Online Exclusives

Avon Eyes White Space in Beauty

By Christine Esposito, Associate Editor | February 19, 2010

Direct seller will also utilize internet platform to build representatives� businesses.

Coming off a year in which it delivered “standout results” in a tough economic environment, Avon wants to drive continued top line growth in 2010—and Chuck Cramb, vice chairman, CFO and chief strategy officer, told attendees at the CAGNY 2010 conference how the firm plans to do so.

Speaking in Boca Raton, FL, Cramb reviewed Avon’s success in 2009 and provided a glimpse at some of its plans for 2010, which include pursuit of “white space” areas within beauty and increased utilization of internet-based technologies and social networking.

As examples, Cram pointed to possible expansion of the Anew brand’s anti-aging offerings into color cosmetics and personal care sectors as well greater emphasis on hair care,a business that accounted for just 5% of Avon’s total CFT sales in 2008.

In hair care, Avon has had recent success in Latin America; in the third quarter of 2009 it launched Advance Techniques, a new hair color product, and sold 9 million units by the close of the year, Cram noted.

In terms of expansion, Avon is also looking to outside its core beauty sector for growth and is “reshaping its non-beauty” offerings.For example, the firm is planning a global rollout of its a reorganized/harmonized jewelry line.In addition, Cram suggested the firm may also streamline non-beauty offerings, with potential category exits in home cleaning, appliances and entertainment and leisure to make room for greater focus on hair care, personal care, and “category adjacencies.” Opportunities may include men’s, sun products and health and nutrition, according to Cram.
 
Advance Techniques is a big hit in Latin America.
Another 2010 initiative at Avon is continued expansion of its global Internet platform. Rolled out to four markets in the third quarter of 2008, Avon had 59 markets up and running by the end of 2009 and its goal is to have all 65 markets active by he third quarter this year.

According to Cram, with its core internet platform in place, Avon is also adding functionality aimed at enhancing representative productivity, including the addition of online ordering and product availability verification—cited as “a big change for us,” by Cram—as well as integration social networking websites that allow representatives to integrate Avon content—while adding customer “stickiness” for the company.

“If you think about, Avon is the original social network,” Cramb told attendees. “We are high touch, and if we combine that with high technology, we have the ability to help a representative expand her business.”




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