The struggles of another legacy brand: Avon

Screen Shot 2015-04-15 at 8.07.51 AM

The famous doorbell sound and the welcoming voice that proclaimed “AVON CALLING,” is remembered by many as beauty products sold to you be a friend or neighbor. Yet, times have changed as the do in so many traditional businesses. “Avon Weighs Sale as Woes Deepen” in today’s WSJ is yet another wake up call to legacy brands that the market has a short memory and more nimble competitors can quickly outmaneuver slower moving giants. I remember, several years ago meeting Andrea Jong who at that time was CEO of Avon. It was a genuine moment when she entered the room. She had real presence and spoke quite eloquently about the role that Avon plays in empowering women. Avon has always been much more that a beauty products company because the business model created armies of women who helped each other. Interestingly, the door-to door sales approach is still going strong in developing and international markets, which now represent a surprising 80% of the company’s current revenue. In the U.S competition from other direct sellers like Amway, Mary Kay and Herbalife plus retail competition from the mass market beauty brands has lowered Avon’s market share to 4.3% from a previous high of 10% in 2007. So now, when you hear the words “Avon Calling,” it is most probably the phone ringing at a NY investment banking firm looking to find a buyer for the US business. The brand will survive because it has significant goodwill but most probably needs a new distribution strategy. I wish them luck.

Leave a Reply

Your email address will not be published. Required fields are marked *