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Avon's makeover: A world affair brought home

April 15, 2013 by Lisa Biank Fasig — Director, JZMcBride and Associates

When I was a teenager my sister sold Avon products. She was actually pretty good. Our house was filled with Skin So Soft lotion, Sweet Honesty perfume and cat-shaped brooches.

But once I started working, I quickly graduated to department store-quality skin care and cosmetics. Avon was convenient, but it never represented prestige.

So it didn’t surprise me when I read this week that Avon was cutting 400 jobs and is exiting entire markets in Europe, the Middle East, Africa, South Korea and Vietnam. What surprised me more is that Avon sold its products in South Korea and Africa.

The headcount reduction is part of a global $400 million cost savings initiative. But this is just the start. According to Avon’s annual report, the cost-cutting plan includes “a targeted global headcount reduction of approximately 1,500 positions and related actions.” It expects to finish these efforts, largely, by the end of 2013.

According to one report, Avon employed 39,100 at the end of 2012, and counted more than 6 million active sales representatives. That’s a lot of sales reps — enough to fill Houston three times over and basically one rep for every 570 women in the world.

With all of those feet on the ground and access to so much personal information, I would think Avon would have a serious edge on understanding the preferences of its customers. But I imagine a lot of insights can be lost in the sales channel, or just bottled up in it. How often, I wonder, do sales associates share personal details about customers with the parent company? And once that sales associate leaves, all that valuable information goes with her (or him).

So Avon is reorganizing its operations and focusing on emerging markets while exiting unprofitable ones. After seeing several pink Avon pamphlets scattered in my neighborhood street recently, I wish it luck.

About Lisa Biank Fasig

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