In a toy shop window there are kites and a motorised model of a boy forever sledging down a snowy slope. Further up the high street in Suffern, New York, the Lafayette cinema promises Wurlitzer organ recitals on Saturday mornings. Even the fact that the town has a high street seems like a throwback to an older America, one where the neighbours knew your name and local shops had yet to be closed down by Wal-Mart.
But a short walk up the main street, a shimmering 225,000 sq ft building of glass and steel — the newly opened research and development arm of Avon, the cosmetics giant — reminds you that this is the 21st century.
Avon’s origins reach back more than 120 years and the company has been cooking up cosmetics in Suffern since 1897. And like Suffern, there is something slightly quaint about Avon. In the internet age it still uses an army of women to sell its wares door-to-door. But that fusty image hides a formidable enterprise.
Avon employs 4.9m sales reps across the world, 160,000 of them in Britain. Newspapers and magazines are full of ads for highly priced cosmetics and fancy face creams. They may get the publicity, but few match Avon’s scale or reach. Two out of every five women in the world have bought an Avon product in the past year.
But for all its size, Avon’s age is showing. Sales have slipped and its chief executive, Andrea Jung, has said Avon needs a radical makeover.
It is a makeover that in large part will start at Avon’s new R&D headquarters. The steel-and-glass block contains all the latest high-tech equipment for developing skin-care products, perfumes and cosmetics. Smell chambers keep humidity at zero and all ambient pongs at bay as highly trained noses look for the right “pumpkin” notes for this autumn’s ranges. The colour cosmetics lab is a giant light box, lit by special bulbs to create a steady northern light, the better to judge one red tone from another.
There are fake-nail bars and hair salons to test products, computer scanners that read a human face to assess skin damage and the effectiveness of treatments. The labs contain fridges full of the human tissue cells used to assess the latest anti-ageing remedies.
Oval-shape “think tanks” rise out of the lab’s spookily quiet corridors. Avon set them up for its 20 PhDs and other scientists to “brainstorm”. Notes are clipped to lamps. “Partition coefficient” reads one note, “antibacterial antiseptic” reads another. When staff are not working, they are supposed to lounge on the lip-shaped sofas or giant button-shaped stools. It’s a Willy Wonka chocolate factory for girls.
As yet, nobody is lounging. The R&D lab has been open for eight months but still doesn’t have coffee in its communal coffee spots. Avon built a full-scale library stuffed with magazines and newspapers, hoping to encourage staff to read more widely and think outside the box. But workers feared that management might think they were shirking rather than thinking, so the architects hid the tables at the back of the room. The building may be all 21st century, but it’s taking the staff a little longer to catch up.
WHEN they hit 50, men buy sports cars, women buy face creams. Janice Teal, 53, Avon’s chief scientific officer, did both. “At 50, the skin changes when women hit the menopause. There is a lot more going on to motivate women to want to look younger. Instead of going out and getting the red sports car, they want to get something for their face,” she said. “I went and got a Porsche as well, but it’s cheaper to go out and get a bottle of cream.”
For someone who spent her youth as a lifeguard in the sun, her skin shows little sign of damage. She looks much younger than 53 but swears that she has never gone under the knife. “It’s all Avon,” she said. “We can reverse the signs of ageing. Twenty years from now it’s possible we’ll all be living to be 100 and looking 50.”
The science of skincare is evolving rapidly. In the early 1980s “products were more about moisturisation or ‘hope in a bottle’”, said Harold Pahlck, vice-president of product development. “Teal sought out other ingredients, like stabilised vitamins A and C and retinol, and ingredients that led to the Anew line (one of Avon’s best sellers).”
Avon created a mass market for a new range of skin creams, said Candace Corlett, principal at the consultant WSL Strategic Retail. But that was 10 years ago. Now, said Corlett, consumers are confused. Too many new products are making too many promises, and fierce competition has taken its toll on Avon and the market.
Skincare, cosmetics and fragrance have all suffered a slowdown in sales, reports WSL’s How America Shops survey. Yet interest in makeovers has never been higher. The interest in Botox, chemical peels and reality-TV programmes on plastic surgery shows that people seem ever more concerned about how they look.
“What’s driving all this is the baby boomers,” said Teal. “The oldest of the post-war generation are just turning 60; the big bubble is hitting 50. And none of us wants to look old.”
Botox, in which a toxin is injected in the skin to smooth out wrinkles, has become part of a movement known as “radical beauty”. But for all the public interest, it is not a trend that most women want to take part in, or can afford.
Teal said: “We did some surveys and some women said they would never have plastic surgery — that was probably the majority. A lot of women can’t afford it or are afraid of it. And they kind of like who they are — every wrinkle tells a story. Not everyone wants to transform themselves but everyone wants to look their best. If you want Botox, the number of dermatologists that can treat you is small. You have to go to a fairly large city to find someone who does this stuff.”
Pahlck added: “There is also the risk you will end up like those movie stars who can’t do the full range of expressions.”
However, the interest in younger looks is real and Avon responded two years ago with a range called Anew Clinical. It featured alternatives to chemical peels and facelifts. Avon’s Deep Crease Concentrate promises to leave you looking “stunning, not stunned”.
“The promotions were very white, very doctory,” said Teal. “In some pictures we even had a scalpel on the table. They sold well but there is a population that may have found it a little scary.” So the idea has now been repackaged and called “herbecuticals”. It’s a more natural, softer range, and not so “cutting edge”. But the science remains the same.
Teal said that skincare had recently made a big leap. She is particularly excited about “anti-glycation” technology that she believes reverses some of the signs of ageing. Glycation is one of the processes of ageing. Sugar binds to proteins and forms a rigid blob that stops proteins in the body working efficiently. It has been linked to Alzheimer’s and to diabetes, as well as to wrinkles. Breaking those bonds in the skin can reverse some of the signs of ageing.
Avon and its rivals have come up with ingredients that can break down the glycation bonds. “We were the leader in bringing these anti-ageing products to a mass population, and for people to use every day,” said Teal. With an ageing population fixated by youth and a hot new product to sell, Teal believes that Avon is well placed to sell the world the next generation of skincare creams. Now its up to Avon’s army to spread the message.
THREE years ago Rebekah Testar’s husband, Tony, fell ill with hypertension. He had a blood pressure of 200 over 163 and was told to give up work, even though the couple had three children to support. Then Rebekah, 35, was stopped by an Avon rep and asked if she was interested in selling cosmetics. She started selling in Burbage, Leicestershire, and now looks after 750 reps who sold £1.5m of cosmetics last year. “My Avon income has replaced Tony’s salary,” said Testar. “I love it. When I started I didn’t know anyone in the village, now I know so many people.”
Her success shows the promise Avon has offered women for 120 years, a promise of independence. When Jung took over as chief executive in September 2001, Avon took off. Developing markets such as Russia offered huge scope for growth as a new army of women embraced the Avon promise.
But sales slowed as markets matured and more cosmetic companies targeted increasingly sophisticated consumers. Analysts complain that Avon has become increasingly sketchy about its future plans.
William Leach of Neuberger Berman said growth in the developing markets seemed to have peaked while in developed markets, especially America, “Avon has a low-income image that is hard to shake”.
That image is something Avon is determined to erase. Jung intends to increase advertising. Procter & Gamble spends 12 times as much on advertising Olay as Avon spends on Anew, despite Olay having only twice the sales of Anew.
Then there is China. Until last month China banned door-to-door sales, forcing Avon to work from boutiques. Now that barrier has come down, “China could be huge,” said Leach.
When Testar wanted to know how Avon worked, the company put her in touch with top reps in America. One day she may get a similar call from Beijing.
The global reach of a $7bn company
- Established in 1886, Avon is now the world’s leading direct-selling company, operating in 143 countries.
- There are 4.9m Avon representatives across the world, 160,000 in the UK.
- Avon sells direct over the internet (www.avon.com) but the vast majority of its sales still come from its ‘ladies’.
- Global annual revenues last year were $7.7 billion.
- In 2004 Avon sold 2.3 billion products to more than one billion customers.
- The firm produces 600m brochures in 12 languages.
- More beauty products carry the Avon name than any other name in the world.
- Avon sells more fragrance than any other company and is the leading provider of nail varnish globally.
- Some 80% of Avon’s products are distributed globally. The remaining 20% are regional specialities.
- In Asia, Avon sells more whitening creams. In Africa popular products are mixed to prevent ‘ashiness’ caused by dry skin on dark complexions.
- One in three women in the UK is an Avon customer, 60% of them are under 45.
- Britain is Avon’s largest market after America, Mexico and Brazil.
- In 1989 Avon became the first major beauty company to stop testing on animals.
- Canadian-born chief executive Andrea Jung has led the company since 2001. The daughter of Chinese immigrants, Jung has transformed Avon. Sales have stalled in the past two years, but Jung hopes that new technology, more advertising and the opening of the Chinese market will put the Avon lady back on track.
