The document discusses The Container Store and its unique approach to recruitment and training of employees as a competitive advantage. It notes that while other retailers in the storage and organization category have struggled or closed down, The Container Store has maintained 20% annual growth for decades. This is attributed to its practice of spending 18% of sales on employee training and satisfaction, hiring people with values aligned with leadership, and providing employees with knowledge to help customers. However, some remain skeptical of the sustainability of this business model.

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The Container Store's Customer Service:
Recruitment and Training as Competitive
Advantage
"To be a great place to shop, you need to be a great place to work."'
-Doug Fleener,President, Dynamic Experiences Group'.
"One oftheir [fhe Container Store's] keys to successthat they hire very well, it'ssuch a generous place,such
a high-trust place, that employees love it. They hire people with the same values as the leaders. That's the
cornerstone.''3
- Leonard Berry,Author of Discovering theSoul of Service.
The 'storage and organisation'retail segment is part of thehome furnishing and housewares retailindustry. Storage and
organisation products include food storage containers,utility products like clothes baskets,garbage cans,shoe boxes and
home storage devices like storage drawers, shelving systems and filing cabinets for the purpose of storing things at home.
In addition to retailers like Target, who offer these products, some specialty stores also cater to this segment.
By 2005, two specialty stores, OrganizedLMng and Hold Everything were closing down their operations due to falling
sales and heavy losses.In spite ofthe tough business environment, The Container Store, believed to be the originator of
this niche retail segment,continues to operate profitably. One of the primary reasons that the company cites for its sucoess
is its unique recruitment and training policy.In addition,it spends 18% of sales on the employees,as itbelieves well-infonmed
and satisfied employees are essentialto satisfy the customers.Although The Container Store has so far been sucoessful,
skeptics continue to doubt the sustainability ofits unique business model.
The Storage and Organisation Retail Category
The emergence of the retailindustry is believed to have taken place in the late eighteenth century,and the evolution of
retail fonms in the early nineteenth century.One of the earliest retailers were Sears, Roebuck & Co. that started in 1893 to
sell watclhes.The company later included other merchandise such as jewelry and firearms. Later,stores specializing in a
particular retail segment were established. In the home furnishing industry (Exhibit 1), companies such as JKEA were
established.ln 1978, The Container Store,started by Kip Tindell and Garrett Boone, established a new retail category,
storage and organisationin the housewares section' of the home furnishing industry. 5
Similarly,other specialty stores suclh
as Storables (established in1981) and Organized Uving(established in 1985) also catered to the storage and organisation
category. In 1994, the totalmarket for storage and organisation products was $1.44 billion and this has grown to $8 billion
in 2004.'
Powers, Vic!d 'Flndiog 'Nofkers Who FIT", http:flm ona y.Clln.comlm aga zine slbus lne ss 2/bus1ne ss 2_ archlve J2 004 /11/0 11 81 89 36 Vinde x.htm, November 1" 2004
Dynam ic Experienc es Group Is a Massachus etts -ba se <! retail consutta ncy.
Roth, Daniel 'My Job At The Container Store. Employe es at the best rompany 10 work for ln America sell boxes and garbage cans. Our reporter went moonl)Qht'ng to ftnd
out whafs so great about that", http:/lmoney.ron.comlmaga zirle slfortunelfortune_ archfv e/20 00,1J 1/10 J27 17 41fllldex.htm, Januruy 10" 2000
Housew ares forms a part of the home fumlsh!ng industry, it constituted 13% of the home furnishing Industry in 2003.
s Berry, leonard 'Disctl'lefing the Soul of Service', PaJe 197
Amme nhe use r, Maura K 'The Container Store helps peop1e think inslile the box', http:ffHWN. .orglsrch/sctlsct0504/page57.php?reglon=, Mat 2004

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Exhibit I
Home Furnishings Industry, Comparative Analysis
Rank Company Name Locatio n Sales (in$ millions) %Change No.of
2005 2004 2005 2004 stores
1 1 Bed Bath & Beyond Union, N.J 5,769.10 5,147.70 1210 m
2 3 IKEA Plymoulh M eeting ,Pa 2,944.00 2,544.00 15.7 23
3 2 Unoos 'nThings Clifton,N.J 2,694.70 2,661.50 1.2 542
4 2 Expo Design Centers />Jianla 1,700.00 2,700.00 -37 34
5 4 Pier 11mports Fort Worth, Texas 1,627.20 1,690.60 -3.8 1240
6 5 ""lliams-Sonom a San Francisoo 1,492.40 1,307.40 14.2 206
7 8 PotteryBam San Francisco 1,113.00 946.70 17.6 18
8 7 Crate & Barrel Northbrook. ill 1,073.00 1,007.70 6.5 145
9 6 Greallndo ors (Sears) Hoffman Eslalas,Ill 986.00 1,048.60 -5.9 18
10 12 Cost Plus World Markel Oa and, Ca!IT 970.40 006.60 6.8 267
11 9 Nebraska Furniture Mart Omaha, Neb 746.30 712.00 4.8 2
12 10 LuxuryUnens Burlington,N.J 675.20 612.30 10.3 360
13 11 RC ""lley West Salt Lake City, Utah 639.70 694.00 7.7 13
14 13 Restoration Hardware Corte Madera,Calrr 611.20 528.80 15.6 107
Source: Thau, Barbara "Hitting a home runn (HFN The Week{y Newspaper for the Home Furnishing NetworK] http://www.highbeam.com/
library/doc3.asp?DOCJD 1G1:143075667&num 29&c lnfo Round19%3AProd%3ASR%3AResull&ao &FreePremium BOTH, March 6°
2006
The storage and organisation category constituted 5.3% ofthe housewares section of the home furnishingindustry in
2000; this increased to 10.5% in 2002.7
Sharon Tindell,vioa president at The Container Store,observed, 'A number of
retailers who had not committed the spaoa to the storage category have woken up and jumped on the bandwagon-
particularly massmerchants."' For instanoa,theUS retailer, Target offers storage and organisation products in all its 1330
stores across the US. Apart from the large retailers, specialty stores like The Container Store and Organized Living
specialize in these products. 'Yes,there are many people who carry the products, running the gamut from specialty stores,
to mass merchants, grooary and drug stores, and do-it-yourself outlets. But we {specialty stores) feel we have carved our
own niche.Sc in a way,our competition iseveryone ...and no one",said Sharon lindell.' Specialty stores are considered to
offer not only greater quality and quantity than retailers; they also have wider experienoa and knowledge regarding
customer needs. Personalized and extensive servioas offered by them, in spite of comparatively higher prioas for their
products,is also observed to have contributed to their sucoass.Lyndon Lu Wendel, owner of Plaoawares 10
notes, 'We
spend a lot of time making sure our salespeople are familiar with all the products and what they can do."" Organized Living
Lochner, Lauren Coleman 'Container Store Blings Home-Storage Prodi.ICts to ParamliS, N.J.', ht!p:/fflww.hlgh!>eam.comflibrarydoc3.asp?OOCI0=1G1:120433545&num=
22&ctrilnfO"Round19%3AProdo/o3ASR%3AResult&aO"&FreePremium"B0TH, M<i'f 6" 2002
Hill, Dawn 'Home storage continues growth. (organization and storage products)' httpJ/www.hlghbeam.com/library/doc3.asp?OOClD"1G1:f6459699&num =
21&ctrllnfO"Round19%3AProd%3ASR%3AResult&ao"&FreePremium.=BOTH, February 13"' 1995
Gill, Penny "Horne org's hot retan niche.(spec!aitj sol'es foster demand for hoo;e organ!zaBon , storage Items)', (HFN The Weekly Newspaper for the Home Furnishing
NetNork) http:/Aiwo'l.highbeam.comllibrary/doc3.asp?OOCID=1G1:18941476&num=8&ctrllnfo"Round19%3AProd%3ASR%3AResult&aO"&FreePremium=BOTH,September
1 1996
Placewares ls a retail store that sells products re!ated to tabletop,fJOors and wals along with other storage and organisation products.
fl 'Home org's hot re!a] niche.{speciat'tj stores foster demand for home organization,storage .ems}", op.cft.

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4
has actualroom settings to demonstrate thebenefits of their products.Nevertheless,retailers with larger customer base,retail
sector being the second largest industry in US in terms of the number of establishments, 12
contribute to the increase in
awareness of this category.
The retailindustry is also the second largestindustryin terms of the number of employees and accounts for 11.6% of
the US employment." However,the employee turnover rate is go% in the US retail sector." Major reasons cited for this is
the lack of adequate training, which Is a cost-cutting measure in the intensely competitive industry, and lesser growth
opportunities within the organisation for the employees.15
The average training period in the US retail industry is seven
hours" and the average employee-related expenditure amounts to 3% to 4% of the sales revenue.16Atthe same time,
retailers also complain about lack of talent.However,analysts observed that in this sector employees are not given enough
responsibilities toshowcase their talent. Itis alsolearnt that the levelof employee satisfaction is low.
The retailindustryis also plagued with problems in relation to employee practices.There were suits filed against some
retailers in relation to gender discrimination practices adoptedby them.In 2004, Wai-Mart,the largest retailer in the world,
hadto face a class action suit by1.6 million of its former andcurrent women employeesin the US,who claimed that Wai-Mart
discriminated against women with regard to pay, promotion and training. Similarly, Home Depot, a US-based home
improvement retailer,had to pay $104 million in 1997 to settle a similar charge brought by its 25,000 women employees.
In 2005, sales of the retail industry reached $3.8 trillion",which was 6.6% 19 more in comparison to 2004 sales. The
top 100 specialty retailers on the basis of revenue witnessed a growth of9.2% in 2004.20
In 2005,Organized Uving, a storage and organisation specialty store,inits attemptto expand on a nationalscale failed to
secure adequate financing and was forced to liquidate inventory inits 22 stores and file for bankruptcy.One of its stores at
Scottsdale,US,was purchasedby Storables, a private company with six specialty stores in the country.Williams-Sonoma,
a retailer, also plans to close down all11 of its storage and organisation specialty stores by name 'Hold Everything'by 2006.
Hold Everythinghad the largest market share in the storage andorganisation segment in 1990.21
The retailer contends that
the products being offered in its Hold Everything stores overlapped wtth the products in its other branded stores. Howard
Lester, chairman at Williams-Sonoma said, 'Although there is significant growth potentialin the merchandising categories
offered in the Hold Everything brand, in it is strategically and financially advantageous for us to capitalize on these
opportunities by leveraging the marketing authority, multichannel expertise, and scale of our other brands."" However,
other specialty stores such as The Container Store and Storables continue to operate profitably.
The Container Store:Building Competitive Advantage through Training and Recruiting
The Container Store has enjoyed a 20% annualgrowth rate since 1985. 'You can find people who grow faster than 20
percent for a few years, but we haven't found anyone who grows 20 percent a year for two decades," said Kip Tindell
(Tindell), CEO of the company." The Container Store was established in 1978 by Tindell and Garrett Boone, (Boone) the
Chairman of the company,with a core strategy it still persistently follows:1obetter consumers' lives by giving them more time
and spaoe."24
Boone was an architect, and with an objective to start his own enterprise partnered wtth another architect
John Mullen, and Tindell, a colleague from Montgomery Ward" and Storehouse", where Boone had worked earlier.
12
Vargas, Melody 'RetalIndustry Prome', http://retailindustry.ebcutcomlod/abouttheretamndustrytplre!aiUndustry.htm
Q lb!d.
eBircha.Jonatl'lan 'Proof that training does Improve shelf life', Fmanda! Times, March 8" 2006,page 10
Wilson, Anamaria 'WHERE'S THE RETAIL TALENT?', ht!p:/!www.hlghbeam.comflibrary/doc3.asp?DOCI0=1G1:82364925&num=4&ctrllnfo"ROund19%3AProd%
3ASRo/o3AResult&oo::&freePremlum=BOTH, January 23rd 2002
6
'RetaJllndustry Profile', op.clt
17
"The Containe r Store@ Tops Fortune's 100 Best LJsr, http:J.WV.w.soc!alfunds.com/news/release_save.cgi?sfArtlcleld=531, De«lmber 18"' 2000
> Ibid.
" Timmer,Marcel P. et al 'AI'.amalive outputmeasurement for the U.S. retail trade sector',htlpJIWwwJindartic!es.corn!pfartic!eslml_m1153!is_7_128!al_n15922460fplinJl uly
2005
I> 'Top 100 Specialty Store Retal1ers', http:ffretallindtiStry.abolllcom/od/sales_retaJlerslaf04_topspec_nrf.htm
" Kelly, Mary Ellen 'Closet organizer chains step out specialty outlets explore new markets', {Discount Store News} hltp:J!www.hlghbeam.comf!ibrary/
search.asp?FN=HP&ctrlinfo'<Roundge.' %3AHP%3ASearch&q- n!a1ner ore&search_documents =on&search_! es:orl&search_re ence=on, September1990
"- Tierney, Jim 'Sonoma pa<:ks up Hold Everything', http:lfW"I'ffl.h hbeam.coml braryfdoc3.asp?D0ClD=1G1:141448913&num=3&ctrllnfo=Roundt9%3AProd%3ASR%
3AResult&ao=&FreePremium=BOTH
a nms, Dana 'Contalner Store opens out:et In Portland, Ore., shopping center',http:JMWN.h1ghbeam.comllibfaryfdoc3.asp?OOCID=IG1:134840753&num=19&ctrllnfo=
Round9%3AProd%3ASR%3AResult&ao=&FreePremlum=BOTH, AugtiS!4"' 2005
:< Beny, leonard 'Disr:rllering the SOI.II of Servia!, page 69

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They started a store that carried unconventionalstorage items such as Mason's toolbags under the name 'overnight bags',
eggbaskets were called 'canyalls'and wire leaf burners as 'toy barrels'.The Container Store thus introduced the niche
retail category- storage and organisation,in the home furnishing industry and attracted many other companies into the
segment who were unable to survive in the long run."
Thelayout of the company stores is dMdedinto different sections like closet,kitchen,office and laundry with each one
showcasing products related to that particular section of a house. Typicalcustomers ofThe Container Store are affluent
suburbanites. 'Eifa storage system', a patented,Swedish ventilated shelving and drawer system is its highest selling, and
most profitable product acoounting for 23%" of the company sales of $375 million In 2004 (Exhibit II)." The company has
37 stores across the US,and it is believed that the limiting factor of its expansion is finding and training people who fit the
quality of employees at The Container Store." The company also intends to continue as a private company." The
Container Store sales per square foot amount to $450 in 2004",in comparison to the housewares industry-wide sales
average of $125 per square foot."
Exhibit II
Revenues and Employee details of The Container Store
Year Revenues Employees
($million)
2001 260 1473
2002 271 1677
2003 NotAvailable 1741
2004 375• 1832
2005 425 2464
2006 500' 2857
' Sales
* Future projection.
Source: Compiled by the author
The Container Store, that was consecutively placed on the Fortunes 'best companies to wori< for' list for seven years,
{Exhibit Ill) values the contribution ofits employees towards its sucoess.The company believes that to satisfy the customers,
employees have to be satisfied. "If we expect our employees to astonish customers,we have to first take care ofthem,
because they're going to treat customers the way we treat them. Someone needs to role-modelhow we treat each other,"
saidBarbara Anderson, director of community services and staff development of the company.The company towards this
end practices a 'focused people strategy' that intends to- 'hire for fit, train comprehensively and pay and support for
longevity'." The store spends 18% of its sales on employee related expenditure every year."
z; Montgomel)' Ward, established In 1872deals with the mail order bus!ness of the home furnishing goods and atso seliS through its website- Wards.com.
:.; Storehouse iS ahome fumishlng retaner estabiTshe d In 1969 and operates through 60 stores In 15 states In US.
" Berry, Leonard 'Discovering the Soul of Service', page 197
z; "The Container Store helps pe¢ple think !ns.lde the box', op.cit
3
Augstums, leva M. 'Container Store rearranges office', http://www.dallasnews.com/sharedcontentfdws/busl storlesiDN·contalnerstore_04bus.ARTO.State.
Ed'iiion2.135d2e94.hlrnl,Janl!al)' 4" 2006
BerJY, Leonard 'Discovering the Soul of Servicl!, page114
'Leftovers from the Category Kl!lers BBBr http:fforandautopsy.tjpepad.com/brandautopsy/2005l01/leftovers_from_.h!ml, JanuaJ)' 312005
l! "The Container Store helps people think Inside the box', op.clt
lb!d.
Laabs, Jennifer Koch "Thinking Outs!de the Box at TheConta.Tier Store', (l;'orkforce) http:/Mww.findartic:SS.com/p/articles/mLmOFXS!is_3_80/alJ1836861, March 2001
BerJY, Leonard 'Oisco'lefing the Souf of Service", page179

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The Container Store's Customer Service...
The Container Store follows a highly selective recruitment policy. It prefers to keep a position vacant for as long as two
months rather than hire aperson unfitforthe job.33
The recruitment policy involves a telephonic screening, group interview,
along with two to three further interviews that last about three hours. Moreover,The Container Store prefers to hire people
referred to by its employees and rarely places advertisements on recruitment. Tindell observes, "Our director of recruiUng
realizedthat ifs not his job torecrurr great people,ifs the job of our 2,500 employees.We want their friends,their family,their
cousins."37 Employees are paid $200 for every successful recruit referred by them."
Exhibit Ill
Recognitions Received by The Container Store
TheContainer Store's positionin the Fortunes 'Bestcompanies to work for' list
Year Rank
2000 01
2001 01'
2002 02
2003 02
2004 03
2005 15
2006 06
The Container Store's other awards were:
• It won the'Workforcemagazine Optimas Award 2001' in the category of 'General Excellence for outstanding
people-management strategies'.
• Itreceived the No. 3 posiUon in the large business category in the 2003 edition ofthe'Dallas BusinessJoumals
Best Places to Work' awards.
• It ranked No. 31on 'The Dallas Morning News Top 100'list of privately held companies in 2005.
* The Container Store was the first company to consecutively feature twice as No.1 in the fist
Source: Compiled by the author
Apart from employee referrals,the company also believes in recruiting its customers,'When we are in the stores,we
look for opportunities to engage customers in conversation.Who knows? They may be interested in testing the waters as
employees," say Tindell and Boone." Another significant characteristic about the recruitment at The Container Store is that
62% of the company's employees are women. Tindell said,"I'm very,very proud of it, the smartest thing a retailer can do
is hire their customers.Also,Ithink female executives make fabulous team players."40
The employees at The Container Store are also allowed to choose the work of their interest. For instance, for a store
manager who preferred a sales job,a new sales and training position with the same salary was created. Also managers'
recommendations and employee-specific skills determinepromotionsIIithin the organisation as the company does not issue
any notices on its internalopenings.
The Container Store has extensive training programs for its employees.Each of its stores has a full-time sales trainer
called 'super sales trainer' dedicated to only training the employees. The full-time employees are trained for about 235
hours, part-time employees for about 100 hours in their first year and, further, full time employees receive 160 hours of
training annually aftertheirfirst year. The first week of the new employee training comprises of the orientation program
Mil!er, RK 'The Right Package', http:l/wwN.worlindex.comteditoriallhre/hre0101-1.asp
¥ Hanington, Llsa 'At Long Last, Logistics Reache s The Boardroom', http:/M w w.lnboundlog!stic s.com farticle s/fe atures/0 6 03 _fe ature0 2 shtml, June 2003
J; Drickham er, David 'lnteNiew : The Container Store-Thinking Outside of !he Bo:<, http1flalw .m h mo nlin e.co mfn iD /4 06 6/ii01 20 91 4! M H M M ew St o ry.asp , June 2005
J; Tinde. 1tp and Boone, Garret t 'Containing a Counter Cuiture', http:/hr,o,w.1nc.c om/articles /200 2/031 23 988.htrnl, March 2002
" 'Container Store rearrange s office', op.cit

7. 7
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The Container Store's Customer Service...
conducted by the store manager and other employees,called 'Foundation Week' to welcome the employees,along with a
welcome box with more than $150 worth ofThe Container Store's products as a souvenir.During theFoundation Week,the
employees are educated about the company's history and philosophy through tts Foundation Principlesor 'do unto others'
philosophy (Exhibtt IV). The rest of the training addresses the necessary functions to be learnt by the new employees, such
as inventory control, space planning,marlleting and visualsales. The employees are also acquainted with the products and
their functions in an interactive way through skits that makes it more effective. Additional training is provided when the
employee receives a promotion or takes up new responsibilities.The training instructs the employees even about where to
park their vehicles and how to dress on the job.
Exhibit IV
Foundation Principles of The Container Store
1. Fill the other guy's basket to the brim. Making money then becomes an easy proposition. Creatively craft
mutually beneficialrelationships with customers,vendors,and employees.
2. Man In the desert.Don't stop with providing customers with the obvious -water in this analogy. instead,find
out what their needs are andhelp design a solution to fill them.
3. One average person equals three lousy people; one good person equals three average people; one
great person equals three good people. With one great employee, you get three times the productivity,
meaning that you can afford to pay that person twice as much. The employee wins because heor she gets paid
twice as much.The company wins because it gets three times the productivity at two times thepayroll costs.And
the customers win because they get exceptional service.
4. Intuition does not come to an unprepared mind. You need to train before it happens.
5. Provide the best selection anywhere plus the best service anywhere plus the best - or equalto the best
- pricing in our marllet area.
6. Create an air of excitement.
Source: Harrington, Usa "At Long Last, Logistics Reaches The Boardroom", http://www.inbound!ogistics.com/artictes/features/
0603_feature02.shlml, June 2003
Such training is believed to increase the employee loyalty.Analysts observe that employees after the training session
feel investedin,more secure andrespected. Kevin Fuller,director of training and recruiting says, "(After the training),you
have such confidence about your selling, and that rubs off on the customer.It makes you do a better job andgive back 110%
to the company.• The productivity per employee at The Container Store is twice the industry average. 41
Trainingis also required as the storage and organisation products at The Container Store are not easy to understand.
Boone said,"A lot of our bestselling products are something that people cannot figure out on their own, every year we've
just discovered more andmore how important training is to the success of our business.'" The training aims at aiding the
employee in identifying and satisfying the customers' needs. Beth Barrett,vice president of operations at the company's
Dallas headquarters,said,"There's alot of philosophicaldiscussion and education as opposed to justlearning thekeystrokes."
The employees are advised to give the customer a $2.99 waste bin rather than its most expensive $199.99 model, if the
low-cost versionis what the customer needs.Employees are also taught criticalthinking skills. 'The impact of the training is
long-term oriented,Imean, what we do today is going to impact the customer who comes in three months from now.So,its
over time, and we've watched our dollar-per-customer grow from the late eighties when our average dollar-per-customer
was in the low$20s. Our average dollar-per-customer now (2001), depending on the marllet and the store, is headed for
$50,"43
said Barrett. In addition,the employee turnover rate of the company is as low as 10%."
"The Container Store: the power of customer se ·. http:l/uk.biz.yahoo.com/060320061241/container-store-power-customer-service.html,March a2006
'" Steen, Margaret 'Container Store's fetus on traln!ng a strong appeals to employees', http:lfnww.h hbeam.comfllbrarydcc3.asp?OOCI0:1G1:119466008&num =
1&ctrllnfo=Roundl9%3AProd%3ASR%3AResult&ao=&FreePremlum=BOTH, Oclober 2·:1 2003
e "Thinking Outslda !ha Box. at Tha Container Store', op.cft.
"' 'Proof that training does Improve shalf lffe', op.cit

8. 8
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The Container Store's Customer Service...
Tindell and Boone consider learning a never-ending prooess.Foundation Principles,which are considered at par with
corporate policies,are constantly reinforced to the employees. Barbara Anderson,manager of employee relations and
community services at The Container store, said,'One of my greatest responsibilities is taking our six foundation principles
to the stores and making sure every one understands.I look for the principles being practiced. I believe a company can
grow and stilt retain its values. We have found 1500 people who share our values.""
Some of these values are codified. 'Gumby', a cartoon character mascot,conveys the attitude of serving the customer
and also helping the teammates in completing their tasks,as at The Container Store it isbelieved that itis not sufficient if an
employee is a top performer. He is expected not only to help others perform better, but also to communicate how he could
achieve such goodperformance.Teamwork isconsidered to be the largestcontributor to success at The Container Store.
Amy Caroviltano,vice president of inventory controland distribution, says,'No one takes the blame and no one takes the
credit on our culture; it is a group effort.""
The company's management structure Is relatively flat. The focus here is on developing 'talent rather than titles',and
employees even at the senior levelprefer being addressed bytheirfirst names.At The Container Store,even part-time
employees are treated equally and are called 'prime timers'. Boone,when he visits any of the stores, dines along with the
employees and spends time with them. He says,'My purpose is not to examine the store but to talk to every one in the
store."" As per a Fortunfis survey, 97% employees agreed that 'people care about each other' at the company."
The employees also have acoess to allthe financialinformationlike profits,sales andrevenue and also the growih and
expansion plans of the company through daily huddles (a meeting at The Container store where all the employees at each
ofits stores gather every day.This meeting provides information and also acts as skill building andteam building activity),in-
store bulletin boards, regular communication through e-mails and faxes and through frequent company meetings." It is
believed that such communication builds faith in the employees. 'The more people know about the organization,the more
they wilt care', says Jon Wavra,operations manager at The Container Store."'
Analysts opine that the employees at The Container Store are awarded with the recognition they deserve;Boone
himself sends notes to employees to acknowledge their good work.Further,he forwards the letters received from customers
thanking a particular employee, to them, with his personalnote. Employees at The Container Store are also known for
appreciating each other with a 'thank you' or a 'job welt done'.
The Container Store has performance reviews that measure the performance of employees on the basis of set
standards. However, the company considers the actual performance review to be the strength and improvement of
employees in characteristics like attitude,passion forknowledge,and communication.A quick review is undertaken in case
of new employees after the first 45 days of their employment;on the basis of this review,pay is hiked 50-75 cents per hour.
And thereafter, another more formalreview is carried out with an opportunity for up to 75 cents perhour raise. Reviews,then
are continued every six months. The reviews carried out across the whole company are alike without variation among the
warehouse, office and the store employees.
In-store sales clerks earn a salary of an average $40,000 ayear with no sales commissions,in comparison to the nation
average of$23,970 a year.51 'If you realty believe that one great person can do the business productivity of three good
people, you can afford to pay them 50-100 per cent above industry average and everybody wins," says Tindell." The
employees' salaries at The Container Store are based on their value rather than their specific job function. The company
in addition to the salary contributes 68% of its employees' (both full-time and part-time employees) healthcare insurance
premiums that also covers their families, along with various other benefits (ExhibitV).
The company also occasionally conducts events such as 'wellness programs' to make employees health-conscious.
And to encourage them to participate in the events, employees are offered credits. Employees with maximum credits win
rewards such as a $500 healthreimbursement account and certificate of appreciation.At theheadquarters, employees have
.,; BellY, leonard 'Oiscrmring the Soul of Sef'lia!, page 56
,; Barry, leonard •fJiscq ;er ing the $(J!Jf of SYVicd, page 30
" Berry, Leo!la!d •OiscO'Ien'ng the Soul of Sefllia!, page 43
.s "The Con!afner S!O.fe® Tops Fortune's 100 Best Usr, op.cit
.,., Berry, leonard 'OisCO'Iering the Soul of SeMel!, page 176
;) lb!d.
s. "The Container Store helps people think lns!de the box', op.cft.
" 'Proof that tralnlng OOes Improve she:t life', op.cit.

9. 9
406-036-1
The Container Store's Customer Service...
.
406-036-1
The Container Store's Customer Service...
access to benefits like free yoga classes, company-subsidizedmeals at an onsite cafe and free chair massages twice a
month,an automobile concierge, free minor repairs and car washes.Employee disoounts are also available on bank loans,
YoungMen's ChristianAssociationmembership and Sam's Club membership." The company considers the opinion of the
employees while designing the benefits package. Rene Morris,benefits manager said, "Idon't think that a company that
cares about its employees should do a benefits structure without doing a survey of employees.'"
Exhibit V
Employee Benefits at The Container Store
Benefits enjoyed as an employee of The Container Store include:
• Wages far above the industry average
• Generous 40-percent merchandise discount
• Full-time,part-time and flexible positions
• Security ina financially stable company
• Anenvironment that ensures open communication throughout the entire company including daily store sales,
company goals and expansion plans
• Extensive training programs, customized to theindividual and job function
• Individual and team-based incentive programs
• Health and dentalbenefits and vacation for full-time andpart-time employees
• 401(k) savings plan, with dollar-for-dollarmatching company contributions
• Flexible benefit spending accounts for medical and dependent care expenses
• Casual work attire
Ample opportunity to create a future within a fast-growing, fun company
Source: "Learn About Us", http://www.containe store.oomlleam/index.jhtml;jsessionid"803XEH1ADORPBQFIAILSM44AVABBQJVC
Analysts believe that such training and empowerment of the employees, leads to inimitable customer service and
transforms the company itself into a brand. Stan Hoffman, general manager of Corte Madera", says, "They have
absolutely the best customer service in the indusby. Everybody in there is knowledgeable, courteous;you've never met a
nicer bunch of people.'"
AlthoughThe Container Store is one of the best companies to work for,skepticsinquire about the durability of its business
model. Spending 18% of the company sales on employees rather than reinvesting it in business like other retailers is
questionable,as Tindell observes,'When you're that far above a benchmark you really look at it and make sure you haven't
lost your mind and can really afford i.'57
Also, the company makes available financialinformation such as profits andrevenues to its employees.Apart from this, it
also shares future plans withits employees. In most companies such information is considered to be highly sensitive and
important as it forms a crucialpart of the company's future strategy. Analysts believe that The Container Store is taking
unnecessary risk by revealing such confidentialinformation toits employeesbecause it thenbecomes easier for a competitor
s Carlson, Leah 'Storing knowledge: Training distinguishes The Conlalner Store', http:/lvlww.hlghbeam.com!librarydoc3.asp?DOCID=1G1:118103738&num"
4&c!rllnfo=Round19%3AProd%3ASR%3AResul!&ao=&FreePrem!um:BOTH, June 15" 2004
(< lb!d.
s Corte Madera Is an out-door town center In CaMom ia. that holds one of the outlets of The Container S!o;e.
s lhe Contain er Store he!ps people think lnsk!e the box', op.c1t
!'I 'Proof that tralning does Improve shelf life', op.cfl

10. 9

11. 406-036-1
The Container Store's Customer Service...
to get hold of it. However, Amy Carovillano,vice president logistics and distribution atThe Container Store,notes, "The
benefit ofhaving those 3,000 employees have that infomnationso outweigh some competitor getting a snapshot of where we
are.58
The company also has a relatively flat hierarchical structure. This could lead to limited growth opportunities for the
employees. 'Initially,newemployees are a bit skeptical. They say,'You're telling me to trust this system and that I don't need
to have a defined career path right now,'" said Elizabeth Barrett, vice president of operations atThe Container Store."
Analysts opine that promotions based on manager's recommendation can lead to conflict. Also sales clerl<s earning more
than the managers,due to The Container Store's unique perfomnance reviewsystem can create problems.
Neveriheless the advantage the company enjoys is its specialisedproducts that needhighly trained sales people to sell,
as Tindell says, "Our niche is to sell the hard stuff.""'
s Drickha mer, David '1nter.1 ew : The Conta:ner Store-Th:n ing Outside of the Box", http:IM"lfN.mhmonlfne.com/niD/4066/iiD/20914/MHMMeNS!ory.asp, June 2005 s
"The Right Package', op.cit
Berry, Leonard "DiscaJsring the Soul of Service', page 67
10