Farewell Avon, hello new-look direct sales

  • Opinion
  • April 10, 2018
  • Sarah Dunn
Farewell Avon, hello new-look direct sales

It's been a month or two since Avon announced it's pulling out of Australia and New Zealand. The Register editor Sarah Dunn considers its legacy, and the double-edged sword of heritage branding.

My family didn’t really go in for Avon – or cosmetics of any kind – when I was growing up in 1990s New Zealand, but back then, that was no obstacle to Avon’s ubiquity. Catalogues lay piled up on kitchen tables at my friends’ houses; novelty soaps and talcum powder cluttered grandma’s bathroom bench; and an Avon-branded hamper with a stuffed toy, an exfoliating glove and some bath salts was always a pretty exciting birthday gift to receive.

However, those days are over. Not only has the world of beauty moved on from strawberry-scented glitter gel and hair mascara, but Avon announced in February it would be pulling out of Australia and New Zealand permanently.

In its statement, the company cited local performance; the direct-sales conditions in our local market; and potential for growth as factors in its decision to leave. Apparently, Avon’s strategy charting a global return to sustainable, long-term profitable growth didn’t have room for Australasia.

When you consider how many casual salespeople Avon had, and how varying their levels of engagement and professionalism were likely to be, the backlash that followed this announcement was predictable. There were allegations across Avon’s social media channels that the company didn’t inform its representatives before going public, and much bitterness was aired.

Intuitively, Avon’s departure seems appropriate. It’s hard to picture Avon thriving in today’s market – it’s made an attempt to modernise its branding and products, but it still carries a strong association with the unfashionably-recent past. There’s just something desperately uncool about the aspects of Avon that everybody remembers, even if today’s reality is wholly different.

While Avon seems to believe that direct-sales itself is trending downwards in New Zealand, a new breed of direct-sales companies has aggressively moved into its territory over the last few years.

Anecdotally, I’ve been told that when American skincare company Arbonne launched in New Zealand in 2016, more than 5,000 people showed up to the launch event. A similar company from Australia, Nerium, has maintained a relentlessly slick social media presence since arriving on our shores in 2017, and there’s a host of successful direct-sales companies targeting the growing health and wellness category with products like essential oils and protein powders.

In the wake of Avon’s shut-down, I spotted representatives from other new-breed direct-sellers Young Living and Rodan + Field approaching disgruntled former Avon sales reps online – typically in response to Facebook posts criticising Avon. The competing representatives promised greater job satisfaction and higher income at these newer companies.

It’s to be kept in mind that many direct-sales companies reward those who successfully recruit new sales representatives, and in the case of some, these rewards make up the bulk of representatives’ earnings. I was recently spellbound by a 2016 documentary, Betting on Zero, which explains how this dynamic contributed to the growth of multi-level marketing giant Herbalife.

It’s easy to forget about the direct-sales economy when you’re not directly engaged with it, but the saying “there’s riches in niches” is certainly true of this retail category. What a shame that Avon couldn’t make it work in New Zealand.

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