In light of economic crunch, Avon to promote value, ramp up recruitment

NEW YORK Mass market retailers could be facing increased competition when it comes to beauty as Avon, which sells it products through representatives, steps up its recruitment efforts and aims to appeal to cash-strapped consumers through its Smart Value initiative in light of the current economic crisis.

"With people looking for ways to earn money and watching every dollar they spend, Avon offers both an income opportunity and Smart Value products. So we're going to do what we always do: focus on opening doors and capturing share so that we're well-positioned when the crisis lifts as it eventually will," Andrea Jung, chairman and CEO, told analysts during the company's fourth quarter conference call on Tuesday. 

With unemployment on the rise in the United States, Avon will be shifting much of its focus in 2009 on recruiting efforts, leveraging not only various advertising vehicles but also job fairs and Internet sites for job seekers. The company's stepped-up recruiting programs are already evident on television. In fact, Avon had recruiting ads airing this past Sunday leading into the Super Bowl. 

During the fourth quarter, active representatives in North America increased 1% and the North America team is "moving aggressively with a full plate of initiatives," Jung noted. 

The company is also looking to appeal to shoppers' wallets by highlighting value and, according to Jung, will be "moving quickly to insure the appropriate flow of offerings in the under $5 U.S. or equivalent range." 

Avon will also be promoting its Smart Value messaging in its brochures worldwide, and will be creating Special Value sections and separate flyers and mini-brochures. For example, a 30-page mini-brochure in the United States will feature the cover headline, "Look Beautiful for Less." 

"In addition, we're combining this focus with clear messages about the ease of the Avon shopping experience compared with retail, emphasizing personal home delivery by your Avon representative with no delivery fees," said Jung. "So as we begin 2009, we feel good about our advantaged business model."

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