Oksana Zharkova, head of Avon in Poland, the Baltic states and Finland, talks about a company famous for its print catalogs is surviving in the digital age, how women make decisions on which cosmetics to buy and how the beauty industry has changed in Poland and around the world over the years
by Remi Adekoya
How have clients of the cosmetics industry changed over the years both in Poland and globally?
Everything has changed, or rather there have been changes in every single element of the business. Let’s start with the channels. Nowadays, clients aren’t satisfied with only one shopping channel, they expect an omni-channel approach to better understand and experience the brand. People prefer to use a combination of offline and online channels. They are more demanding today, products are expected to be multifunctional and provide more than one benefit.
There have also been changes in what influences the purchase. Ten years ago we worked with classic advertisements, now we have social media where recommendations have become a huge deciding factor regarding whether your product becomes popular or not. So we have had to adjust.
Talking about adjusting, how is a company famous for its print catalogs and direct sales business model managing to survive in the digital age?
Avon has been around for 127 years. In all this time, we have functioned as a direct selling company adjusting to different times, fads and economic realities. Of course, direct sales channels must now be leveraged by additional access to the products through for instance, e-commerce, so we are definitely moving in this direction and trying to build our expertise in this field. Last year we launched Avon Online, offering customers some extra advantages. If something is ordered online from us, we deliver the product for free, offer the possibility of paymant on delivery as well us a 100 percent guarantee on the product Avon if it has been opened.
However, interestingly enough, our studies of online search engines show that there are roughly 100,000 searches for Avon catalogs every month in Poland. These are now often interactive, digital catalogs but nevertheless it shows that many cosmetics shoppers are still very comfortable with the concept of catalogs as a whole.
Data also show that 40 percent of woman buys products via catalogs at least once a year. Having leveraged our business model to online it has become even more convenient for customers. We created an online enviroment where our current customers can continue their offline relationships and interactions with Representatives.
Regarding the beauty industry, what differentiates Poland from some of the other markets you have worked such as Russia and Ukraine?
First of all, regarding channels of distribution, direct selling is more present in Eastern Europe while here in Central Europe, retail infrastructure is very modern and well-developed. There are also differences in the category mix. Skin and body care are getting increasingly important in this part of the world, whereas color plays a big role in Eastern Europe.
In terms of style, Eastern European customers are more open to experiments, they use much bolder colors while here in Poland, women tend to use much milder, softer colors.
So people pay more attention to image there you mean?
I mean there is a different approach to image there. People everywhere try to create and project certain images of themselves to others, but the question is what exactly you want to underline with the help of cosmetics.
In this part of Europe, women use cosmetics just to underline their natural beauty while in Eastern Europe, the way you look is a much bigger part of your overall image and what you want to say to your environment.
So what are the three key factors involved in a woman’s decision-making process regarding whether to use a particular beauty product or not?
The first is how much this product responds to my needs. Secondly, the brand offering a product should be trustworthy and the consumer wants to feel proud to use its products. It also helps if the consumer has tried the product before and had a positive experience. In this case the recommendation factor I spoke about earlier comes in very strongly.
And what are some of the trends driving the industry now?
Actually what I mentioned earlier regarding channel changes, product purchase drivers and multi benefits are the key factors that help customers to make “smart” shopping decisions. When provided with this, customers are welling to invest sometime in order to choose the best offers.
My female colleagues at work told me about the “lipstick effect” a theory suggesting that no matter how bad things get in the economy, women will always buy lipstick. Is there any truth to this? Are cosmetics companies less vulnerable to economic crises?
(Laughs) Obviously, it is difficult to fully avoid an economic crisis. Customers change their priorities and behavior. Therefore the cosmetics industry has experienced some slowdown in the recent years of economic turmoil. However, this was more a situation of reduced growth and not a plunge in sales. During this period, companies acted pretty much the same with everyone playing the value competition.
So the 2 for the price of 1 pitch?
Exactly. But now things are getting better. Consumer confidence is still not positive enough but it’s growing. However although full 2013 data will be coming through in April, according to preliminary data, Avon Poland outgrew the market last year.
And you don’t plan to do away with your print catalogs?
No, we don’t.
Because that’s your trademark…
Exactly, and like I said, people still look for catalogs.
Outside Poland, which are the best-performing markets for your company?
Latin America and the EMEA countries, so Europe, the Middle East and Africa.
Avon calls itself “The company for women,” but studies have shown a significant increase in the number of men who use skin care and even beauty products. I did notice some products for men in your catalog, are men becoming more important to the beauty industry?
Yes, that is very true. Although women will be always at the center of our attention, if you are thinking about a woman, you have to think about her life and everything represented in her life. We need to care about what she cares about. And so yes, we have male products such as fragrances or skin and personal care products. However I can tell you in secret that in the near future for the first time ever we will be introducing a male Avon Ambassador.
And how do you adjust your products to suit the different skin tones, skin color and prejudices of female clients on different continents?
We have our own R&D department so this helps us adjust our products to the skin tone or preferences of the customers. For example, it is a well-known fact that in Asia, skincare should be whitening so we take all those kinds of factors into consideration.
So will you change the company slogan to “The company for women… and men?”
We’ll stick with “The company for women” for now (laughs). However, we will be strengthening it with the slogan “You make it beautiful.” You can have the best product but at the end of the day, without a womens touch it’s only a product. We give her the inspiration, she makes it beatifull. So yes, women will remain our passion.