Avon’s historic shift: A snapshot of high street revival?

Avon, the online retail powerhouse and the largest direct seller in the world, has revealed plans to open a brick-and-mortar shop in the UK for the first time in 137 years.

In 2022, Avon’s revenue amounted to approximately $2.7bn (£2.2bn), down from about $9.2bn (£7.5bn) generated a decade ago. Is this drop in profits behind the move and will we see more online retailers following suit?

In 1886, Avon was born when David McConnell built a business offering women the chance to earn money. This was a bold move, coming four years before women were allowed to vote. And it paid off. What began as door-to-door selling with 13 employees quickly grew and by 1929 Avon was selling low-cost home care and beauty products in 48 states in the US. Avon has already proved that they are on a hunt for growth. In September, the company confirmed that it had struck a deal with Superdrug to launch more than 150 products in 100 Superdrug stores.

Adaptation

Avon’s move comes amidst the perceived sentiment of the high street’s death. However, brands with existing high street stores still see retail as a promising channel for sales, according to Nic Dunn, CEO of expert e-commerce web design firm Charle Agency. He says, “Whilst brick-and-mortar isn’t dead, I do believe that brands need to work hard to offer experiences to customers that deliver the brand essence and cut through the noise of competitive markets.” Dunn advises that retail stores “have to be experiential, customer service has to be outstanding”, otherwise there is a real chance that “retail is not a convincing commercial channel.”

The power of physical stores can’t be understated, especially with a younger demographic of consumers. Known as the Retail Doctor, customer service expert and renowned US-based business strategist Bob Phibbs, says, “Avon is trying to engage a younger shopper in places they may not be already. Nowadays, it’s costing a lot more to get customers through social media or Google ads and more online shops and DTC brands are starting to see that it’s easier to find the perfect customer in a real store, rather than on the internet.”

Change

Avon’s brick-and-mortar pivot represents a significant change in its business strategy to increase the variety of ways customers can purchase its goods. In a cost-of-living crisis, less expensive comforts offer consumers some respite, which may equate to an increased demand for local retail.

“Empty shop fronts are a regular sight on many high streets,” says consumer expert Sue Hayward, “and the news that Avon is going to open its first high street stores may be seen as a boost for brick-and-mortar retailing but could also be a sign of the ‘lipstick effect’.

“This is when during times of economic crisis, consumers tend to swap more costly big-ticket purchases for smaller luxuries, like lipstick. Plus, many consumers enjoy the whole experience of buying cosmetics in person, rather than online, or from a catalogue, unless they’re buying the same item and shopping around on price,” she says.

Embracing technology could also be key to the high street’s resurgence. Online retailer Asos confirmed that it would open its first-ever physical pop-up shop this month, allowing customers to experience its “fashion first-hand.” Its USP will be the use of augmented reality, allowing customers to try on products virtually. With the rise of AI, expect to see more high street stores embrace tech to set them apart from the competition.