I think it's a great idea. People immediately know what your selling:) I just changed ours to all gemstones, and were getting alot more views. Great job!
i change mine all the time - even before I do a treasury I think about the type of treasury I'm doing and change my avatar if I have a product that people might be interested to see too:)
I think your shop name should tell people what you are selling. But I know people do use an item they are selling for your avatar. Just use whatever works best for you.