What Are Some Of The Key Areas Of Focus For Avon Products ?

by Trefis Team
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Avon Products is currently on the path to recovery after several years of poor performance. Avon’s sell-off of its North American business, receiving a $650 million funding, and subsequently undertaking a few major restructuring plans last year seems to be finally helping it in its revival once more. This month Avon presented at the ICR 2017 and these are some of the key areas of focus currently for the company:

  • Avon’s top 10 markets are: Brazil, Mexico, Russia, Philippines, The UK, Argentina, Colombia, Turkey, Poland, and South Africa. Avon is the Number 1 direct selling beauty company in all these markets, except Brazil where it is Number 2. Avon has currently decided to focus on its top ten markets for most of its growth. These markets are growing at a faster rate than the total company’s growth rate.
  • The company is focusing on its top 40 brands for growth as these brands together contribute to 80% of its revenues.
  • The company is building brands by categorizing them into three tiers based on customer demands, namely: Upper Mass, Mass, and Value.
  • Avon’s current strength of 8 million active representatives make it the world’s largest direct selling workforce. The company is focusing on better representative engagements in its top markets.
  • Avon’s three year transformation plan includes: Driving out cost, Improving financial resilience, and Investment in growth.
  • Avon’s social media presence has  increased by over 25% y-o-y over the last year with it having the third largest fan following among beauty brands (~20 million) on Facebook, over 280 million YouTube video views, and over 1.9 million Instagram followers. Along with increasing its investments on advertisement, the company is also shifting most of its campaigns to the digital platform.
  • The company’s long term financial goals include: mid-single digit constant dollar revenue growth, 1% to 2% representative growth, and low double-digit adjusted operating margin.

Have more questions about Avon Products (NYSE:AVP)? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Avon Products

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