The Container Store debuts new custom closet store concept

Discussion
Source: The Container Story
Aug 05, 2019
Tom Ryan

The Container Store has opened a new store concept focusing on closet customization, called The Container Store Custom Closets. 

The first store replaced the location of an existing Container Store in Los Angeles. 

The new concept features more than 65 closet and lifestyle displays covering every area of the home, including pantry, garage and office, along with a selection of complementary organization products.

Customers looking to handle the custom closet process on their own gain access to free in-home design services, including professional space measurement advice.

The store is also positioned as a hub for local designers and trade members. Designers can use the space for client meetings. Complete with work stations and a full design center offering complimentary services, the store accommodates more customer appointments per day than a traditional Container Store.

“We want to offer customers in multi-store markets a combination of traditional full-assortment stores as well as Custom Closets stores catering to those interested in custom space designs with more robust resources,” said Val Richardson, VP of real estate for Container Store, in a statement.

The custom closets category has grown to half of Container Store’s sales with a fourth closet line just launched. In the first quarter ended June 29, custom closets categories delivered an 11.1 percent comp gain, driving Container Store’s overall comps ahead 7.8 percent.

The gain came despite what officials felt was a lesser benefit from the Netflix show, Tidying Up with Marie Kondo that popularized the KonMari method in the latest quarter versus the fourth quarter. 

Melissa Reiff, CEO, told analysts on a conference call, “Our number one focus continues to be owning custom closets and capturing greater share of the estimated $6 billion custom closets market.”

Expanding custom closets will also be a focus at Container Store’s flagship stores. “Some people think we just sell containers,” Ms. Reiff told The Dallas Morning News.

DISCUSSION QUESTIONS: Does The Container Store need a separate banner to fully explore the custom closets opportunity? Do see the potential for a few or many stores?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"As someone who has spent way too much time in the Elfa section of the Container Store (their custom closet brand), I would say this is an excellent idea..."
"They have the footprint to do this, but I’m not sure it is the best way to monetize the footprint. I have a custom Container Store closet. I didn’t set foot in the store once."
"The customer has embraced and validated the idea. Go for it. With some clever marketing the brand promise is extended."

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12 Comments on "The Container Store debuts new custom closet store concept"


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Nikki Baird
BrainTrust

As someone who has spent way too much time in the Elfa section of the Container Store (their custom closet brand), I would say this is an excellent idea – as long as it is staffed to match the number of customers coming in. It takes a long time to get through an Elfa order, especially when you’re using store associates as design experts to start with. It’s a good idea to build a space that is better designed and staffed to meet those needs.

However, that said, whenever I’ve been waiting to meet with an Elfa designer, I am always wandering the full store and inevitably pick up other things, so the trade off of better Elfa sales may come at the expense of some of those browsing items that will no longer be there. It may be that this shows just how important convenience is as a factor in serving customers, that it’s more important to make sure that customers don’t wait, even if that means missing out on other sales.

Neil Saunders
BrainTrust

There is certainly enough room and spending power in the custom closet market to allow Container Store to develop some kind of standalone business. However, the size of that operation is limited, both by the number of customers in the marketplace and by the number of locations which would have sufficient demand to justify a standalone store. I would much rather Container Store use its existing stores to develop the closet business – not least because many of those stores underperform as Container Store struggles to bring in regular and repeat footfall because what it sells is an occasional or special purchase.

Art Suriano
BrainTrust

Everyone is looking for that next new best thing. However when a business is thriving like The Container Store, I would be cautious with how far we go. I don’t see the need for a separate banner because The Container Store has been thriving with success. Too often we see retailers expanding their chains with new stores featuring a different concept. Then years later, we find confused customers not shopping them as they used to, and the retailer is forced to close stores. The Container Store has built an excellent brand and reputation, and customers are familiar with what they offer them. I think they could have, if need be, added a section in existing stores to feature this new concept, but I don’t know that I see a whole store. Only time will tell how successful this new venture may or may not be.

Rich Kizer
BrainTrust

YEP! A brilliant idea with millions of customers in need. Most retail “closet” offerings are strictly offerings of different and mostly non related pieces. This thrust adds romance in creating sales multiples and envisioned closets … all at one stop. And now you don’t need the “organizing specialist” coming in-home to sell to you. I can’t wait to see this, and most likely buy into this.

Lee Kent
BrainTrust

I do love the concept of a store dedicated to Custom Closets, however, I don’t know the math behind it. I just can’t tell you how many times I have been into the Container Store for closet help and left with nothing. They are always busy and if you try to look at the closet stuff by yourself, it leaves me with too many unanswered questions. Unless you know what you want and need in a closet, doing it yourself is not the best idea. So much can be overlooked. Good luck with this and my 2 cents!

Dave Bruno
BrainTrust

The article does not discuss how The Container Store will facilitate cross-selling of Container Store products not related to custom closets, but if they make it easy to cross-sell and support the customer’s whole-home storage needs from their custom closet stores, I think this idea has legs. At least in the short term. DIY custom closets that are brought to life with TCS are the full embodiment of their brand promise, and if the total addressable market is indeed $6 billion, then I think this is a good bet to make.

Jeff Sward
BrainTrust

Sounds to me like they have the new banner after adding two simple and very descriptive words: “Custom Closets.” I know I’m being very literal, but why does it need to be any more complicated than that? They tested and explored and found a new market opportunity that works. The customer has embraced and validated the idea. Go for it. With some clever marketing the brand promise is extended.

Gene Detroyer
BrainTrust

I love those pictures of an organized closet. Why don’t mine ever look that way?

Michael Decker
BrainTrust
Michael Decker
Vice President, Marketing Strategy
5 months 15 days ago

True custom closets take a surprising amount of expertise and customer service to pull off without a hitch. The Container Store has mastered it with their in-store ELFA offerings and has seen significant growth. Why not leverage this proven high growth service with a “dedicated” concept unto itself? Macro retail trends suggest younger shoppers are looking for smaller, more focused and more authentic personalized shopping experiences. So here you go!

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
5 months 14 days ago

It’s an interesting concept to increase the visibility of products/services that may not usually be associated with The Container Store. It allows this portion of the business to shine as the star of its own store. However, this is a niche business that may not support standalone stores in the long run.

Bethany Allee
BrainTrust

The idea to focus on an area where they see growth and they retain a competitive advantage makes a lot of sense. They have the footprint to do this, but I’m not sure it is the best way to monetize the footprint. I have a custom Container Store closet – I didn’t step foot in the store once. If the store footprint is leveraged to drive consumers to the digital experience, that’s one thing. Ultimately though that makes the footprint unnecessary overhead. For this experience, consumers don’t need to go into the store, because they need to have access to their closet for measurements and to visualize. I’m on the fence with whether or not I think this will be effective in driving more custom closet sales. I definitely don’t think it’s the best way to monetize the footprint.

Shep Hyken
BrainTrust

This is what The Container Store is known for; organization of space. Why fly under a separate banner or name? This is right in the “wheel house” of The Container Store. Why confuse the customer about who they are and what they stand for?

wpDiscuz
Braintrust
"As someone who has spent way too much time in the Elfa section of the Container Store (their custom closet brand), I would say this is an excellent idea..."
"They have the footprint to do this, but I’m not sure it is the best way to monetize the footprint. I have a custom Container Store closet. I didn’t set foot in the store once."
"The customer has embraced and validated the idea. Go for it. With some clever marketing the brand promise is extended."

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