In 1978, Kip Tindell, Garrett Boone, and John Mullen started the Container Store. Tindell has recently announced he is stepping down and will be replaced by current President Melissa Reiff, who will become the CEO. The company currently has 80 stores and is in the process of opening more. Revenues for 2016 came in at $795 million, which is a little over 1.5% from the prior year.
The employees use a concept they call The Huddle, which is a quick 10-minute meeting a few times per week to discuss issues and strategy.
How the Company Started
Boone and Tindell worked together in the paint department at Montgomery Ward. Boone and his father, along with John Mullen provided the initial startup capital, which is believed to be $35,000.
The company has been victim to the same problems as other retailers. It’s difficult to compete with Walmart and Amazon.
Even though the company boasts establishing relationships with customers, which they state Walmart does not, it’s difficult to argue with the appeal of Walmart for customers. Walmart and Amazon are currently in a price war and this is difficult for any competition to deal with.
The company went public in 2013 and immediately surged as it was considered a Wall Street Darling stock. However, the economics of retail caught up to it and its share price has declined ever since its peak price in 2014.
Why it Works
Management in the Container Store believes in putting employees first. They feel that this initiative leads to happier employees, which in turn, leads to happier customers. This translates eventually into happier shareholders.
The company allows its employees to branch out into many of the different areas of the operation, which helps to keep jobs fresh.
Customers and potential customers can find tips and ideas on the company’s blog. Many of these tips relate to getting organized and of course, how to use the company’s products to help them do this. You can see case studies of customer experiences on Facebook.
People love to be profiled in such instances. The chances are high those who are profiled will share on their own Social Media channels. It brings their “15-Minutes of Fame” a bit closer to reality.
The stores offer specialty products. This separates them from the competition. Customers can find some items in other retailers. However, it’s unlikely they will find everything they are looking for with the competition.
The company offers coupons, both for use in the store as well as online. These coupons can be found in local flyer packs as well as online coupon websites.
The Container Store has a rewards program known as POP, which stands for Perfectly Organized Perks. Customers start out with $15 in perks when they sign up. There are events and sweepstakes throughout the year, as well as tips and new product announcements. Customers receive a gift on their birthdays and there are surprise perks.
The company has guest bloggers who describe their experiences and tips. This can be a great way to help engage current customers and possible future ones.
The container store offers free shipping on purchases over $75. This may appear to be a big threshold but it’s not difficult for most customers to spend this much during any shopping session. In fact, according to the company, the average customer spends $100 per visit.
It offers an affiliate program, which gives commissions on sales generated from others to its online store. This is often a big boost in sales for many retailers and is low-cost for the company. The affiliates are responsible for generating traffic to the company’s website.
The Container Store is active on Social Media. When done correctly, this is a great way to engage customers and can lead to significant sales boosts.
According to Glassdoor.com, the CEO receives decent rankings among its employees but many of the other factors are mixed. Some employees complain that the company is no longer putting the employees first, ever since the company went public.
Other employees complain that they have to work more hours than 40 per week, and often have to work even more at home.
Glassdoor reports an overall rating of 3.2, which is low considering how the company touts that it tries to focus on its employees. This is a clear disconnect between the two.
The company will likely focus a part of their core strategy on Baby Boomers. As this group retires and their children move on, they will want to downsize. This requires putting up items for sale or storing them. The Container Store is well-suited to this initiative.
A San Francisco search on Yelp.com turns up mostly positive ratings for this particular store. Most customers who left ratings stated they loved the selection the store has.
Four- and Five-star ratings are the norm. There is a low rating from one user who was not happy with all the in-store banners and advertising that it had. This can be chalked up to personal preference, as others didn’t seem to be bothered by this.
Another reviewer stated that you would likely find better pricing in Ikea. Of course, Ikea won’t have the same offerings as The Container Store.
A New York search on Yelp.com, turns up about the same results as San Francisco. One five-star rating came from a user who stated she was obsessed with the place (Container Store). People who live in small apartments in New York tend to obsess about products having to do with organization.
Another reviewer felt that since many of the products the company sells come from China, it should not cost as much as it does.
On Facebook, the company has a strong 4.4-star rating. Some of the lower ratings had to do with location-specific customer service.
Lessons Learned By The Business
- The company has been on Fortune’s Best Places to Work List for several years. In an interview with Kip Tindell, he states that the company doesn’t boast that for the public relations purposes but it’s the company’s actions that consistently put them on the list.
- The company learned early on that training employees is a crucial element to its success. Knowledgeable employees can help customers promptly. ThisThe Container Store has fewer stores than many people believe. This is part of their strategy to put customers before growth. They only grow when they feel they are ready.
- The company boasts support for what they call Conscious Capitalism, which is a commitment to help the local communities that exist within. The company also has an Employee First Fund which helps employees out during emergencies, etc. They sponsor charitable events frequently and announce when they are scheduled on their website. The company also gives discounts to teachers.
How Other Businesses Can Learn From This
Give your team members (employees) freedom to make decisions. This can propel them into feeling as though they have contributed in a significant way.
They are on the front lines with customers and can help these customers directly when they are given the power to do so. Employees also feel more connected to the business when they have this freedom. This will show when working with customers.