For Jason Ballard, president and co-founder of green home improvement retailer TreeHouse, there was no predetermined path forward as he launched his startup on the fringes of hipster Austin, Texas, in 2011.
But as we gazed over the site of the sizable dig that will soon become TreeHouse #2 in oh-so cosmopolitan downtown Dallas, it has become crystal clear that Ballard has found his way among the emerald aisles of specialized products and services that are the essence of his bricks and mortar brand.
It’s also clear that Ballard will continue delighting customers with a decidedly different experience in his right-sized green stores than they will get inside the big-boxed oranges of a Home Depot or the blues of a Lowe’s. And as TreeHouse sails into previously uncharted waters with this new Dallas location, that experiential chasm with its distant retail kin grows ever wider: The new site will be graced with a groundbreaking sawtooth-roofed building, designed from the ground up to deliver a zero-energy footprint―a structure that will never use grid energy.
For the design work―purposefully rendered to reflect the tenets of the TreeHouse brand―Ballard engaged the equally green and sustainable architectural firm of Lake|Flato, a Central Texas-based company that has a strong foundation in commercial and residential architecture.
Under construction in metropolitan Dallas, the second TreeHouse is nestled between a busy freeway and high-rise office buildings. In this view of the front entry area, the laminated roof beams extend outward to shield the building from the intense Texas sun.
That decision was obviously not taken lightly: As we donned hard hats and fluorescent green vests and ventured onto the building site, Ballard articulated: “Unlike Best Buy, Nordstrom, Nieman-Marcus, and other very successful retailers in other categories, our buildings aren’t incidental to our brand. We are a brand about buildings.”
Unlike Best Buy, Nordstrom, Nieman-Marcus, and other very successful retailers in other categories, our buildings aren’t incidental to our brand. We are a brand about buildings.
So, clearly an aha moment: The medium can indeed be the message.
Here, in the first installment of a multi-part series following our exclusive sit-down with Ballard, he discusses the events that led up to the birth of the Dallas store concept, how he differentiates his company from its big-box competitors, and how the unique brand tenets of TreeHouse are manifested in the building taking shape in advance of its grand opening later in 2017.
DH: Austin has always been at the forefront of the green building and sustainability movement, so building TreeHouse #1 there was a reasonable―some might say a natural―move. Can you tell us how you went about selecting the new location?
JB: It was kind of the coming together of several issues altogether at once. When we first decided it was time to expand, we had two basic paths we could follow. One was to expand psycho-graphically, expand to cities that are temperamentally a lot like Austin. Then another opportunity was to expand geographically to the same region of the broader neighborhood that we were already operating in, which for us was Texas.
Built on the site of a former Borders bookstore, the flagship TreeHouse store on the outskirts of Austin, Texas, celebrated its 5-year anniversary in October, 2016.
As we sought advice from some other folks in this space, one in particular was Ron Johnson, who is the head of Apple retail, and his advice along with several others was to absolutely not expand psycho-graphically. Definitely do everything you can do to expand more geographically.
From that advice, if you expand psycho-graphically you’ll end up putting stores on islands, where each store will become its own little island and then you have all the challenges of running a big, spread-out company with none of the advantages. Like centralizing your supply chain, centralizing marketing efforts, and those sorts of things. And so you get all the challenges and none of the advantages of being a big company.
So that was one marker on the ground, and we decided to first expand geographically in Texas. Our big options then were San Antonio, Houston, a North Austin location, or Dallas.
DH: So Texas it was. How did you end up zeroing in on the Dallas market?
JB: What attracted us to Dallas was some information from Whole Foods Market, which indicated Dallas is a real strongly performing market for them―and I think we have a lot of customers in common with Whole Foods.
Another issue that drove us here to Dallas was availability of real estate. We looked very, very hard in Houston, but weren’t able to find any real estate that we were really excited about―either from a [storefront] visibility standpoint, or the assessment of the landlord’s imagination in helping our buildings be a statement about what kind of company we want to be.
Additionally, a lot of our investor community and most of our board of directors live in Dallas. So I guess what you’d call the ground game for our company is very strong here.
The last issue―mostly from an investor’s perspective―is what we sometimes hear people say about us: Austin seems like a natural fit―so, of course you guys started in Austin. There’s still this lingering question about whether TreeHouse can ultimately displace conventional home improvement and home building, and Dallas is an opportunity for us to prove that. So we hear: Of course you work in Austin, but can you work in a normal city?
I think that Dallas is an opportunity to prove an argument. We can not only operate here, we can really thrive here.
So I think that Dallas is an opportunity to prove an argument. We can not only operate here, we can really thrive here and just sort of put to bed any final doubts that this indeed is the way we are approaching home improvement for the future.
DH: Displacement means going up against the big-box stores with your smaller-footprint locations. Does that indicate you are fundamentally rewriting the playbook for home improvement?
JB: Home Depot, for example, has a playbook that they wrote and it works really well for them and obviously they have been quite successful by a number of metrics, but there are other metrics to think about when gauging success. And when we looked at conventional home improvement companies; I think the flaws in the model that’s ultimately going to be a challenge for them in the future is related to different kinds of experiences. How knowledgeable is the staff? How easy is the store to navigate? How do I feel when I go in there? How easy was that? How delightful was that? How complicated was that?
So when you walk into a conventional home improvement retailer it looks like an answer to the question: How do we make more money? The store looks like it’s trying hard to answer that question. They are effectively glorified warehouses that you’re allowed to shop in.
We would like to think of our stores as a center and a ground for going on this journey. They are a place where you want to empower the journey of home improvement, from dreaming and having ideas and wish-listing, through budgeting and planning and designing, all the way through product or project selection, project management, and then long-term care of you and your home.
What if you were imagining the store not as a warehouse, but as a place to support and enable those experiences? That’s the set of questions that we are trying to use our stores to answer.
DH: You’ve engaged with Lake|Flato for the architectural work, and all indications are this will be a groundbreaking sustainable design. How will the overall cost of designing and building this structure compare to more conventional retail construction?
JB: Unlike BestBuy, Nordstrom, Nieman-Marcus, and other very successful retailers in other categories, our buildings aren’t incidental to our brand. We are a brand about buildings, and it seemed to us that the risk and cost of hiring Lake|Flato to do the design was far less than the risk of going about business as usual.
When you have a social business like TreeHouse―a business that was started to solve things like social or ecological problems―you’re kind of inviting public scrutiny, so we feel that we have to walk the walk.
I think when you have a social business like TreeHouse―a business that was started to solve things like social or ecological problems―you’re kind of inviting public scrutiny, so we feel that we have to walk the walk. And again, the costs of not doing that is far greater than the incremental cost of upgrading to an architect like Lake|Flato.
In terms of construction cost, it turns out that this [Dallas] building is not that much more difficult to construct than a typical building, and we are able to use common concrete tilt-wall construction. Again, the costs are incremental and then the result is you have a building that’s far more comfortable and has effectively no electric bill. This building will never draw down a watt of electricity from the grid.
And so, in fact, if you analyze the building over a 10-20-30-year lifespan―which is how long we plan to be here―this is the most financially-wise decision we could have made: To effectively construct a building that is ultra-high performance.
The challenge was not in biting off the cost of doing this, as the costs are incremental, not exponential. The big challenge was finding a landlord who was willing to be this ambitious.
DH: How much of the store concept did you already have in mind as you walked into the process with the architects?
JB: One of the interesting principles about sustainable building is that you have to be very careful about having too many ideas ahead of time, because these buildings need to be very properly situated to their site. So beyond knowing that we wanted sort of an essentialist, quasi-modern Texas aesthetic with some residential design language that matches with our brand.
If you look at our website and the materials we produce, we have sort of essentialist but warm aesthetic―I hesitate to use the word modernism―because modernism often conveys ideas of coldness. Essentialist here says we try not to be too flashy and flamboyant with our brand, so it’s just the essentials, but in a really warm and approachable way. So that’s our brand ethos and we wanted that conveyed into the design―and I think Lake|Flato does a wonderful job with that.
One of the signature elements of the Dallas building is a distinctive sawtooth roof, a fitting habitat for a solar panel farm and swaths of clerestory windows. Lake|Flato Architects is behind the design.
Lake|Flato is an essentially-Texas architect, and their buildings are very colloquial to Texas. So we knew we wanted all that, and then approached the design process open-minded. We knew we wanted a net zero energy building that followed our brand guidelines―which we shared with Lake|Flato―and then very quickly arrived at that design.
As I step back and look at it, actually it’s a very striking building.
This is the best way to achieve a net zero building. The sawtooth roof and the [clerestory] windows were first conceived for performance effect and not for aesthetic effect. And as I step back and look at it, actually it’s a very striking building if you do it that way. We really landed on the answer quite quickly, and didn’t have to do a ton of iterations.
Coming in Part 2
In The Emerald Aisles of TreeHouse: Part 2 we dig into some of the groundbreaking design and architecture details of this new retail venue, how Ballard intends to cater to new customers, and insights on the elevated emphasis he places on the selection and nurturing of the talented staff he surrounds himself with in these atypical stores.