Avon UK plans to sell insurance services

Related tags L'oréal

On the back of increasing sales in the UK market, cosmetics giant
Avon says it is planning to diversify its cosmetics product range
into insurance services sold door-to-door.

The company says that move will increase its current workforce in the country by 20,000 people, to bring the total number of agents to 180,000, but that the focus of its business will still remain its cosmetics and beauty lines.

Jerry McDonald, president of Avon UK, told the Financial Times that the business sector was a 'sleeping giant'. He is hoping that Avon's focus on women will help provide an added impetus to its plans to provide insurance services as women usually are a lower risk to insure, thus attracting more competitive rates.

McDonald is planning to introduce a string of related financial services at the beginning of next year, which will include motor insurance, life insurance and credit cards.

Direct sales have been enjoying somewhat of a renaissance in many of the leading global markets in recent years. In the UK leading cosmetic providers Virgin Vie and The Body Shop have both also reported a sharp growth in direct sales, with home and party plan divisions proving to be increasingly popular with women throwing parties and social events.

However industry experts view Avon's move as a brave one, particularly in light of the fact that sales of door-to-door financial and insurance services have seen a steep decline in the past 15 years in the UK market.

In 1990 some 200,000 were employed selling insurance door-to-door. That figure is currently believed to be just a few thousand now, as insurance services have become increasingly more sophisticated and consumers have become more knowledgeable about products.

Avon's​ move in the UK is also in sharp contrast to what is happening in its biggest market, the US. Over there declining sales have led the company to tighten its belt by re-focusing its product portfolio back into its cosmetic and beauty product lines, dropping soft toys and jewellery as a result.

Despite Avon's ambitions in the UK financial services market, McDonald emphasised that he was aware of the dangers of over-stretching the brand, suggesting that the move will not amount to anything more than a niche service.

Related topics Business & Financial

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