Watch CBSN Live

Tupperware To Party On The Web

For many, Tupperware parties are a throwback to an earlier generation when TV's Donna Reed was the standard-bearer of domestic rectitude.

But the changing customer base of working mothers with limited time, as well as economic turmoil in international markets and a lack of confidence by investors, has resulted in declining sales and a plummeting stock price over the past two years.

So the company that popularized at-home sales demonstrations in the 1940s has gone beyond its decades-old tradition of selling its wares only at Tupperware parties.

Tupperware products are moving into shopping mall kiosks, onto the Internet and into television infomercials in order to make them more accessible to people who want them, but can't find them.

Tupperware began allowing sales representatives to sell its products at kiosks in a handful of Orlando, Fla., shopping malls last Christmas and plans to expand to other markets this year.
"The company is saying 'Look, it's 1999. We have to figure out how to reach more people. We have to get it in their hands,'" said Lisa Humphreys, a Tupperware sales manager.

Tupperware says that customers will be able to buy Tupperware products over the Internet by the end of this year.

Conceding that Tupperware has historically been slow to change, chairman and chief executive Rick Goings said the new measures will supplement, not replace, the direct sales made at Tupperware parties by a million-person sales force in more than 100 countries.

Tupperware officials don't want to do anything "that could be perceived or used against them as denigrating or slapping their existing distributorship in the face," Budd Bugatch, an analyst who follows Tupperware for Raymond James in St. Petersburg said.

Goings has been careful to tread lightly around this issue. "This enhances attendance at our parties. It helps our core-direct-selling business," Goings said. "We've been fighting stranded customers. There is a pent-up demand for the product."

Tupperware believes that the online shoppers will most likely be new customers that previously had no access to a distributor.

The company, which had $1.08 billion in sales last year, has seen revenue slip by more than 10 percent during each of the past two years. This in part is due to the currency devaluation and weakened purchasing power of non-U.S. customers.

With 85 percent of its sales coming from outside the U.S., Tupperware has been buffeted by the economic crisis in Asia and Latin America.

Overall sales slipped by almost 12 percent to $1.08 billion in 1998. Only the United States, its smallest market, posted a gain (6 percent) from the previous year. Sales in Asia and Latin America decreased by 24 percent and sales in Europe decreased by slightly more than 5 percent.

While the company is still profitable, its income in 1998 dwindled to $69.1 million, a 39 percent decrease from the previous year.

Investors havalso lost confidence in the company since it went public in 1996 as a spin-off of Premark International Inc. Tupperware stock has fallen from a high of $55.50 in December 1996 to a low of around $11 in September. It is currently selling for around $18, far short of its 52-week high of $29. Goings attributed the volatility to the hype surrounding the initial public offering.

In addition to expanding its kiosk business and launching online sales, Tupperware has also modernized its products. The new containers feature bright colors and have some new designs, including characters from Disney movies under a two-year-old partnership with the entertainment company.

Although Tupperware is moving into shopping mall kiosks, don't expect any full-fledged Tupperware stores anytime soon. Over the decades, Bugatch said, the company has learned that its products don't do well at retailers because they're pricier than the competition and management believes the products need to be demonstrated.

But the demonstrations fulfill a greater need than just sales, Goings said. Most women of an earlier generation learned their homemaking skills from watching mothers or grandmothers. In today's mobile society where parents and grandparents live across country from their children and grandchildren, women are looking to people like Martha Stewart for those skills.

"The role of a local Tupperware woman is being a local Martha Stewart," Goings said. The company plans to hold on to that tradition.

View CBS News In
CBS News App Open
Chrome Safari Continue