- TreeHouse is positioning itself as a disruptor in the nearly $350 billion home improvement sector.
- The company's 'end to end' approach sells products and teaches consumers how to use them.
- "The days of retail as a warehouse full of products are quickly coming to an end," CEO Jason Ballard told CNBC.
Putting together a house is an experience — and TreeHouse wants to help consumers do it from start to finish.
From carefully selected products, to employees that guide customers in projects and workshops led by professionals, CEO Jason Ballard is determined to make his Austin, Texas-based home improvement start-up convey purpose, and separate it from other players in the market.
Unlike most of the companies that operate in a $347 billion market mostly dominated by giants such as Home Depot and Lowe's, TreeHouse focuses on environmentally friendly ways to remodel homes at its two locations in Dallas and Austin. Customers get their nuts and bolts from the store, but the real emphasis central to TreeHouse's mission is educating customers and helping them bring their projects to life.
It's part of what Ballard told CNBC was TreeHouse's "end-to-end" business approach. The company offers mostly free classes about solar power, composting, vertical farming and other ways to live more eco-friendly. TreeHouse also ensures that customers can see their projects through by hiring a team of employees who are experienced in their field.
Ballard is something of an evangelist for clean energy, and said TreeHouse's model fits well in a world that's warming to renewables.
"The big number that keeps me up at night is 100 million, the number of homes in America," Ballard said.
"Every single one of them needs to be running on renewable energy and needs a meaningful detox for the health and good of the people. I don't think we have 100 years to figure this out."
Before TreeHouse opened its first store in Austin, Texas in 2011, Ballard had to raise funding for a brick-and-mortar home improvement store — during a time when the retail sector was reeling from the housing crisis.
During at least two years of fundraising, "we got laughed out from a good number of those meetings," Ballard said.
However, he focused on participation among customers, and its eco-friendly mission attracted big names like Garrett Boone, the co-founder of the Container Store; former FedEx CEO Gary Kusin and ex-Valero Energy chief Greg King.
Carol Roth, a business strategist and CNBC contributor, said business strategies that focus on experience like TreeHouse are crucial to success nowadays.
"Customers need to have a reason to go to a store. What I like about TreeHouse is that not only have they embraced that concept, but they are also focused around mission and community," Roth said. "Building a community and tying that in with experiences, like the classes and demonstrations that they offer, is a solid strategy to create customer loyalty."
The industry is being shaken by the relentless transition to online sales. However, TreeHouse has raised $25 million in funding to date, cites explosive growth of 300 percent in the past 4 years, and is on track to expand its footprint.
With the home-building sector engaged in what the Home Improvement Research Institute recently noted was a broad inventory drawdown, Ballard told CNBC that the industry is in the midst of big changes that TreeHouse is moving to build on.
"The days of retail as a warehouse full of products are quickly coming to an end," the CEO said. "Retail has to become a place for products plus experience, education, consultation, installation. We re-imagined our store not just as a warehouse full of products, but as a ground zero for the journey of home improvement."