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“People, culture and communication” are the keys to Container Store’s success, according to president Melissa Reiff.
This story first appeared in the September 27, 2007 issue of WWD. Subscribe Today.
The $600 million company, which began in 1978 in Dallas, today has more than 40 stores averaging 25,000 square feet each, and its sales are growing 15 to 20 percent a year. For the last eight years, Container Store has made Fortune magazine’s list of the top 100 companies to work for in the U.S.
“Our core competency is customer service,” Reiff said. “Our people-oriented approach transcends to the customer experience.”
Employees wear “I love my job” pins “because we want to hire our customers,” said Reiff, and they also carry cards that read “Hiring neat people!” to hand out to candidates they meet. The company receives 30,000 applications annually and only hires 6 percent of applicants, and those people get paid 50 to 100 percent higher than the retail industry average, plus receive 241 hours of training in their first year, Reiff said. Employee turnover at Container Store is less than 10 percent.
Container Store’s customer base is affluent, well-educated, busy women. The store captures more than 80 percent of their home phone numbers, through which it gets customers’ home addresses for direct mailing. Container Store spends 5.5 to 6 percent of its revenues on marketing, 57 percent of which goes to direct mailing to drive store traffic. According to Reiff, the mailings deliver a 9 to 12 percent — as opposed to the industry average of 4 to 6 percent — success rate of driving customers to the store. Getting them to the store, not just the Web site, is key for Container Store because of its selling philosophy.
Container Store adheres to the “Man in the Desert” concept: If you see a man in the desert, don’t just give him a glass of water and pat yourself on the back — give him water, a visor, a fan and a lawn chair, Reiff said. Translated into organizational retail terms: If someone comes in needing help organizing their shoes, chances are her whole closet is a mess, so don’t just sell her shoe boxes — sell her shoe boxes, hangers, hat boxes and so forth.
The retailer aims to turn its employees’ enthusiasm into customer loyalty. The aim, Reiff explained, is to make customers so happy that “when she opens her organized closet she does a little dance. And with that, she becomes a brand ambassador.”