Monday, November 20, 2017
Business

Container Store: How a 'yummy' culture drives expansion

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The Container Store comes to Tampa next month, bringing the world's largest selection of hangers, shoe boxes and trash cans.

If such a large assortment doesn't impress you, the store's bottom line will. With just 58 locations, the company expects to hit $900 million in sales this fiscal year and $1 billion soon after.

The privately held company opens Tampa Bay's first store March 16 in prime property across from upscale International Plaza. It's part of what chairman and CEO Kip Tindell calls the "Florida Trifecta." Orlando's first location opens April 27, followed by another in Boca Raton June 15.

Tampa's 25,000-square-foot store will carry 10,000 items, each designed to help customers get organized. More than 1,200 people applied for the 55 full- and part-time jobs.

In an interview from the company's headquarters outside Dallas, Tindell spoke about the store's "yummy" culture and how organizing a closet can change someone's life.

When your first store opened in 1978, some people doubted the concept of selling empty boxes would work. Why has it been so successful?

I think people who understand the store best realize that we're just not selling space or saving space. We're really selling time. If you are reasonably well-organized, then you can accomplish more in life. Being a bit more organized gives you a certain peace of mind and it saves you a lot of time. I think an organized approach to everything, from the way your pantry or closet is organized to the way you pack your luggage, just feels better.

Talk about the Container Store's extensive employee training.

The average retailer invests eight to nine hours of formal training for each first-year employee they hire. At the Container Store we do 263 hours. People join this company and never leave, so we can invest in them. The famous economist Milton Friedman said the only reason a corporation exists is to maximize the return of the shareholder. I'm like, well, no. We put the employee first and if you take care of the employee better than anyone else, she'll take care of the customer. If those two people are really ecstatic, then the shareholder will be happy, too.

The pay at the Container Store has been touted as being higher than most retailers. What is the hourly pay for the typical employee?

It varies, but companywide, a full-time salesperson makes right at $50,000 a year, which is not an enormous amount of money, but it's an enormous amount of money for a retail salesperson. We try to pay 50 to 100 percent over the industry average, particularly for those employees closest to the customers. That's part of being employee-first.

A 10 percent annual turnover rate is pretty remarkable in the industry. How are you able to achieve that?

It's part of the culture, the employee-first orientation. We work really hard trying to make sure everyone associated with the company thrives. If you talk to people who know the Container Store, they don't like the Container Store. They love the Container Store. It's a special, fun, quirky, yummy culture that's really fun to be a part of. It's an enjoyable place to work and shop.

You mention the word "yummy" a lot. How does a non-food store use that term?

The culture is just yummy. It's the opposite of yucky. It's a place where everyone wants to be and have fun. We think it's okay to have fun at work. Retail is hard but it doesn't have to be serious every moment.

In reading customer comments on your website, they say shopping at the Container Store is a life-changing experience. How can buying a box be life-changing?

We're trying to get what we call the customer dance. When we sell you a closet, we want you to be so excited when you see it that you do a little dance. It's relatively easy to get a dance for a closet or pantry. But we try to get that for something as pedestrian as a trash can. Even a trash can can make you smile. If you can get your customers to feel emotional about the goods and services you provide, you're going to dominate your niche. We're proud to say we created this niche but we also dominate it 35 years later.

I noticed that you were on the board for Whole Foods. How did that come about?

John Mackey, the co-founder and CEO, he's my old college roommate at the University of Texas. He was the most interesting kid when I was at school there, and he's probably still the most interesting man in Austin. He and I rarely agree on politics but we always agree on business philosophies. I admire him.

Your plans to open six stores a year for the next several years seems pretty aggressive given your history of gradual growth.

The new stores are doing amazingly well. Interestingly, we have only recently begun to open in smaller markets. We used to think our stores only performed well in Chicago, L.A., New York, Houston, Atlanta, only the biggest markets. What we've discovered is our stores do just as well in Indianapolis, Charlotte, Tampa and those sized markets. That opens up another 100 locations for us. It's been a real cool discovery. We like to say we're immature as a retailer. With only 59 stores, there's a lot of places we haven't gone yet.

Susan Thurston can be reached at [email protected] or (813) 225-3110.

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