The party is over.
Tupperware in Australia is on the verge of liquidation and closure after 76 years of trading, founded on its unique party-plan distribution network.
It’s a comprehensive case study with many layers of lessons for those in commerce.
Immediately after the conclusion of World War II, was an era where few married women worked. Tupperware provided opportunities for socialising, earning additional family income, and introducing food storage in well designed, functional packaging which was appropriate for parties and relatively small compact refrigerators.
Relationships and impulse purchases were pillars on which a global business evolved and then rapidly expanded.
However, there were numerous fundamental flaws in the business model:
PRODUCT LIFETIME
The solid plastic product composition was durable, often extending to three decades.
Individual products literally became transgenerational family kitchen heirlooms (with little attendant value). Grandparents handed them onto grandchildren.
Therefore, repeat purchases were limited with little or no reflection on customer satisfaction or dissatisfaction. The utility (read: durability) of items were laudable.
FASHION, DESIGN, COLOUR
The kitchen- and pantry-ware range was built for purpose. In the early years of the company and product lifecycles, the items were not conspicuous.
Lifestyles changed, rapidly and continuously. Kitchen- and pantry-ware morphed into fashion statements. Regrettably, Tupperware was largely bland, colourless and lacking design statements. The pastel colours were intentionally understated. No suggestion of Hi-Viz.
THE EVIL OF PLASTIC
In more recent times plastic has been tainted in image and marginalised on market acceptance and preference.
Competitive and substitute products, brands and supply-chains entered the marketplace, often aggressively. The social consciences of consumers induced a willingness to pay premiums for stylish, colourful and non-plastic alternatives. Tupperware was exposed and vulnerable.
SUPPLY CHAINS – THE MISSING LINK
Social and digital media have revolutionised commerce and lifestyles. Expectations have been elevated. Immediacy has become an imperative.
Party-plans whilst quaint, did not fit. Service and delivery gaps appeared.
FUTURE IS SETTLED
The design features of Tupperware were and remain laudable. Lids sealed well, and ingredient freshness was extended.
However, consumption patterns were changing, among NOW consumers. Vacuum packs quickly became obsolete and redundant. Visits to supermarkets and food-stores increased, with many products purchased today, eaten today, and the remains disposed… today.
Put simply, the Tupperware brands, products and services were overwhelmed by complex, comprehensive market forces.
KEY LESSONS
Self-induced obsolescence, innovation and creativity are virtues. Internally driven change contributes to maintaining relevance, competitive advantage and client/consumer interest and loyalty. There was little evidence of such with Tupperware.
Emotions remain fundamental and essential ingredients in decision-making. Accordingly, they should be present and well-articulated in marketing, merchandising, promotion, and sales communication.
However, that is very different to nostalgia. Past preferences, loyalty, purchases, and consumption are – well, past. That is a sentiment which is acceptable in reflective moments, and for short periods of time.
DING DONG
The Tupperware case study is not without precedent.
Avon was, globally, the largest selling brand of cosmetics for longer than three decades. Its initial and sustaining success was, primarily a function of its comprehensive door-to-door sales and distribution networks.
Regular, periodic visits by Avon field-staff maintained contact, communications and relationships. Trust was built between customer and the Avon agents.
Order-taking, payments and deliveries necessitated repeat visits, which provided opportunities for upsells, cross-sells and new release promotions. There was little scope for competitor and substitute intrusions.
Long before the introduction of social media and online sales channels, society changed. Full-time dual head-of-household incomes became the norm.
That contributed to difficulties in recruiting part-time commission-based field-staff and limited times for visits to customers. Residences were vacant for long periods of time each working day.
Time and timing were fundamental determinants of success, and ultimately, to faltering revenues and to failure.
Bricks ‘n’ mortar stores, visual merchandising and personal customer service, delivered at point of purchase by professional, qualified beauty consultants assured their own lustre and alure. Indulgence was assigned premium value.
NOTHING IS ASSURED
Post-war baby boomers will doubtlessly recall the weekly, fortnightly, or monthly visits by insurance salesmen (from entities like MLC, CML, NML, Prudential).
In the early years of the consumer era (from 1963, when baby boomers typically first entered the workforce and had their own disposable incomes), the sales “pitch” centred on the virtues of long-term savings.
Compound interest was not explained, understood, or valued.
Substantial up-front commissions were paid to the insurance agents.
These often were well in excess of the annual contributions of the insurance policy holders. Periodic trailer commissions were a further drain on the investment capital.
Many teenage and younger policyholders, with a lack of life experiences, financial literacy and savings expertise were dismayed when they discovered their account balances were negative in the early years.
Perhaps expectantly, investment account (policies) attrition rates were high, and the negative stereotypical images of insurance industry agents widespread.
Value was difficult to package during the initial period of policies, the advantages of insurance hard to sell to the young, who believed in their own immortality and indestructability.
Life insurance rapidly was subsumed by financial planning and became a minor consideration in the overall value-package.
STAND AND DELIVER
In recent times an increasing number of businesses have fallen over.
Inadequate, expensive, and unviable supply-chains, distribution networks and delivery systems were, and remain foremost among the major contributing factors. Indeed, delivery companies, including Deliveroo, Milk Run and Door Dash have been among the fallen.
High and increasing consumer expectations for rapid delivery among time-poor and intolerant clients and consumers introduced what ultimately became unviable service standards. One, two- and three-hour delivery promises had innate high operating costs – fixed and variable.
Like the April 2000 dot.com crash, growth in volume, customer numbers and businesses served – was the overriding key performance indicator. Profit was not a primary consideration or goal. Sadly, actions and philosophies have consequences.
That is evident in the recent declines in the fortunes of the Buy Now-Pay later sector, and of individual entities.
Newton’s law of physics persists:
“To every action there is an equal
and opposite reaction”.
In other words, rapid incline: rapid decline.
FINAL WORDS
The essential lessons are complex. Growth and dominance can be fleeting. Change is omnipotent. Innovation is essential.
There is no single formula for success.
Monitoring, measuring, and modifying are imperatives.
Rules are not universal or immutable.
“Too big to fail” is a myth. Read the headlines. Then script your own narrative.
Barry Urquhart
Business Strategist
M: 041 983 5555
E: Urquhart@marketingfocus.net.au