Avon enters new channel with first ‘experience centre’

From the C-Suite newsletter: How the 105-year-old company evolved its direct selling model to solve expansion barriers.

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Over the last few years in Canada, beauty company Avon has been forced to evolve its direct selling model, traditionally focused on door-to-door sales and education, in an effort to keep up with a fast-changing industry.

In 2018, for example, the company launched an ecommerce platform allowing its independent sales representatives to open their own online Avon storefronts. The goal was to create a “social selling ecosystem where the representative remained at the centre of it all,” says Avon Canada president and general manager Daniel Park.

Under the model, each online sale is credited back to an Avon rep even if the customer doesn’t have one, ensuring that representatives earn a commission every time an order is placed. “We feel that this is key in the evolution of direct selling,” Park says.

Now, amid a pandemic that has rocked the physical retail sector, Avon is taking further steps to diversify its channel mix with the opening of the first of three planned bricks-and-mortar “experience centres” aimed at connecting with a new generation of customers.

Studio_renderingThe first Studio 1886, as the concept is called, has already opened at the base of Avon’s Canadian headquarters in Montreal, and the company plans to open additional locations in other major markets including Vancouver and Toronto.

The centres will serve as a “home base” where Avon representatives and customers can meet, sample and discover the company’s portfolio of brands, which includes VDL, The Face Shop, Belif, Dr. Belmeur and Isa Knox. The space includes a reception area, a café and lounge space, product displays, ordering stations, spa experience, training area and conference room.

Once COVID-19 restrictions have lifted, the flagship shops will give customers and representatives access to mini spa treatments, beauty master classes and product launch events – which, until things return to normal, will take place virtually or at a much smaller scale.

“The purpose of the space is to showcase Avon and its brands, making them accessible to our representatives,” Park says. “Its amenities allow for an immersive brand experience through product displays and demonstrations, product launches and in-person beauty experiences – all in a fun and inviting atmosphere.”

Studio 1886, then, serves the dual purpose of encouraging sales of Avon products – which should help representatives turn a greater profit – while also getting more people to sign up as sales reps. It does not, however, act as a store in the traditional sense.

Transactions don’t take place behind the counter, as in traditional retail outlets. Rather, customers can order online from tablets available in store and have them delivered to their home or through their representative.

P1020521To date, Park says the brand’s communications strategy has focused on reaching Avon reps through behind-the-scenes footage and a virtual launch event. In addition to spreading the word on social, the company has invited representatives to visit the space with their customers in order to build awareness and create a more personalized brand experience, he says.

While COVID-19 has negatively impacted many retail businesses, particularly those without the digital capabilities required to move online, the disruption may prove to be a boon to the direct selling industry in the long-term.

Since the spring, Park says Avon’s online sales have increased “significantly” as more consumers turn to online channels. Early on in the pandemic, the company also saw a 15% increase in new representatives. This is likely because the model provides an additional earning opportunity and a flexible schedule for sellers, which many parents found helpful, he says.

“For better or worse, our industry tends to do better when times are a little tougher because people are looking for extra earnings, opportunities,” Peter Maddox, president of the Direct Sellers Association of Canada, told Retail Insider back in May.

However, despite that trend, the category continues to face many challenges. Beauty players, for one, have struggled with going hands-on for trial these past several months. According to Park, Avon has responded by adhering to government health and safety measures (such as PPE for its Studio 1886 staff) and by offering trial-size samples for customers to take home instead.

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