The Container Store Marketing Plan Executive Summary
1.
2. 1.0 Marketing Plan Executive Summary
• Situational Analysis 2.0-2.6: For the last 36 years The Container Store
has been the leader in the storage industry. Their Target Markets are
Housewares, Office, Travel, Storage, Kitchen. Their core customer is
Residential, Affluent, Highly Educated, Busy and Predominantly Female.
They sell over 10,000 creative and original products (10-K Report) with
highly trained employees
Marketing Strategy 3.0-3.8: The key strategy is focusing on the on core
customers, quality and price. Another strategy is adhering to the companies
mission statement while laying out Marketing & Financial Objectives. This plan
will show Positioning Strategies, Marketing Programs and Marketing Research
Financials 4.0-4.4: The Container Store’s break-even analysis, Sales Forecast,
Milestones, and Marketing Expense Budget. The financials section of the
Marketing plan is essential for Investors to see the conservative growth
TCS expects in the next couple years
Controls 5.0- 5.3:
• Quarter and annual plan control by sales analysis and sales to expenses ratios
• Profitability/Cost control by product categories and segments
• Efficiency control of sales force, marketing communications, advertising
and brand awareness
3. 2.0 Marketing Plan Situation Analysis
• The Container Store (TCS) has grown into the leading specialty retailer of
storage and organization products since it opened its doors 36 years ago
• They have done so with a much smaller number of stores than their
competition by specializing in, growing, and mastering their product offering
• With an extremely diverse market, the US still offers plenty of opportunities
for growth before TCS expands internationally
• TCS finds themselves is a very comfortable position with a successful
business model and no reason to rush growth beyond their means
4. 2.1 Marketing Plan Market Summary
Virtually anyone with storage or organization needs can be considered
part of their market. They focus primarily on the residential consumer
(versus a commercial consumer market). As of 2013, with 63 stores
in 22 states and the District of Columbia (10-K Report),
they have a nationwide market, with plenty of room to grow
Target Markets
Housewares, Office, Travel, Storage, Kitchen
5. 2.1.1 Marketing Plan Market Demographics
With a product that can be useful to almost anyone, The Container Store’s
market is very broad. Their core customer can be identified
as follows (10-K Report):
• Residential
• Affluent
• Highly Educated
• Busy
• Predominantly Female
6. 2.1.2 Marketing Plan Market Needs
• The Container Store provides storage and organization products with a goal
to provide a solution for any lifestyle and any situation
• They sell over 10,000 creative and original products (10-K Report) with
highly trained employees who are skilled at matching their products
with consumers’ unique needs
• Based on the quality and price of their product, TCS requires a consumer
with the disposable income to acquire belongings (and enough of them)
which require storage and organization as well as the desire to keep
their home neat and orderly
• TCS also requires a dense population of its core customer in order to
initially open a location and to sustain itself
7. 2.1.3 Marketing Plan Market Trends & Growth
• We believe the category is growing and will continue to grow due,
in part, to several favorable demographic trends
(1) The desire for efficiency and organization of Baby Boomers as they become
‘‘empty nesters”
(2) The generation of Baby Boomers’ children driving demand for
organizational products as they move into their first homes
(3) The increase of dual-income families with a need for solutions
to organize and simplify their busy lives. Given The Container
Store’s industry leadership, unmatched product assortment and
customer service, and national footprint, we believe we are well
positioned to increase our share of this growing category.
• Cultural influences toward a stress-reduced, uncluttered, “clean”
lifestyle also lead consumers to TCS for solutions to their storage needs
(10-K Report)
8. 2.2 Marketing Plan SWOT Analysis & Competition
Strengths Weaknesses
Opportunities Threats
Strengths
Employees
Customer Service
Product Line
Powerful Brand
Weaknesses
Price
Direct Sales
Number of Stores
Opportunities
Online Sales
Expanding
Markets
Untapped Markets
Threats
Competition
Change in
Customer Demand
Change in
Lifestyle
2.3 Competition
There is little direct competition from other national or regional retailers
in the storage and organization market. However, storage and organization
products are sold by a variety of retailers,
Walmart, Target, IKEA, Bed Bath & Beyond,
Crate and Barrel, Home Depot, Lowe’s
9. 2. 4 Marketing Plan Product Offering
Their stores typically showcase 16 different lifestyle departments (10-K Report)
• Bath: countertop, cosmetic, jewelry, shower, and drawer organization
• Box: boxes, packing material, tape, bags, specialty boxes
• Closets: shoe racks, hangers, hanging storage bags, garment racks
• Collections: media storage, photo storage, display, small craft & parts organizer
• Containers: (boxes, baskets, tins, containers)
• Elfa®: wall & door racks systems, drawers accessories, utility & garage systems
• Food Storage: canisters, jars, bulk food storage, plastics, glass
• Gift Packaging: gift wrap, tags, ribbon, bows, gift bags, gift boxes
• Hooks: wall mounted, self-adhesive, magnetic, over-door, removable
• Kitchen: drawer liners, countertop, dish drying racks, cabinet storage
• Laundry: step stools, hampers, laundry bags, drying racks, cleaning tools
• Office: desktop collections, paper storage, message boards
• Shelving: free-standing shelving, wall mounted, cube system, desks, chairs
• Storage: drawers, boxes, bins, totes, crates, carts
• Trash: recycle bins, wastebaskets, open cans, step on cans, bags
• Travel: luggage, totes, clothing organizers, cosmetic, jewelry, travel bottles
• 10,000 original products
• 700 vendors worldwide
• 2,000 new products each year into their stores
10. 2.5, 2.6. Keys to Success & Critical Issues
• Two critical issues facing The Container Store are how do they drive
online sales and how do they expand their store base without diluting
the high quality experience they are known
• The Container Store currently collects about 5.6% of net sales online
and thru their call center, with an additional 4.3% of net sales coming
from The GoShop! Click & Pickup (online order, in-store/curbside pickup)
• A company this large and broad with a wide-ranging product base
should be doing more online/direct sales than 10%.
• On a positive note, online and call center sales increased 140% from
fiscal 2009 to fiscal 2013, including 11% growth in fiscal 2013.
But these numbers leave much room for improvement for
The Container Store
The Tree Major Keys to Success are:
• Their Employees
• Their Loyal Customers
• Their Business Plan
11. 3.0. Marketing Plan Strategy
Marketing Strategy
• Focus on creativity, multifunctional, and customizable organization and
storage products.
• Saves the customer “time, space, and improves the quality of their lives”
12. 3.1 The Container Store Mission
As said on The Container Store website, “We believe our commitment to
the category, breadth of product assortment, passionate employees and
focus on solutions-based selling create a long-lasting bond with our
customers and foster devotion to The Container Store brand. As a result,
we continue to expand our base of passionate, enthusiastic and loyal
customers, which we believe will further drive our growth and profitability.
We foster an employee-first culture built around our Foundation Principles,
which define how we approach our relationships with our employees,
vendors, customers and communities and influence every aspect of
our business”
13. 3.2 3.3 3.4 Marketing Objectives, Financial objectives
and Target Markets
3.2: Marketing Objectives
• Develop more multi-channel customers
(ones that shop both in store and online).
• Increase direct to consumer percentage of sales
(web and catalog); currently at 10%
(when compared with 90% of sales come from retail stores).
• Make positive, strong growth each quarter
3.3: Financial Objectives
• Increase annual sales. Currently $500 million in annual sales.
• Increase budget on catalog distribution to increase mail circulation
3.4 Target Markets
- Store focuses on females, residential, higher class customers, who is an
“on the go” type of person and needs quick and simple solutions.
- Store does appear to be branching out to reach other target markets
with their carrying of specialized products.
(I.e: Their college/dorm section and their traveling products).
14. 3.5 Positioning
3.5: Positioning
• Positioning itself as the number one store in North America to satisfy ones
organizational dilemmas, and provide with necessary household tools
•- The Container Store will also focus on promoting its Elfa brand, which is a
one of the main suppliers of shelving units (used in closets for example).
Although this brand is sold worldwide, The Container Store is the only
distributor of it in North America
• Its employees are also trained and knowledgeable. Partnered with their
products, this makes The Container Store a leader in the
storage retail industry
15. 3.7 Marketing Program
• Pricing - Based on per-product retail
price when compared with other
retailers. Will be in “speciality” store
pricing and quality of product versus
other retailers.
• Distribution - Retail stores are number
one comprising 90% of
The Container Stores distribution sales.
10% are from the website and direct to
consumer catalogs.
• Advertising and Promotion: Print and web
advertisements utilized. Social media like
Facebook and Twitter used to reach more
consumers. Also, a blog with sweepstakes
are on the website and attracts customers
• Customer Service: Specially trained
employees with strong store
foundational principles
16. 3.8 Marketing Research
• Ability to reach customers both in store, on line, and through their catalogs
• Enables them to see what products are being utilized by customers,
and which ones aren’t as popular.
• Possibly make the transition to becoming more commercially based as well
• They can see if customer service plays a role in customers returning, or if
online store sales increase..
17. 4.0, 4.1, 4.2 Financials
This section will detail The Container Store’s break-even analysis, Sales Forecast,
Milestones, and Marketing Expense Budget. The financials section of the Marketing
plan is essential for Investors to see the conservative growth TCS expects in the next
couple years.
19. 5.0 Controls
To assess the effectiveness of its marketing strategies,
The Container Store implements the following
assessments and evaluations
• Quarter and annual plan control by sales analysis and sales to ratios
• Profitability/Cost control by product categories and segments
• Efficiency control of sales force, marketing communications and
advertising and brand awareness
Notes de l'éditeur
The Container Store’s market is a very broad market. Virtually anyone with storage or organization needs can be considered part of their market. They focus primarily on the residential consumer (versus a commercial consumer market). As of 2013, with 63 stores in 22 states and the District of Columbia (10-K Report), they have a nationwide market, with plenty of room to grow. Their product line extends across many retail segments (house wares, office supplies, travel, etc) which brings competition from all angles, but none of which is specialized enough to challenge them as the leader of this specialty retail market.
We believe the
category is growing and will continue to grow due, in part, to several favorable demographic trends,
including (1) the desire for efficiency and organization of Baby Boomers as they become ‘‘empty
nesters,’’ (2) the generation of Baby Boomers’ children driving demand for organizational products as
they move into their first homes and (3) the increase of dual-income families with a need for solutions
to organize and simplify their busy lives. Given The Container Store’s industry leadership, unmatched
product assortment and customer service, and national footprint, we believe we are well positioned to
increase our share of this growing category.
Strengths
Employees: Highly selective and highly trained to serve any customers unique needs.
Customer service: More than just answering questions, providing ideas and solutions.
Product line: 10,000 original products and store layouts to highlight product functionality.
Powerful brand: Has become synonymous with high-quality, aesthetically pleasing products.
Customer loyalty: Once tried, many customers return for more products in the same line or in one of their 16 other lifestyle departments.
Weaknesses
Price: Their high quality products have a higher average price than their competition.
Direct sales: Their online/call center sales only account for about 5.6% of their net sales and their order-online/in-store pickup platform, GoShop! Click & Pickup accounts for about 4.3% of net sales. (10-K Report)
Number of stores: With only 63 stores in 22 states and the District of Columbia, they are missing out on numerous markets nationwide.
Opportunities
Online sales: This day in age, a strong online retail presence is a must for a successful company.
Expanding market: Cultural influences encourage a lifestyle that TCS promotes.
Untapped markets: There are literally hundreds of potential untapped markets TCS could serve, not including international expansion.
Threats
Competition from multiple angles: Though TCS is the leading specialty retailer of storage and organization products, due to their product line, TCS faces competition from many different directions.
A change in consumer demand/lifestyle: Instead of consumers reducing the stress of their lives by neatly organizing the belongings they have, what if consumers simply just bought less stuff?
The Container Store is unmatched in their product offering. With over 10,000 original products from over 700 vendors worldwide, no other company comes close to offering the diverse and unique storage and organization solutions that The Container Store does. Their buying team works directly with vendors for exclusive products for The Container Store, introducing approximately 2,000 new products each year into their stores. True to the style of a market leading company, many of the new products that are rolled out each year are based on direct feedback from their customers.
Critical Issues
Two critical issues facing The Container Store are how do they drive online sales and how do they expand their store base without diluting the high quality experience they are known for.
The Container Store currently collects about 5.6% of net sales online and thru their call center, with an additional 4.3% of net sales coming from The GoShop! Click & Pickup (online order, in-store/curbside pickup). A company this large and broad with a wide-ranging product base should be doing more online/direct sales than 10%. On a positive note, online and call center sales increased 140% from fiscal 2009 to fiscal 2013, including 11% growth in fiscal 2013. But these numbers leave much room for improvement for The Container Store.
The Container Store currently has 63 stores in 22 states and the District of Columbia. They have plans to open 7 new stores in 2014 and wish to grow their square footage by 12% a year. They believe they can grow to over 300 stores in the U.S. But the question is whether they will be able to maintain the high quality experience they have become known for. How will they grow the vendor relationships that provide them with high-quality products without sacrificing quality? Will they be able to properly train their staff that has become such a valuable asset if expansion moves too fast? Starting with one store in 1978, they have been able to grow slowly and under control, more focused on the customer experience rather than investor stock prices (The Container Store went public in Nov. 2013). But will being a publically traded company change the core values that brought success to The Container Store? With a focus on the values that grew the company to what it is today, TCS can grow at a steady pace (as it has), which may not be fast enough for some investors, but would pay off handsomely in the years to come.
Container Store Group, Inc. Fiscal Year-End March 1, 2014. 10-K Report. Container Store Group, Inc. 2014. Web. 12 July 2014.