Forbes: 4 Retail Trends and What They Mean for Branches

While some semblance of normalcy is incoming, the impact of the pandemic is still very much a reality.

As it relates to retail branching, the early days of the pandemic seemed to have three primary predictions:

1. The Branch is Dead
2. The Branch Will Come Back Stronger
3. The Branch Will Change

Like most things in life, level-headedness has prevailed. With a good bit of recent history now behind us, the right answer here seems to be point #3. The branch will change due to the pandemic. Let’s be honest, though, the branch was already changing and will continue to do so regardless.

Forbes, who does a great job of keeping the finger on the pulse of so many topics, recently published an article called “Four Trends Reshaping The Future of Retail.” They talk evolving trends greatly impacted by the pandemic. Here, we will highlight those four trends, but look at it through the lens of retail banking and what it means for your organization.

#1 – Buy Online, Pick Up In-Store & Curbside Pickup Remain Popular

#2 – Retail Stores Have Become Fulfillment Centers

#3 – Free-Standing Stores Continue to Proliferate

In General Retail Terms – Free-standing stores, compared to their mall or shopping center based brethren have seen better store-over-store sales. The reason for this is directly related to the pandemic, with consumers choosing the larger overall footprint of these given stores, and not having to deal with the confines of a crowded shopping complex.

In Retail Branching Terms – At LEVEL5, we have a robust Market Analysis division, that has a very strong reputation for running 10-year proformas on different branch types. Without fail, our models always show better sales and faster ROI with a freestanding branch. Regardless of our models, the other primary takeaway here is that you should think of your Branch Strategy in the terms of Branch Optimization. Make sure any individual branch of yours is giving you the best return. The upside to a freestanding branch will nearly always outweigh any storefront branch.

#4 – In-Store Health and Safety Measures Remain Paramount

So much press in our industry trades was given to Digital Transformation and Branch related obituaries. Let’s be honest, though, most are click-bait. There are kernels of truth sprinkled about, but it leaves us to sift through the noise to find the relevancy.

Yes, Digital Transformation is a real thing. If your digital platforms are at least not on par, you have some catching up to do.

No, the branch is not dead. It simply needs to continue to evolve.

The main takeaway here is Omni-Channel. The digital world and retail world can have mutually exclusive strategies. If there aren’t cross-over and intertwined components, you’ll be left behind your competition. More importantly, you won’t be delivering a modern experience for your customers or members.