Avon E-Shop on Internet will expand firm's direct marketing reach -- analysts meeting.

AVON TO SELL PRODUCTS OVER INTERNET ON E-SHOP, an "electronic shopping mall" that can be accessed via the World Wide Web, Avon North America President Christina Gold told analysts at an April 3 meeting in New York City. The E-Shop and an Avon On-Line Service will launch "within the next several months" and complement the direct-sales firm's website, http://www.avon.com, which debuted April 1, Gold said.

Avon's upcoming online venues will expand the firm's direct-market sales concept beyond its traditional sales representative audience by allowing web surfers to purchase Avon products through their computers with a credit card.

The Avon shops will offer a selection of the company's "best-selling" products, Gold noted. Avon has contracted a fulfillment company to handle sales transactions. Several of Avon's competitors, including Procter & Gamble, L'Oreal, BeautiControl and Mary Kay Cosmetics have registered sites or are planning web pages. However, these firms do not sell directly over the Internet.

Gold characterized the Internet as a "vast but as yet undefined global opportunity" for Avon. The company's current entry into online marketing is primarily "to gain valuable learning," Gold explained, noting that the existing Web site would not be full-blown until the end of the year. The opening page of Avon's website is tagged: "Avon?! believe it." Browsers can access options such as: "Sell Avon and Reap the Rewards"; "All the Ways to Get Avon"; "Talk to Avon" (an e-mail site); and "About Avon."

The "Get Avon" site lets interested individuals sign up to receive Avon's recently unveiled direct mail catalog, "Avon Beauty and Fashion by Mail." As part of the company's plan to focus on "access development," Avon began test mailings of the catalog in 1995.

Response rates for the direct mail catalog campaigns have been "highly encouraging," Gold said, noting that order averages were "significantly higher than for our core business." To conduct the test market, Avon rented "a range of lists specifically targeting mail order shoppers." Avon sent out 950,000 Fall and Holiday issues of the catalog to "prospective buyers" in the West and Northeast.

Gold said that in response to the test market, Avon received less than 100 calls from its representatives, indicating that the firm is "successfully targeting new customers who are not currently shopping with representatives." The firm plans to expand the direct mail catalog test nationally in 1996 "to determine the scope of the opportunity for 1997 and 1998," she added.

Development of ways to access customers is one of several Avon priorities for 1996 designed to expand the firm's U.S. customer base, Gold said. Avon estimates that there are 100 mil. women in the firm's target audience.

Of Avon's target audience, 58 mil. "feel an affinity with Avon," according to Gold. Of these Avon "acceptors," 59% (34 mil. women) are currently serviced by Avon. "However, at any given time, 24 million customers are stranded, which means they need to be relinked to Avon," she explained. Of the 42 mil. "Avon rejectors" in the firm's target group, 64% (27 mil.) reject the brand in favor of other direct-sale companies while 36% (15 mil. women) are "channel rejectors," Gold said. "Each of these areas presents [Avon] with present and future growth potential," she stated.

Another means of tapping into Avon's growth potential is through promotional programs, which the firm hopes will have a "high impact" on drawing in new customers as well as encouraging current reps to sell more. Gold highlighted in particular the firm's "Gotta Have it" campaign in Avon catalogs.

The "Gotta Have It" promotion "provide[s] unbeatable prices on [Avon's] key high performance brands," she noted. Five "Gotta Have It" promotions ran during the first quarter of 1995 resulting in "4 million units and $5.6 mil. in sales," Gold said. "Every single offer overperformed expectations."

Other planned Avon promotions for 1996 include Sunday supplement couponing designed to reach 56 mil. consumers. The Sunday inserts will tout Avon's upcoming Skin So Soft Suncare Plus line extensions, which will also receive national TV and print campaign backing.

Couponing for Skin So Soft also is slated to appear in Coca-Cola multi-packs, where it will reach an estimated 150 mil. consumers, according to Avon. Avon linked up with Coca Cola through their participation as sponsors in the Atlanta 1996 Olympic Games.

The firm's Olympic participation is also providing Avon with several marketing opportunities. Avon is holding an Olympic-themed customer sweepstakes that will help the company develop a database of over 5 mil. customers "for future targeted marketing," Gold explained. The firm is also launching an Olympic ad campaign, comprising a series of print and TV ads which will feature notable "Olympic Firsts" such as Jackie Joyner Kersee, the first woman to win two Olympic gold medals in the heptathalon, and Aileen Riggin Soule, the oldest living female Olympic champion.

Avon's ad budget for 1996 is $30 mil., double the firm's 1995 ad budget ("The Rose Sheet" Jan. 29, p. 13). Upcoming print and TV campaigns are themed around the slogan: "Just Another Avon Lady." Gold stressed the company's belief that advertising is a "key element" in Avon's 1996 strategy.

Avon also plans to augment its customer base by increasing its support networks for new representatives. To that end, the firm has developed simplified purchase order forms, a smaller, more focused brochure with products "we know new representatives sell" and a new representatives hotline for questions, Gold said.

The firm also is looking at its service set-up with an eye to "contemporizing" the operation for both Avon representatives and customers.

To improve order fulfillment accuracy and flexibility, the firm is expanding its "station lighting" technology to its four U.S. distribution sites. The move is designed "to reduce human error in order picking," Gold explained. In addition, the company is introducing PC Avon, a software system that will allow sales representatives to replenish orders via personal computers.

Another Avon priority for 1996 is to focus on "product value" through innovative new offerings, renovation of existing products and introductions into new segments," Gold told analysts.