By George Anderson, RetailWire
The following appears courtesy of RetailWire.com, an online discussion forum for the retail industry.
TreeHouse has been referred to as the Whole Foods of home improvement and "Home Depot for hipsters." Now, the Austin, Texas–based startup is hoping its emphasis on products for greener homes will play just as well in North Texas as it opens a store in Dallas.
"TreeHouse was born in Texas, and it is going to grow up in Texas," said Jason Ballard, chief executive and cofounder of TreeHouse, in a statement. "Dallas was an easy choice for the next location. Many of our investors and board members are based there. The Dallas community has been supporting us for four years, and now it's our turn to give back. Many people have said to us 'Sure, TreeHouse works in Austin, but what about other places?' We look forward to showing that quality, beauty, health, a good earth and good homes are universal values."
The 25,000-sq.-ft. store will be located at The Hill, a shopping center in North Dallas that is close to the city's growing millennial populations to the east and south.
According to Ballard, energy efficiency is of interest to consumers regardless of geographic locations, political leanings or other distinctions. TreeHouse plays up its point of difference with products not readily available in most DIY stores. The retailer was chosen to sell the upcoming Powerwall home battery from Tesla. It also stocks and sells Nest smart home products, Kentucky's Big Ass Fans, Bole Flooring, Roma Bio Paint and Soma Water Filters.
A Dallas Morning News report says TreeHouse has a number of influential investors, the biggest being Container Store cofounder Garrett Boone. Other investors include Gary Kusin, former CEO of FedEx Office, and Justin Cox, son of Berry Cox, a longtime board member of Home Depot.
TreeHouse closed a $16 million round of funding back in July.
Discussion Questions: Do you think the TreeHouse concept can have the same type of success in home improvement as Whole Foods has had in grocery? Are Americans ready to spend big on eco-friendly home improvement materials and technologies?
Comments from the RetailWire BrainTrust:
OK, I concede that high-income hipster homeowners can be a lucrative target segment, but I'd hesitate to roll these stores out in an aggressive fashion.
TreeHouse seems less like a concept for DIYers and more like a showroom for trending home tech and eco-friendly home fashion that may be too complex or unfamiliar to select online. I can visualize some innovative display merchandising going on, as well as a proliferation of facial hair and yoga pants among store associates and customers.
TreeHouse could have opened a second store across town in Austin for this test, but I suspect it knows something about the "urban-gentrification aftermarket" that indicates a one-store-per-city strategy.
-James Tenser, Principal, VSN Strategies
The "hardware store" concept is long overdue for a rework, especially those serving urban markets. Too early to tell how wide TreeHouse's appeal will be. It's probably never going to have the store count of Ace or True Value, but if it can channel the Whole Foods/Trader Joe's consumer it can reach several hundred stores, and based on what I see—I hope so!
-J. Kent Smith, VP, Business Development, Vaco Supply Chain Solutions
No. The eco-friendly home improvement concept is not user friendly, and requires an entirely different housing base. The majority of home owners are simply trying to fix or improve something in their house and the increased costs of eco-friendly products will deter consumers.
-Kai Clarke, CEO, American Retail Consultants
TreeHouse will be a good experiment to see how large the market is for this concept and these products. If they have an online presence that would also help determine the size of the market beyond Texas.
-Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.
Last time I looked, Whole Foods was not doing so well, so the comparison may not be apt. TreeHouse needs to differentiate itself from Home Depot, Lowe's and local hardware stores through the products it sells and the knowledge and skill of its sales people. It does not have to compete on price, but it can't become "Whole Paycheck" either. Being eco-friendly is important, but it breaks the bank for DIYers.
-Max Goldberg, President, Max Goldberg & Associates
Read the entire RetailWire discussion.