In the face of what is now known as the ‘retail apocalypse’, brands are seemingly confronted with two options– fight or flight. Brands can choose to either adapt to the ever evolving economic and consumer landscapes, or be faced with a similar fate that 50 US retailers were in 2017.
Financial institutions, however, are dealing with a horse of a slightly different color. While dealing with the aforementioned shifts in the retail landscape, the financial industry isn’t known for being nearly as quick to respond as their retail counterparts. In fact, in the US alone, nearly 1,700 branches closed from June 2016 to June 2017.
With the biggest decline in branch closings on record bearing down, banks should consider taking a hard look to retailers who have successfully adapted to in the face of economic adversity.
Thinking Like Retailers
Seemingly the shining store on a hill, Apple continues to open retail locations in suburbs and metropolitan areas alike. Their stores are ostensibly always packed, due in part to the introduction of their events series, ‘Today at Apple’. These memorable experiences consist of focused educational engagement in areas like photography, illustration and web development. Almost more important, is the fact that they do this without the inclusion of a sales component. So how could this benefit a bank? It’s not difficult to imagine the benefits of a similar experience at a local bank; attending a class on managing your income or saving for retirement. In fact, according to the figures in our 2018 Modern Banking Research report, a meager 11% of people across the US and UK have been invited to a bank’s event, yet over 60% said they would attend if invited. This offers a huge opportunity for banks to re-design their in-store experiences to deliver meaningful educational events to improve the overall customer and brand experience.
Retail and eCommerce leader, Amazon, opened the first checkout-free store this year to an unsurprising global fanfare. The shared excitement about not waiting in line was palpable, and the move is paying off, as Amazon is already planning on expanding the concept to six additional locations in 2018. In a similar vein, Oriental Bank, one of the largest financial services provider in Puerto Rico, applied a similar approach to streamlined customer service by offering online and offline appointment scheduling to customers in advance of their visit to a brick-and-mortar location, which resulted in an 80% decrease in branch waiting times. Unfortunately, not everyone has “Just Walk Out Technology” at their fingertips, given the specific application it draws, the advanced system it is and high price tag it wields. However, appointment scheduling is an accessible and cost effective way to achieve a similar level of customer engagement. In fact, our research showed that 59% of respondents would be more likely to visit their local branches if they had a chance to pre-book appointments with expert staff.
Bonobos, the NYC-born, men’s fashion digital native, blazed trails in retail when they opened stock-free “guideshops”. These stores not only allowed shoppers to try on products before making purchases, but also provided personalized, expert advice on the fit from their trained staff. Providing valuable knowledge to customers is also the route Sberbank, Russia’s largest banking and financial services company, took when investing in their award winning ‘Tips’ tool. Tips is an AI-based assistant providing what the name suggests to change financial habits of its customers for the better and “save them money, time and effort.”
A Brighter Tomorrow
While it's no secret retailers try endless strategies to stay afloat, the ones who understand where to place their efforts continue to survive, grow and expand their customer advocacy. By applying similar strategies, financial institutions will be able to continue providing meaningful benefits to their customers and communities, with a hopeful shift in the dials to expansion mode.
To learn more about how banks can adapt to the latest industry trends, join us on June 12th, 11 AM EST / 4 PM BST, when we present the rest of our findings from our 2018 Modern Banking Research Report in a live webinar. You can register for the webinar here. See you there!