29/9/2020 How Avon plans to take on direct-to-consumer rivals

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29/9/2020 How Avon plans to take on direct-to-consumer rivals

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Avon plans to take on direct-to-consumer rivals by becoming a ‘high touch, high tech’
business
Far from being intimidated by the emerging rivals on the beauty scene, Avon believes opening its business to new partners, ramping up it speed to
market and investing in new forms of content will propel the brand into 2019 and beyond.

https://www.marketingweek.com/avon-marketing-strategy/ 2/16
29/9/2020 How Avon plans to take on direct-to-consumer rivals

By Charlotte Rogers 25 Feb 2019 7:00 am

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Avon is ramping up its speed to market to take on the DTC players.

The original direct-to-consumer beauty brand, US giant Avon is in the midst of an intense period of brand rejuvenation and digital transformation.

Starting out in 1886 with the ambition of giving women the ability to earn an independent income, Avon pioneered a model of direct selling via local
representatives which has grown into a network of five million women across more than 50 markets.

Yet, despite boasting 90% name recognition and awareness worldwide, Avon is acutely aware that scale and heritage are no longer enough to succeed
in the fiercely competitive billion-dollar beauty market.

Beauty industry stalwarts are being squeezed from every direction by a wave of millennial-friendly direct-to-consumer rivals, including brands such
as Glossier, Fenty Beauty and vegan range Milk, as well as membership services like Beauty Pie.

Conscious of the need to modernise the business and demonstrate its relevance to beauty consumers, Avon recruited James Thompson as chief brand
and beauty officer in November to lead the brand’s global turnaround.

Thompson believes most people would say Avon’s business model of direct selling built on word of mouth advocacy, influence and authenticity is a
good fit for the 21st century. However, he acknowledges that in a world of one-click purchases, shopping with an Avon representative can feel like
“an extra step in the process”.

We are in a turnaround mindset and we are trying to affect change very quickly.

James Thompson, Avon

“We should be winning, but we’ve let our system get a little bit out of date and a little bit tired,” Thompson admits. “So, our three priorities are to
convert awareness to relevance, create a real-world perception of the quality of our products and then communicate that, making that one extra step
worth it.”

The strategy underpinning the turnaround is to turn Avon’s business model into a “modern, high touch and high-tech organisation”. And rather than
being afraid of the competition, Thompson wants to use their success to propel Avon forward. He is a big admirer of direct-to-consumer rivals,
describing them as inventive, with a “fabulous eye, lovely service orientation and a real great grasp of tone, look and feel”.

https://www.marketingweek.com/avon-marketing-strategy/ 3/16
29/9/2020 How Avon plans to take on direct-to-consumer rivals
“What we’ve got on the other hand is the advantage of 133 years of history and more than five million people’s worth of scale and therefore we’re
trying to learn to move at the same kind of pace as those insurgent companies, while recognising we’re a very scaled business,” says Thompson.

He appreciates that will be no easy task, but change is underway. Take product development. Avon has cut its time to market for some products from
a typical cycle of 24 months to just over three months, as part of a wider move to “open up” the business to new supply routes and third-party
collaborations.

Avon took its K-Beauty range to market in 20 weeks.

Tapping into the multi-billion dollar Korean beauty market, Avon partnered with Korean innovation expert Bonne to launch its new K-Beauty range
of masks, going from concept to consumer in 20 weeks. The brand debuted in Russia, becoming the first Korean beauty range to go on sale in the
country, before rolling out to the UK.

Meanwhile, Avon took its range of Molten Metals metallic eye shadows from concept in August to launch in November, while its Lip Tattoo lip
colour pen launched in the UK on a 23-week turnaround and became the company’s biggest make-up launch of 2018.

Alongside speed to market, Thompson is conscious of the need to bring a stronger design aesthetic into its packaging, to develop a clearer idea of
what the Avon brand stands for and gain a better grasp of the brand architecture by cutting out “a lot of the undergrowth” that’s crept up over the
years.

Turbocharging communications
Modernising the way the brand communicates with consumers and its million-strong network of representatives is another central element of Avon’s
transformation strategy.

Thompson’s vision is to mix the best marketing communication techniques of a consumer goods company, with the social selling tradition Avon
pioneered. To do so the company has teamed up with MediaMonks, the creative production company owned by Sir Martin Sorrell’s S4 Capital group,
on a new content studio designed to develop and distribute high quality brand and product content at scale.

Going live in March across Brazil, Mexico and Russia, the ‘always-on’ content hub will develop 12,000 images, videos, gifs and pieces of gamified
content annually for use across Avon’s more than 50 markets. Multi-language and multi-platform, the content will be delivered weekly to its network
of representatives.

“Historically we’ve lent into a rather traditional model of marketing; there’s nothing necessarily wrong with that, major campaigns and large media
buys, but we have out there all these entrepreneurs that really want to work with us and want to be proud of our products,” says Thompson.

“The content engine will give them content tailor-made for the different channels, so they can share it on the ones they like using, from WhatsApp to
Facebook and Instagram.”

The idea is to provide a framework, tone, look and feel for the brand, that then gives the representatives the space to create “hyper-localised” content
which fits the nuances of their specific markets. Going forward, Thompson wants the Avon representatives to become “micro-influencers” who create
content and post it themselves, allowing the brand “let go of control a little bit”.

“What I’m very keen to avoid is advertising intrusion, which is one of the reasons we’re putting the power in the hands of our representatives and it’s
up to them what they do,” Thompson adds.

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29/9/2020 How Avon plans to take on direct-to-consumer rivals
“We’re just going to make sure it’s in a format that will work for them and we think it will be more effective when they start posting this content
under their own name, with their own thoughts and own advice.”

Avon
Lip Tattoo, Avon’s biggest launch of 2018, landed in the UK on a 23-week turnaround.

Working closer with the representatives to collaborate on content is a shrewd move. Last month Avon was criticised on social media for the tone of
the US campaign publicising its Smooth Moves anti-cellulite gel, which body positivity campaigner Jameela Jamil described as “cellulite shaming”.

Avon UK immediately distanced itself from the #NakedProof campaign, while the US team admitted the messaging had missed the mark and would
be removed from all marketing materials going forward.

Staying hungry
Aside from the focus on modernising its communications strategy, Avon is ramping up the focus on its website, which notched up double digit growth
in the second half of 2018.

Thompson admits that in the past the company was a “little cautious” in its approach to online, as it did not fully appreciate that having a vibrant
online business would grow the brand for everyone in the Avon community.

However, the business now sees itself as fundamentally a service-based organisation helping “other people serve other people” and strongly believes
that one-to-one selling and online are entirely complementary.

A big part of pushing the brand forward in 2019 also comes from working with the right partners. Thompson is keen to collaborate with a “tight and
close team” of agencies from different disciplines who combine the instincts that come with years of experience, with the vigour of a startup.

We should be winning, but we’ve let our system get a little bit out of date and a little bit tired.

James Thompson, Avon

Currently the brand is working with MediaMonks on the content studio, visual identity organisation Bloom London and creative agency Wunderman
Thompson. For any agency to appeal to Avon it has to show hunger.

“We are in a turnaround mindset and we are trying to affect change very quickly. We want to have an impact in the short term and we want to have
partners who have got that hunger,” Thompson explains.

“It’s really a tight group of people. We are always on the lookout for new talent and new ideas, but we don’t want to encumber it with heavy
processes. We want to enjoy working together and move quickly.”

READ MORE: Why direct-to-consumer beauty brand Glossier is ripping up the marketing playbook

Opening up opportunities
Thompson describes the chief beauty and brand officer role at Avon as a “once in a lifetime career opportunity” to turnaround a big brand many
consumers hold affection for, which also faces a lot of challenges ahead.

He comes from a background in FMCG and the drinks industry, having spent a decade at Unilever, before assuming a series of senior marketing roles
at Guinness prior to the formation of Diageo in 1997.

Thompson then spent 16 years at Diageo across a number of positions including CMO for Asia Pacific, global managing director of the company’s
luxury portfolio, Diageo Reserve, and chief marketing and innovation officer of Diageo North America.

In fact, Thompson sees clear synergies between the beauty and drinks businesses in terms of both brand and leadership.

“Everyone thinks beauty and spirits are all about image, and of course they are about image, but they’re also underpinned by truth and authentic
stories,” he points out. “So, it does matter that there’s Nobel Prize winning science in our leading skin cream in the same way that the stories about
Scotch whisky matter to Diageo’s brands.”

There are also parallels between the beauty and drinks industries in the use of influencers and third parties, says Thompson, who insists that in both
sectors it is crucial not to control the message too much and instead build the right framework to ensure the brand is well represented.

“On the leadership front, in a big organisation learning how to cut through and affect change quickly are skills that Diageo prized and certainly at
Avon we value them very highly because speed in large organisations is one of the most powerful things you can have in business,” Thompson adds.

Another parallel between the drinks and beauty sectors comes with Avon’s decision to “premiumise” the brand through innovation, thereby allowing
its representatives to sell its products at a higher value and create stronger individual businesses. Thompson sums up Avon’s overall ambition as
bringing to life the “power of beauty to transform lives”.

“Whether it’s access to the products digitally or in person, whether it’s the ability to grow your own business or whether it’s the ability to stand up
against social ills and do something about it, it’s about access, value, standing for something and refining our journey for the modern age,” he
concludes.

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29/9/2020 How Avon plans to take on direct-to-consumer rivals
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