Avon’s CEO’s drive to shorten the new product development cycle with examples being the recent launches of innovative new make-up and fragrance products should lead to improved sales over the next quarters​.’’

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