If you told someone in the 1980s that South Korean brands would one day supersede many Western and Japanese competitors for innovation, brand management and profitability, they would have declared you insane. But that is exactly what has happened.
Digital is a key enabler for businesses and could be sitting at the executive table in the next few years, Avon Products’ head of digital claims.
Speaking at the Forrester Summit for Marketing and Strategy Professionals in Sydney, Carl Mogridge took the audience through the beauty retailer’s three-year digital transformation to date, and the launch of its first direct ecommerce offering earlier this year.
Describing the journey as the shift from “ding dong” to “dot com”, Mogridge said digital represented a game-changing opportunity for the company. But he noted the significant difference between Avon’s long-standing representative sales force model, and the “real-time, instant gratification” consumers it is trying to target today.
The company has 6 million representatives worldwide. Each representative is given a personal website URL.
“We always talk about where digital sits in an organisation,” Mogridge commented. “Two years ago, it probably sat under marketing and communications but in two years’ time, it is probably going to sit with its own position at the executive table.
“Digital is an enabler.”
With no employees officially dedicated to digital when the plans commenced, or assigned budget, Avon’s first-year objective was to explore the digital opportunity based on what customers wanted, Mogridge said.
The focus in year two became building and refining the digital strategy to stabilise the digital agenda, he said. This year it's about streamlining the business and monetising digital assets.
Several key technologies were implemented along the way, Mogridge continued. One of these was augmented reality technology in the company’s magazines providing links to digital content. Another was Avon Live TV, offering real-time content users can share through social networks.
Avon also teamed up with PayPal on an NFC project to arm Avon sales reps with the ability to transact with customers using mobile devices. In addition, sales reps were provided with and trained on free digital assets around Avon products.
Arguably, however, the biggest transformation in Avon’s 127-year history has been creating a direct ecommerce platform.
“We started with a print brochure and then went to a mobile app, but customer didn’t like interacting with that particular app on that platform, so we built a responsively designed ecommerce site so they had more opportunity to ingest all the digital content,” Mogridge explained. “As the saying goes, good companies listen, but great companies act.
“Before you could only purchase through an Avon representative – now you can connect with the company directly or physically, have products posted or delivered directly by your Avon representative. There’s Google Maps integration and all the functionality digital consumers are accustomed to, it looks very social and it’s a nice UX experience, even on mobile.”
For Mogridge, the keys to digital commerce are having a responsive design that is mobile friendly, clear and concise; offers an easy path to purchase; is accessible and relevant; features intuitive product content; and limits any barriers to entry.
He also stressed the importance of measuring and optimising digital initiatives. “How can you take those learnings and monetise them, team up with people like those in the finance department, marketing and sales and work together as an organisation to push your brand and products further?” he asked.
One big lesson learnt by Avon so far has been to put customer experiences, rather than the technology and digital platforms, first.
“We were pushing technology on customers, such as a new app, and expecting them to react and buy from us,” Mogridge said. “What we realised was that we has to ask ‘what do you want in order to come and purchase from Avon?’”. Now, customer experience is the starting point and technology is built around those demands.”
Top on Mogridge’s list of musts for digital transformation is investing in skills to help drive the digital customer experience. Avon’s digital team has grown tenfold since 2012. Investing in customer profiling and CRM with the help of IT has also been fundamental.
Gaining dedicated and relevant digital skills is another must. "Make sure you do some smart hiring to make this happen," he said.
Activation longevity, as well as becoming a leader in the digital space and continuing to “think big”, are other aspects to ongoing digital success, he said.
“Every company has lifted their game significantly compared to five or 10 years ago,” Mogridge noted. “You can’t think that you’re a good company, you have to be remarkable.”
Today, Mogridge views Avon as a “new startup”. “We have created this business over the last couple of years that required new strategies, platforms, new thinking, new talent... challenging the status quo and creating an Avon that’s cool, it’s about being remarkable and being an authentic brand.
“You have to create a business that’s easy to join, fun to buy from and it’s hard to leave, you’ll be right.”
Mogridge admitted a challenge in launching an ecommerce portal was how to balance that against the concerns of its direct sales force.
“It’s important we understand the DNA of our business. What has kept us alive for 127 years is the representatives,” Mogridge said. “If we ever tried to compete with them, they would leave in droves. But we also understand there are customer that just want to buy direct and we have to fulfil their needs.”
The ecommerce portal tries to fill both requirements. Mogridge said 97 per cent of customers coming through its website want to be attached to a human representative, even if those products are delivered directly. For those that don’t, Avon targets all commissions made online to the local representative behind the scenes.
Mogridge said the next big challenge for Avon is around acquiring customer data. Up until the launch of ecommerce, sales representatives held their own customer database.
“We still don’t know the customer and that’s a big challenge for us,” he said.
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