Ask An Expert

Sean Keathley discusses how to create connections through branch conversions

After a COVID slowdown in banking mergers and acquisitions, we’re now in the midst of a predicted a resurgence of M&A activity in 2021. But it's once the deal is done, that the real work begins. In this Ask an Expert, Sean Keathley discusses converting branches to the new post-merger brand. With the exterior of the branch as your beacon and the interior as your experience, branch conversion is a rich opportunity to drive acquisition, deepen customer connections, and solidify and grow relationships. Learn the principles and practices in branch conversion that help banks master all the complexity.

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Outside View

Exterior of CVS consumer building

How consumer-facing brands like Ulta, Nike, CVS and Ikea are revamping their retail strategies and leveraging location to meet demand for in-store shopping experiences

CVS recently announced it would be shuttering 900 stores – or 10% of its retail network – due to shifting “consumer buying patterns.” On its face, it may seem like closures signal business contraction for the drugstore giant, but digging deeper, a different pattern emerges. Along with rightsizing its network to address overlapping footprints, “CVS also has been revamping its retail strategy” with “three distinct models: locations that offer primary care services; ‘HealthHub’ stores” with onsite healthcare and “traditional stores,” according to reporting on CVS corporate moves. At the same time, the company is investing in the human side of its business – transferring rather than downsizing staff and raising minimum pay.

Addressing these recent changes, WSJ reports CVS has been “evaluating changes in population, consumer buying patterns and future health needs to ensure it has the right kinds of stores in the right locations for consumers and for the business.” As CVS retools retail, consumers have made it clear they want new in-store experiences and expanded omnichannel options for shoppers, according to reporting on retail brand CX. Forbes describes current trends as a “reversal of fortune” for brick and mortar with Amazon, Kohls and others opening additional storefront retail. “Both online and physical retailers have been embarking on hybrid ventures to attract cross-sections of the consumer population.”

But what does data say about what consumers want? New research from Kearney Consumer Institute finds that four generations of U.S. and Canadian consumers actively seek out in-store shopping – surprisingly, most especially Gen Z. The survey found 81% of Zoomers like to “purchase products in-store” with 74% of this young generation’s shoppers saying a “well-curated store experience” help create the appeal. Seen as a way for them to disconnect from digital, brick and mortar stores offer a respite from the always-on world of these digital natives and an opportunity for retail brands to deepen their relationships with them.

Other retail brands are responding with their own unique approaches. Ulta Beauty is using brick and mortar for growth, planning 50 new store openings per year of its curated beauty bar experience. At the same time, Nike is piloting small store formats focused on personalization while it deepens its relationship with Dicks Sporting Goods for a more connected shopping experience fusing the best of digital and in-store. Finally, Ikea begins rolling out its smaller planning studio store concepts after creating big buzz in the home goods sector. These new retail strategies positively position brands in the minds of consumers, crafting meaningful experiences that meet consumers where they are.

For more information on ways for banks and credit unions to the most of retail banking formats and leverage location for more connection and growth, stay tuned to Believe in Banking as it looks at influencers in related industries and tracks the big trends in financial services. You can also contact us at info@adrenalineagency.com.

How consumer-facing brands like Ulta, Nike, CVS and Ikea are revamping their retail strategies and leveraging location to meet demand for in-store shopping experiences

CVS recently announced it would be shuttering 900 stores – or 10% of its retail network – due to shifting “consumer buying patterns.” On its face, it may seem like closures signal business contraction for the drugstore giant, but digging deeper, a different pattern emerges. Along with rightsizing its network to address overlapping footprints, “CVS also has been revamping its retail strategy” with “three distinct models: locations that offer primary care services; ‘HealthHub’ stores” with onsite healthcare and “traditional stores,” according to reporting on CVS corporate moves. At the same time, the company is investing in the human side of its business – transferring rather than downsizing staff and raising minimum pay.

Addressing these recent changes, WSJ reports CVS has been “evaluating changes in population, consumer buying patterns and future health needs to ensure it has the right kinds of stores in the right locations for consumers and for the business.” As CVS retools retail, consumers have made it clear they want new in-store experiences and expanded omnichannel options for shoppers, according to reporting on retail brand CX. Forbes describes current trends as a “reversal of fortune” for brick and mortar with Amazon, Kohls and others opening additional storefront retail. “Both online and physical retailers have been embarking on hybrid ventures to attract cross-sections of the consumer population.”

But what does data say about what consumers want? New research from Kearney Consumer Institute finds that four generations of U.S. and Canadian consumers actively seek out in-store shopping – surprisingly, most especially Gen Z. The survey found 81% of Zoomers like to “purchase products in-store” with 74% of this young generation’s shoppers saying a “well-curated store experience” help create the appeal. Seen as a way for them to disconnect from digital, brick and mortar stores offer a respite from the always-on world of these digital natives and an opportunity for retail brands to deepen their relationships with them.

Other retail brands are responding with their own unique approaches. Ulta Beauty is using brick and mortar for growth, planning 50 new store openings per year of its curated beauty bar experience. At the same time, Nike is piloting small store formats focused on personalization while it deepens its relationship with Dicks Sporting Goods for a more connected shopping experience fusing the best of digital and in-store. Finally, Ikea begins rolling out its smaller planning studio store concepts after creating big buzz in the home goods sector. These new retail strategies positively position brands in the minds of consumers, crafting meaningful experiences that meet consumers where they are.

For more information on ways for banks and credit unions to the most of retail banking formats and leverage location for more connection and growth, stay tuned to Believe in Banking as it looks at influencers in related industries and tracks the big trends in financial services. You can also contact us at info@adrenalineagency.com.

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Data You Can Use

0 %*
*Percentage of Gen Z customers who would be more likely to visit a branch offering in-person financial advisory services
Data

The Story: Brick-and-mortar retail stores are evolving. With the vast adoption of e-commerce, stores with the highest foot traffic are the ones that offer compelling new experiences to customers. That’s why many brands are delving deeper into experiential retail – physical stores that offer experiences beyond browsing and buying products. This new approach merges the digital and physical worlds into a seamless omnichannel experience that delights and excites modern consumers.

The Takeaway: So, how does this affect banking? When it comes to financial institutions, we know that 79% of banking customers visit a retail branch at least once a year – with 40% of Gen Z respondents reporting monthly in-person visits. However, those visits are predicated on branches delivering real value through good experiences. Gen Z respondents said they would be more likely to visit their bank branch if they offered:

  • A Community Hub (38%)
  • Financial Education Services (40%)
  • Financial Experience Center (43%)

Further, 30% of Gen Z customers said that having a physical branch became more important to them over the past year – during the pandemic, no less. In order to provide the personal interaction piece of the experience puzzle, traditional FIs should take advantage of this opportunity to differentiate themselves by offering services consumers demand.

Source: EPAM Continuum, “Consumer Banking Report 2021,” October, 2021

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Best Community Banks

Best Community Banks to Work For in 2021

As the Independent Community Bankers of America (ICBA) ranks their top banks to work for, we look at what makes a great workplace

It’s no secret that happy employees make for better workplaces. As organizations of all sizes compete for talent amid the Great Resignation, good employee experience is the primary way banks are building a talented workforce. In community banking, a new ranking shows those efforts are bearing fruit.

Ask any community banker and they’ll say that it’s their people who make a difference. In fact, one of their most important commitments to their community is cultivating strong workplace culture – providing competitive salaries, first-class benefits and signature perks to make employees feel valued and important.

How each bank lives their purpose may be slightly different, but each of this year’s Best Banks to Work For demonstrate a commitment to creating exceptional work environments where their employees can thrive.  

Key Community Bank ($80 million) in Inver Grove Heights, MN

With a singular branch and 13 employees, Key Community Bank is an exemplar of community banking culture. As a tight-knit group, they value open communication among all employees and lean on transparency and employee empowerment to match people to jobs that play to their strengths. This paid off in dividends when the whole bank had to quickly navigate the Paycheck Protection Program.

First Federal Savings & Loan ($325 million) in Pascagoula, MI

In addition to fostering a strong sense of purpose in their business, First Federal Savings & Loan bank prides itself on developing the skills of all of its employees. This community bank encourages bankers to network with other bankers and attends professional development conferences, so the bank is always growing and retaining skilled talent.

Mauch Chunk Trust Co. ($578 million) in Jim Thorpe, PA

Mauch Chunk checks all the boxes; in addition to cultivating a positive work environment and supporting their community, they have a strong communications culture, leveraging social media channels on Facebook, Twitter, Instagram and LinkedIn to engage with their customers and communities. Not only are they posting about community service and charity donations, but they also prioritize financial literacy and education and customer safety and security.

Community National Bank & Trust of Texas ($968 million) in Corsicana, TX

Another strong communicator via social media, Community National Bank & Trust of Texas uses all of their channels, but especially YouTube exceptionally well. Their video channel spotlights helpful, instructional content that teaches people how to use digital banking features like mobile deposit and online funds transfer and even included a very timely video on how to navigate the Paycheck Protection Program in April of 2020.

First State Bank ($1.5 billion) in Gainesville, TX

First State Bank has probably done the most to invest in their employees and the community – with literal capital! During the Great Recession in 2008, they provided employees a “summer fun package”– a $150 monthly stipend for four months – to ease the financial burden during difficult economic times.  In the earliest days of the pandemic shutdowns and during the long hours of PPP processing, the bank ordered meals for all 300 employees from local restaurants – which also provided much-needed income to those local businesses.

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Do you need short-term help reopening your branches? Find out about post-COVID branch readiness solutions that can help, or email covidready@adrenalineagency.com.

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