Forbes: 4 Retail Trends and What They Mean for Branches

Jul 13, 2021Industry Insights

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:

The Branch is Dead
The Branch Will Come Back Stronger
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

In General Retail Terms – The main takeaway here from the Forbes article is the concept of “Omni-channel.” What you can begin with online has either a hand-off or direct correlation to what happens in-store (or vice-versa). This still has great relevance to any community bank or credit union. These services were available to most retailers prior to the pandemic, but really came into their own when many stores were closed and while customers eased their way back to “normal.”

In Retail Branching Terms – Omni-channel servicing is not a new concept to retail banking. For an industry that is hard to change its ways, however, looking at product and services in a seamless, intertwined fashion between the online and offline must become part of any strategy going forward. We predicted long ago the rise of “curbside banking” and have now seen a post-pandemic bump in the drive-through. The branch is becoming less transaction and more advisory. Blending what can be learned or discovered online, then delivered and/or advised upon in-branch is key.

#2 – Retail Stores Have Become Fulfillment Centers

In General Retail Terms – Some retail stores had to reinvent themselves as fulfillment or distribution centers when doors were shut and/or foot traffic tailed off. This is a direct result of point #1 above, especially as it relates to in-store pickup and/or curbside.

In Retail Branching Terms – The translation here for community banks and credit unions is not so much as “fulfillment centers” to sell your widgets. You must understand that the majority of folks who come into the branch to open an account very likely began their “shopping” experience for your products and services online. They probably looked into your credit card offerings and got an understanding of the different flavors and narrowed down the choices. They might have even determined the winner. When it came time to open, though, they decided to come into the branch to open the winner. They wanted that personal touch

#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

In General Retail Terms – Retailers, through and through, want you back in the store. Health and safety are paramount. This is marketed widely, both through advertising media, but also in-store. Retailers are glad you’re back and want you to feel safe while shopping.

In Retail Branching Terms – Welcoming customers or members back to the branch is no different than any other shopper type. Branches across the country have gone through great lengths to put up plastic guards, hand sanitization stations, social distances markers, alternating chairs, and more. While masks are becoming a thing of the past, a bottle of Purell only goes so far. LEVEL5 has created the Re-FI Design Program, which was developed to specifically help community banks and credit unions address the issues related to the pandemic beyond simple triage measures.

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.

Forbes: 4 Retail Trends and What They Mean for Branches

#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

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

Related Articles

Peter Pan Was A Bad CEO

Don’t Let Your Data Go to Waste: Maximizing Growth Opportunities in Credit Union and Community Banking

3 Retail Stores That Began As Online Only Companies