Cover Story: Getting Organized
The Container Store, a leading multichannel retailer of storage and organization products, understands the importance of having a cross-channel retail strategy: Developing cross-channel customers pads its bottom line.
"We know that our multichannel customers are about three times more valuable to us, so we do focus on developing more of them," says Catherine Davis, direct marketing manager for The Container Store. "We've learned that customers who shop both online and in stores dramatically outperform the rest of the customer base, and are the fastest-growing segment."
The Coppell, Tex.-based company was started by Chairman and CEO Kip Tindell and Chairman Emeritus Garrett Boone in 1978 with one retail store in northern Dallas. It currently sells its storage and organization solutions through catalogs, a transactional website and 48 retail stores nationwide. Just two years after opening its first store, the company launched its first catalog, and in 1992 started offering a mail order form in its catalogs, making it a true multichannel retailer. In 2000, The Container Store launched its transactional website. Currently, web and catalog sales make up 10 percent of the company's total revenues.
One way The Container Store develops cross-channel customers is through consistent brand messaging across all of its customer communications. "Whatever the theme is for a particular campaign we're running, we make sure our messaging is consistent," Davis says, "whether it's online in our email marketing, affiliate marketing and search marketing programs, offline in our direct mail campaigns, or on billboards, radio, TV and newspaper ads."
GoShop! Click & Pickup
A big part of The Container Store's strategy of cultivating multichannel customers stems from its GoShop! Click & Pickup program, which was launched in Oct. 2008 in all of its stores. The program allows customers to pick up purchases at a store within two hours of ordering online.
The program works like this: Online shoppers purchase their items on The Container Store's website, then choose the GoShop! Click & Pickup option and enter a ZIP code. The site displays the nearest store and notes that customers can change their preferred location at any time while shopping. When a customer goes directly to a product page to purchase an item, they'll see whether that item is available or back ordered based on the ZIP code they previously entered. After all the items have been added to the shopping cart, customers can choose when to pick up their purchases (pickup is free).
The program is creating more valuable multichannel customers for the retailer.
"The GoShop! Click & Pickup program is driving frequency of visits from our in-store customers to our website, which is a critical component for our growth," Davis says.
They're also spending more. The Container Store first tested the program in the Dallas/Fort Worth area and found that customers who ordered online for store pickup spent twice as much as those who placed web orders for home delivery, and three times more than customers in stores.
And more and more customers are using the service, according to Davis. "On a daily basis, about 35 [percent] to 40 percent of our online orders now go through Click & Pickup rather than the standard order and delivery method."
Last summer, The Container Store took this concept one step further after talking to its customers, launching its call ahead Curbside Click & Pickup program. With this program, which is available in all but seven of its locations, customers can call ahead to their retail location and employees at that location deliver merchandise to them curbside.
"Since a lot of our customers are moms with small children, they really appreciate the ability to pull up to their local stores and have their car loaded," Davis says. "It is especially helpful when they have heavy or bulky items and they don't want to bring their children into the store."
An ideal multichannel experience should meet a core customer need, and The Container Store is executing a strategy that does exactly that — one where customers complete half of their transactions online and the other half in person, according to Kevin Hillstrom, president of MineThatData, a database marketing consultancy.
"My projects continually indicate that any customer who has an experience with a live human being has greater long-term value than customers who do not have experiences with live human beings," Hillstrom says. "Retailers that can meet a core customer need and introduce wanted human assistance have a good chance to experience sales increases."
Another way The Container Store courts multichannel customers is by collecting the postal and email addresses of customers when they shop in stores.
For example, at the point-of-sale, employees collect customer address information, which is either added to the company's database or appended to individual customer files. The Container Store doesn't collect email addresses at checkout yet, Davis says, but will do so shortly.
The Container Store does collect email addresses from its custom design center, where customers work with designers to create their planned spaces with The Container Store's elfa line, the storage system that's been the company's best-selling product since its debut in 1978. The email addresses are necessary, according to Davis, so designers and customers can regularly communicate with each other regarding custom designs.
Customers can also register on the company's website by entering their email addresses, and, Davis says, "we've created several promotions to encourage email sign up, so we're able to have continual growth of our email database."
The Container Store is also integrating ratings and review content on its website into other channels.
"We added product ratings and reviews in January 2010, and we're really excited about the results we've seen," Davis says. "Currently, 25 percent of the products on our website have ratings and reviews, and now we're looking at ways to integrate them into other campaign materials."
For example, the company added ratings and reviews to product emails, and will add them to direct mailings this summer. It's also looking at opportunities to integrate ratings and reviews at retail stores.
Facebook, Twitter, Mobile Oh My!
The Container Store has also dipped its toe into the social networking pool. The company's Facebook page, which launched last May, currently has 37,000 fans. In November, it joined Twitter and now has about 2,000 followers.
"We're really a very transparent company," Davis says. "We like to use these tools as ways to communicate with our customers in a different, more intimate way than we can do with any other media."
Later this year, The Container Store plans to "dabble with single-item promotions targeted exclusively to those consumers following The Container Store on social channels," says Davis. "We want to keep these folks interested."
The company has also experimented with mobile shopping through Yowza!!, a free mobile coupon application that uses consumers' smartphone GPS to deliver deals that are relevant to their locations. But it hasn't fully committed to mobile yet.
"While we're watching mobile very closely, collecting mobile phone numbers from our custom design center customers and have a good amount of traffic to our site from mobile devices, we haven't yet launched a mobile marketing initiative," Davis says.
Later this year, The Container Store will start phase one of a face-lift to the elfa custom design area on its website, where visitors go to create and order their custom modular closets, shelving and drawer systems.
"Currently the system we have is basic, with blueprint-style renderings," Davis says. "The new system will offer dimensional renderings that are more visual, more stylized and more colorful that will encourage visitors to play and create their ideal closets."
Consequently, she says, "more customers will be able to better interact with our elfa line, which will ultimately increase sales."
The Container Store will roll out the in-house system next year in its brick-and-mortar locations so customers will have the same dimensional visual experience. Customers already have the option to start their design processes online and have designers pull up their plans and complete them in the stores.
"We'll also have customers' designs on file, so designers will be able to reference them whenever customers want to change, modify or upgrade their custom solution," Davis says.
This is another example of how The Container Store is integrating its online and offline channels.
"We want to make it easy for the customer to work with us, no matter which channel they choose," Davis says.