What’s Taking place At Avon? The Rise & Fall Of The Magnificence Model 

The beaming, lipsticked smile of Avon’s salespeople has lastly been wiped. After 138 years,  guardian firm Avon Merchandise Ltd (API) has filed for Chapter 11 within the US, a authorized course of which is equal to a model going into administration within the UK.

Avon has stacked up $78m in liabilities attributable to a number of lawsuits which allege that a few of its merchandise include asbestos, inflicting most cancers.

That is the setting spray which will have sealed the long run for the corporate, which was bought by the Brazilian cosmetics group, Natura in 2020. However it is usually $1.3bn in debt, and in reality, its troubles started years earlier than the present controversies.

Beneath, we study how Avon’s legacy grew to become so smudged, and what small magnificence companies can be taught from the 138-year-old firm.

It’s not over till the Avon girl leaves

It’s arduous to think about Avon with out their well-known doorstep sellers. Often known as Avon girls, or Avon males, these staff have been an early instance of buyer advocacy.

Shoppers have been introduced on as employees who may then personally suggest merchandise to Avon prospects in a approach that felt genuine. However within the years since, Avon girls have gone from being the corporate’s finest asset, to a blocker that has contributed to its fall from grace.

Whereas it was ingenuitive within the Fifties, at the moment’s period of Amazon Ring doorbells and scams has made doorstep pedlars unwelcome to many Brits. Maybe because of this, though Avon’s door-to-door reps nonetheless exist, the corporate has pivoted away from them.

Like many manufacturers, Avon has shifted in direction of the modern-day model of the doorstep vendor; social media influencers. These affiliate companions are a superb strategy to construct rapport with youthful buyers. However as a world agency, Avon has been sluggish to innovate in comparison with shinier, celeb-backed newcomers, equivalent to Selena Gomez’s Uncommon Magnificence.

Emulating Marks & Spencer, a fellow ‘granny’ model that efficiently turned the tide on its decline, the corporate employed a new Chief Advertising Officer this yr for some anti-wrinkle cream. However coming as late as 2024, the technique change is about taking part in catch-up.

We’ve written beforehand about how essential advertising to Gen Z is and can stay in at the moment’s e-retail panorama. Avon’s incapacity to win over this market has led to a gradual decline within the eyes of the buyer, who at the moment view the model as one thing their Mum would put on.

Lack of ability to innovate

At a time when retail has by no means felt much less safe, Avon made the weird transfer of asserting plans to open their first ever brick-and-mortar shops final November.

For a multi-level advertising firm (a enterprise mannequin which is famously direct-to-consumer or D2C), this was a giant swing. It additionally, sadly, turned out to be a miss.

Avon store fronts by no means materialised on the excessive road, and the sense grew that Avon was years behind their beauty rivals, a lot of whom have moved onto social media.

Area of interest make-up manufacturers, equivalent to Bread Magnificence Provide, could promote wholesale in shops equivalent to Debenhams. However they’ll predominantly flog their merchandise on TikTok and Instagram to a longtime, cult following, moderately than making an attempt to draw random foot visitors.

The difficulty means that Avon has overlooked the place its core viewers is now based mostly, which is making it more durable for its product designers and entrepreneurs to listen to Voice of the Buyer.

That private contact

One other downside for Avon has been its product line. Because the UK’s magnificence business widens (it was estimated to be price £22.6bn in 2022), manufacturers are marking their territory by going area of interest; specializing in a selected sub-sector equivalent to haircare or nail care.

Take the viral ‘blursh’ from Made by Mitchell, or P.Louise, which focuses on eyeshadows. Avon, compared, has had no hero product by which to introduce itself to new audiences, partly as a result of its product traces are so numerous.

The issue comes again to personalisation. Whether or not diets or dandruff, customers at the moment need to purchase objects that resolve their more and more particular buyer wants (simply take a look at Hey Klean, the bathe head for Southerners who hate washing their hair with arduous water).

With customers now looking for merchandise that talk precisely to their hair kind, pores and skin color, and complexion, the thought of a ‘do-all’ model like Avon which may seize the eye of each client feels out-of-touch with at the moment’s market tendencies.

It’s no surprise that Avon Worldwide reported a 17% fall in income to £267 million within the final quarter of 2023, attributable to weak gross sales throughout its magnificence, dwelling and elegance classes.

The Large C

It’s not a enjoyable time to be in Avon’s authorized workforce. The corporate has been preventing a whole bunch of lawsuits which allege that the talc in its magnificence merchandise contained asbestos, inflicting most cancers.

There’s not a lot for cosmetics companies to be taught from right here, in addition to don’t promote carcinogens in your lip balms. API has reportedly spent $225m to defend itself in 368 talc-related instances. Even with a billion-dollar valuation, it can not afford the authorized charges.

By submitting for chapter, the corporate has stated it hopes to handle its debt obligations in an “orderly method”. When a enterprise information for Chapter 11, all lawsuits are paused to present the bankrupted firm respiratory room to develop a contingency plan.

Proprietor Natura & Co has stated it can purchase again its non-US buying and selling operations for £97m as soon as the chapter course of is full. The Brazilian magnificence conglomerate additionally bought after which offered vegan magnificence chain, The Physique Store on the finish of final yr.

What’s subsequent for Avon?

Avon, as soon as a family title, has confronted its justifiable share of challenges. However like a well-applied concealer, Chapter 11 can typically cowl up the blemishes of the previous.

It doesn’t imply Avon is able to name it quits. The corporate’s UK arm will stay in operation and, for now, job cuts appear to be off the desk.

Nevertheless, there’s no denying that Avon wants a contemporary coat of lipstick to enchantment to a youthful era. The sweetness panorama has advanced dramatically, and the model dangers turning into a relic of the previous if it doesn’t adapt.

Because the market turns into saturated, at the moment’s make-up manufacturers want a water-resistant USP to construct stronger connections with an more and more segmented buyer base.