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There has been a lot written about the demise of the financial branch system. This article is not going to be more of the same.

The branch isn’t dying, but it needs to be re-purposed in line with consumers’ overall attitude toward the entire retail experience and the death of branch transaction activity. Retail bank marketing plans need to be reassessed in line with these realities.

The Changing Face of Retail

The face of retail was nearly single-handedly transformed by Amazon. Amazon is a distributor. They don’t manufacture much, but they sure move a lot of other company’s merchandise. Now that they have built a distribution system to deliver everything from Ab Rollers to Zero Gravity Chairs, they are setting their sights on the core of our basic needs — food.

Their most recent acquisition of Whole Foods is another reminder that the rules of old are disappearing….quickly. I don’t believe they bought Whole Foods to get into the retail business per se. They purchased Whole Foods to get even deeper into the distribution business.

Whole Foods will provide Amazon with additional systems and locations to allow “hyper-local” distribution of perishables foodstuffs and every other food imaginable. Think of it as free warehousing space being covered by their existing retail model.

Now that your favorite products from Whole Foods can be delivered to you the same day, do you really want to spend time, money and opportunity food shopping? You’ll likely be shopping less.

Hence it is with the challenges for all retailers. Once we make products and services widely available with minimal effort, the consumer becomes accustomed to the new expectation for everything. And that expectation is going to extend to ALL experiences, from pizza restaurants to the corner bank. It already has.


Surviving in Retail Requires Change

To survive as a retailer in today’s environment demands a change. In our upscale community of Orange County California, malls are struggling. Major retail chains like Radio Shack are just a memory.  The middle market stores like Sears, JC Penney and Macy’s are in crisis. The high-end stores with exclusive products and high service philosophies, like Nordstrom’s, are holding on.

The Irvine Spectrum Mall, on the other hand, is thriving. It’s so busy on the weekends that parking is scarce. Why is it thriving while others are closing?

Shopping at the Spectrum is an experience.

People want to go to the Spectrum to shop.

According to Joel Kotkin, R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University, the new retail model will consist of more experiential services, services that can’t be duplicated online. For instance:

  • One of a kind artisan shops
  • Educational stores
  • Farmer’s markets
  • Eclectic clothing stores and the like.

That means retailers will need to differentiate both the buying experiences (the act of shopping) AND the product experience (the quality and uniqueness of the product and its respective benefits).  

If Fintech, as a category of digital financial alternatives, is the Amazon of the financial world, how does the smaller regional institution compete? Once consumers experience the advantages of online banking services, including online account opening, hassle free and application free lending and the transparency of information and speed/efficiency of these new digital services they’ll never settle for anything less. This is our reality today.


Transform the Financial Institution into the Place for Experiences

Adopting Fintech solution products allows the financial institution the chance to move the transaction-based activity into cyberspace: Automated Account Opening; Lending Automation and Pre-approved Lending Campaigns; and of course, Online Banking. With transaction activities being handled by more of these tools, the institution can focus on taking care of the financial health of the consumer.

Training front line staff to become true consultants and making every interaction an insightful and worthwhile experience to the consumer is the strategy. The tactics are many: increasing the activity surrounding financial seminars such as new home buying, basic budgeting, retirement planning, buying your first car…the list is endless.

Since almost everything we do as a consumer involves some form of financial transaction, financial institutions have the license to help in all areas. They can truly change lives.

Maybe they’ll even conduct a seminar on how to save money shopping on Amazon!