Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Tupperware, that venerable purveyor of plastics, joins the growing number of manufacturers selling directly to the public online.
Tupperware won its way into the hearts of homemakers in the ‘50s by sealing in freshness and enlivening social lives-since the company’s first fete in 1948, in-home parties have been Tupperware’s primary distribution channel. At these gatherings, independent sales representatives demonstrate products along with the hallmark Tupperware “burp” geared to stamp out food spoilage.
Yet declining revenues in recent years has prompted the company to cast around for new customers. In August, Tupperware launched a new Web site, offering e-commerce for the first time. (Initially the site will be restricted to U.S. shoppers although Tupperware sells in more than 100 countries.)
Does e-commerce mean the party’s over for Tupperware salespeople? “We think not,” says Christine Hanneman, vice president of financial relations at Tupperware’s corporate headquarters in Orlando, Fla. Research shows that 40% of consumers like the party approach-meaning a lot of folks might buy Tupperware, but don’t want to go to a party or don’t know where to crash one. Online sales should be “incremental” rather than cutting into the sales representatives’ revenues, stresses Hanneman.
Indeed, the new Web site is part of a three-prong strategy to boost company sales, which totaled $1.1 billion in 1998. Besides its online initiative in August, Tupperware also made its television debut, pushing product on the Home Shopping Network. The company’s also rolling out kiosks in shopping malls around the country, giving mall goers direct access to its plastic products. More than 50 of these booths were in place this summer with 100 slated to be up by the holidays. Salespeople who have participated in the kiosks have found them to help business, rather than cannibalize their sales base, adds Hanneman.
Still, not everyone believes the new Web site will leave Tupperware representatives unscathed. “It’s obviously going to have some impact on the sales force,” says George Whalin, president of Retail Management Consultants in San Marcos, Calif. Nonetheless, Whalin gives Tupperware kudos for its e-commerce initiative. “It’s the logical thing to do,” he says, pointing to competitors on the freshness front, such as Rubbermaid which is found on grocery shelves around the country. By going online Tupperware will “reach people they’ve never reached before,” says Whalin, who expects urban markets to be fertile territory for online sales.
Tupperware hopes to tap a new base of more affluent shoppers, a departure from its traditional clientele. Higher income folks may give the product high marks, but don’t necessarily want to attend a party to acquire it, says Hanneman.
ýet for those who still like to mingle their plastics business with pleasure, there’s no need to fret. Tupperware.com builds in plenty of awareness for its home party tradition. Besides being able to locate a company consultant, online shoppers can brush up on the finer points of throwing a fete, right down to do-it-yourself invitations. There’s even a quiz to discover your hostess m.o. Lampshades, anyone?