The Home Depot, the largest home improvement retailer in the United States, recognized the need for an innovative, efficient, and sustainable approach to their store rollouts nationwide after a decade of construction dormancy. The company sought a partnership with a firm that would not only elevate the customer experience in their stores but design and manage a rollout program tailored to save the brand money and time as it continued to grow.

Tackling Retail Expansion with Data-Driven Design

It faced the challenge of overhauling and transforming its development program to build new stores quickly and efficiently while also easing the burden on its administration staff.

Together in its new strategic partnership with MG2, which provides the brand expertise in cost management, entitlements, and full-scale program design and delivery services, the companies aimed to reduce The Home Depot’s new build construction schedule by 30%, as well as achieve a number of other goals including determining the right construction methods, implementing sustainable solutions, and appealing to communities and jurisdictions alike.

Using Data Analysis To Guide Construction Methodologies

To determine the most suitable construction method and location for The Home Depot’s new stores, MG2 conducted a series of data-driven site analyses comparing pre-engineered metal buildings (PEMBs) against concrete tilt-ups. These analyses, which took into account and outlined each option’s proven advantages and potential volatilities, revealed significant benefits in choosing Houston, TX, as its new location and supported the brand’s decision to invest in a PEMB for its warehouse.

Streamlining Designs for Efficiency and Innovation

With a data-driven road map established, designers at MG2 began by creating and validating an in-depth prototype. Through this process, the team confirmed the potential to transform and streamline The Home Depot’s development and build process. With MG2’s holistic approach, the home improvement leader has been able to remain virtually hands-off, overseeing the projects from a high-level perspective without handling the day-to-day tasks.

As the partnership continues to grow, MG2 continuously targets efficiencies to deliver a greater return on investment for The Home Depot. Beyond cost and speed-to-market optimizations, the resulting store designs offered customers a cleaner, friendlier, and lighter interior experience. Updated wayfinding and educational initiatives further empowered The Home Depot’s clientele in their home improvement endeavors.

Cost Savings and Elevated Experiences through Data-Driven Decisions

MG2’s data-driven site analyses played a crucial role in The Home Depot’s decision to invest in a pre-engineered metal building (PEMB) for their new Houston, Texas location and will continue to play an important part in determining the locations and construction methodologies of future stores. Despite initial higher material costs, the accelerated construction schedule of the PEMB warehouse led to overall savings of 0.7% to 3.2% for the year. In addition to its sustainability benefits—which appeal particularly to urban jurisdictions—the PEMB offers numerous advantages, including:

1. A faster construction schedule: 130 days, compared to 190 days for a concrete building.
2. Better insulation: An R-value of 21.6, compared to 17.3 for a concrete structure.
3. Energy cost savings: 5% to 9% over a 60-year lifecycle, depending on the region.
4. Greater quality control: Unlike concrete, PEMBs can be erected in nearly any weather.
5. Smaller environmental footprint: Less maintenance and fewer repairs over time, with a more durable metal roof.

Shaping the Future of Home Improvement Retail

Leveraging combined expertise, MG2 and The Home Depot have effectively developed innovative, efficient, and cost-conscious solutions that align with the brand’s rollout objectives. The PEMB warehouse in Houston, Texas, showcases the partnership’s achievements and underscores the importance of data-driven program design in the evolution of retail spaces.

As the collaboration continues, both companies aim to further transform the home improvement retail landscape, providing enhanced value and experiences to customers across the nation.

When industry leader Costco Wholesale sought expansion overseas, there were numerous nuanced considerations—culture, capacity, jurisdictional requirements, materials, cost, timeframes, structure variants, building codes, and beyond—that Costco needed to consider in order to ensure their debut in Asia would be an outright success. They employed long-time partner MG2 to help them tackle these challenges and provide a localized, reliable, inherently “Costco Wholesale” experience for new consumer bases across multiple countries.

Taking up residence in urban areas experiencing explosive population growth, real estate and structure footprint are major considerations with each Costco Wholesale designed and built in Asia. The employment of multilevel retail warehouses—a more common practice overseas than here in the United States—provide spatial solutions, but still require careful programming and custom resolutions that designers consider and tailor to each unique location.

While shopping at a wholesale retailer in the United States is unique unto itself, the experience can be different and novel in countries like Japan, China, Taiwan, and South Korea, where spending a day at Costco Wholesale can be a destination-worthy, family-wide event. Costco and MG2 teams diligently analyzed and documented the shopping habits of each location, accounting for variants like capacity control, cultural norms, and community preferences. Departments were designed to flex within the stores, catering to regional tastes, such as robust sushi departments in Japan.

With our breadth and depth of Costco project knowledge and working with the country managers through the decades, MG2 continuously delivers immediate solutions for ad-hoc challenges, such as adding new departments post-opening. Based on the unique design requirements for each location, our team has standardized each structure’s needs, working closely with Costco Wholesale operations on how they utilize their spaces. In addition to streamlining our process, MG2 has been able to control the soft cost which varies by country, ensuring no project goes over budget.

Our symbiotic relationship continues today, with our most recent projects utilizing breakthrough technology such as VR walkthroughs for executives to view floors before the opening of a new location. As Costco Wholesale’s expansion initiatives continue to grow across China and other regions, MG2’s designs continue to push boundaries and revolutionize the wholesale shopping experience in Asia.

Over 30 years ago, our partnership with Costco Wholesale began with one warehouse. At the time, the wholesale leader was putting down roots in rural and suburban communities, where space was ample. However, as the brand gained popularity and expanded its reach into urban neighborhoods, development became more challenging with greater constraints. Simultaneously, Costco Wholesale boldly began to broaden its offering, with services such as optical and hearing centers, pharmacy, gas stations, and fresh, high-quality meat, deli, and seafood selections. As jurisdictional codes became more complex and demanding, creative design solutions were required. A dedicated partner—one who understood their goals, embraced their values, and sought to grow with them—was needed. They went all-in on MG2.

Three decades and 780+ locations worldwide later, MG2 remains that partner today. Our relationship has grown and strengthened, both personally and professionally. We have worked together to streamline organizational efficiencies in building design and delivery, cost management, entitlement services, built asset management, and program management. MG2 anticipates Costco Wholesale’s needs, evolving alongside, and elevating the speed and consistency of our results over time.

With MG2 as their program partner, Costco Wholesale has set the bar by creating and maintaining the platinum standard in optimized rollouts: It takes just 110 days from the time construction begins to the moment doors open to their members. Their “high quality, best price” approach toward building design—also reflected in their products and customer services—is an inherent part of Costco Wholesale’s brand promise. 

MG2 evolves the Costco Wholesale warehouse prototype every month, finding innovative ways to update and improve the concept while upholding our swift construction schedule and high-quality standards.

Our relationship goes beyond the depth of resources and broadness of services MG2 provides; there’s a consensus-driven approach across a joint team that keeps the proverbial ship moving forward. We work together to create modern, industrial retail environments that are contemporary, clean, safe, and never compromise Costco Wholesale’s standard of delivering quality. We’ve tackled countless new challenges together, leaning into the seemingly impossible to come up with solutions foundationally based on our co-journey. 

And along the way, we’ve optimized Costco Wholesale’s program to the business benefit of millions of dollars per year, while continuing to help them grow and expand to new consumer markets across the globe.