Avon"s Acquisition of Silpada: Is Avon Calling Or Now Shouting Out?
An acquisition of this sort hadn't occurred with 2 industry giants since the 1990s.
A main reason for the acquisition was Avon's st plan to expand the company's line beyond beauty products.
The idea was the dream child of Andrea Jung, Avon Chief Executive.
It was her third purchase for the company this year.
In March, Avon also acquired Liz Earle, an online seller of natural skincare products.
In April, the company followed suit with the purchase of Tiny Tillia, of baby care renown.
Is Avon turning into the Google of the personal care industry? Their acquisitions are lower profile but the same synergy is in play.
All purchases advance and strengthen the existing product base to satisfy unfulfilled key niches.
While Avon already had a line of fashion jewelry, it was not of the quality and price point of Silpada's.
Taken from this perspective, this power play makes eminent sense.
What remains to be seen is how the acquisition will play out.
Will Avon simply become the 'holding' company for its new subsidiaries? Or, will the lines ultimately be merged such that an Avon rep showcases Silpada products along with Liz Earle and Tillia also? At announcement time, the indication was only that distribution and warehousing would be connected for cost savings.
Trying to combine the various companies presents challenges on many fronts.
- Their sales approaches are not the same.
For example, Avon has traditionally favored the 'doorbell ringing' approach of face to face contact.
Silpada loves to party. - Compensation packages are not the same.
Neither entity will want to lose valuable, experienced reps by any combination that could engender a pay cut.
Given the foresight exhibited by management, it will also be interesting to see if the new conglomerate embraces internet marketing with greater fervor.
Avon has utilized some online training and website applications in the past, more so than Silpada.
It would seem that starting online would be a very effective way to coordinate marketing all of the products and providing the enhanced range of possibilities to consumers quickly and effectively.
Women shoppers are one of the biggest sectors online.
Today's women appreciate the time saving aspects of the internet approach to shopping especially when they are already familiar with the products.
Avon and Silpada could capitalize on this status and build their online presence through templated websites and more social media marketing.
Avon and Silpada leadership has consistently shown foresight and wisdom through past endeavors in all kinds of economies.
No reason to believe that will change now.
Acquiring internet marketing skills to tackle the market more aggressively will stand the Avon and Silpada consultant in good stead, come what may.
Avon may no longer be merely calling, they may be giving a 'shout out!'