The Branch As Retail Store – Concept is Not for Everyone

By Jon Haller
Director of Market Research
Credit Union National Association

After several years of efforts to transition consumers away from their reliance on the branch office over to remote-banking channels, the nation’s financial institutions have essentially come full circle. Construction of brick and mortar branches has picked up its pace. This is especially true among credit unions, many of which have recently acquired community charters and are building locations to serve and attract residents in their new fields of membership.

Perhaps the branch strategy attracting the most trade-media attention is the growing practice of designing branches to accommodate a retail and sales environment – with enhanced customer experiences and increased cross-selling opportunities the goals. Many of these facilities come complete with "meetergreeters" (staff who meet customers at the door), Internet cafes, kids’ play areas, TV monitors featuring news and business headlines, and coffee bars.

But while the "branch location as sales outlet" approach appeals to many consumers, it clearly is not everybody’s cup of tea. According to a recent Brickstream Corporation study, "The Value of Delivering a Better Branch Experience," and as highlighted in CUNA’s upcoming 2005/2006 Credit Union Environmental Scan, the vast majority of consumers do not consider the above types of "amenities" important (see graph).

Moreover, the study goes on to state that just 4% of customers say that the existence of such amenities is enough to persuade them to switch financial providers.

Rather, the study concludes that the majority of customers "want to be able to enter, complete a transaction, and exit the branch as quickly as possible and without confusion (as to where to go in the branch to obtain service)."

If you are exploring the possibility of building a new branch with a more retail/sales- oriented environment or transforming an existing office, you may want to first obtain member and/or potential member feedback regarding their interest in, or the importance of, the various features you are considering, to establish whether this path is the right one for your credit union and your members.

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