It’s official: UNCB’s ‘Gold Cafés’ are gone
December 18, 2008
Since April 2006, Union National Community Bank’s Gold Cafés were heralded widely around the financial industry as a fresh innovation in BRANCH DESIGN. The concept was a revolutionary combination: one part bank branch, one part upscale, fully-functioning café. There were espresso drinks, smoothies, menus, patio seating, checking accounts, loans, and even “financial baristas.”
The Financial Brand made some inquiries with UNCB about the status of Gold Cafés after Market Insights Insider ran an article suggesting UNCB’s cafés may be closed. Well, now it’s official. After little more than two years into its Gold Café experiment, the bank has reverted back to a more traditional branch environment.
In an official statement, the bank says, “the focus needed to shift back to community banking from full-service retail coffee operations. The decision was made to eliminate the café service and continue to provide community meeting space.”
The branches will continue to offer free Wi-Fi and 7-day banking. You can still get coffee. Drip. Regular or decaf.
UNCB’s reversal could be construed as a referendum on the branch + café concept, a design approach that had gained some popularity in the first half of the decade. Branch designs from Umpqua Bank and ING Direct seemed to suggest financial institutions could transcend their boring caste by introducing experiences outside the banking world. Everyone wanted to be Starbucks.
The basic, overriding strategy aims to transform branches from banking centers into community hubs by making them warm, casual hangouts. You probably heard the retail maxim, “The longer they linger, the more they buy.”
Reality Check: Most people don’t want to hang out at the bank, no matter how cool it is. No matter how retail you make your branches, no matter how enjoyable the experience, the average consumer will never say, “Let’s go hang out at the bank.”
Shades of trouble with UNCB’s Gold Cafés were starting to show back in 2007, after Mark Gainer, CEO/UNCB, had some time to look back and evaluate the concept’s performance.
“Banking is a very competitive but highly commoditized industry. We believed true differentiation was imperative for our successful growth.” — Michael Frey, President/UNCB
“I think we’re going to take a pause here for a while and grow these before we look into other markets,” he said. “There is a little bit of confusion; Is it a coffee shop or is it a bank?”
This is precisely the problem Jim Bruene, publisher of Netbanker, saw in the concept. “One of the biggest reasons to build branches is for their advertising value — placing the bank’s brand in front of thousands of commuters and errand-runners each day.”
“By calling it the Gold Café, UNCB lost the normal branding value,” Bruene noted.
Union National Community Bank serves residents of Lancaster County, Pennsylvania and maintains assets exceeding $477 million.
Key Takeaways:
- Just because UNCB’s Gold Cafés failed and Chase is throwing out WaMu’s Occasio branches does not mean you can go on building the same old, boring branches — just like you have for the last 20 years.
- Branches are a critical brand-building tool for financial institutions.
- Branding requires relevant differentiation. You need to create a unique experience, but you also need to stay focused on your core purpose: banking (i.e., not coffee).
“Financial Baristas”
Employees served as dual employees of the bank and the coffee operation — as experts on bank products and the preparation of espresso beverages, was the bank getting two jobs for the price of one?
The interior space reflects something far from a traditional bank. The walls are painted in warm colors. Exposed ceilings, exposed brick, concrete floors, a fireplace, sofas, chairs and coffee tables stacked with books.
The bank had a contemporary-looking microsite supporting the cafes (left),
which was in stark contrast to the bank’s overall brand identity (right), as seen in the current website.
Share
Previous related stories from The Financial Brand:
- Passion papaya smoothies and 3-month CDs
- Green Branch® now a federally registered trademark
- An interactive virtural tour of BankWest’s cool branches
- Why Chase is killing WaMu’s retail concept
SPONSORED MESSAGE: Is your bank or credit union ready to go green with its branches? Watch this free webinar playback, “Green Is The New Black,” where the branch-building experts at Momentum outline the strategy, rationale, challenges, advantages and ROI of eco-friendly financial facilities. WATCH NOW
Filed Under: Branches
Tags: coffee, Gold Cafe, Pennsylvania, UNCB, Union National Community Bank
December 18th, 2008 at 8:34 am
After my initial post about the possibility of Gold Cafes closing, I did have the opportunity to speak with Mark Gainer from UNCB. He assured me that the branch locations would not be closed – rather, the branches would be repositioned as ‘Gold Branches’ of UNCB. And to echo the point here, the look and feel of the branches will be preserved (with some modifications – namely the teller line replacing the coffee bar), and the bank will continue to offer the space as a community meeting place.
Additionally, there are a couple points we discussed that aren’t mentioned here. First, the fact that Lancaster County is rather conservative – and many people in the community were confused by the cafe concept. Some thought it was a full-service cafe, and were disappointed when they realized otherwise. Couple this with the recent economic shifts, especially with people cutting back spending (we’ve all heard about how much we could save by simply not spending $3/day on coffee), and we can see how the cafe-concept branch really wasn’t aligned with the needs and preferences of the market.
Getting back to Jim Bruene’s point about the branch serving to reinforce the brand, it will be interesting to see if the Gold Cafe branches are outfitted with signage that features the UNCB name more prominently. And with these branches continuing to serve drip coffee, to see if this will also be offered at other UNCB branches.
At the end of the day, this is a great example of a bank’s marketing and brand initiatives simply not aligning with its market opportunities. And, as we continue to see banks pursuing copy-cat tactics to mimic the likes of Umpqua Bank and ING Cafes, the UNCB Gold Cafe example really supports that point.
December 18th, 2008 at 9:24 am
Why do we need branches anyway? One of the top CUs in the country is totally “branchless” and doing just fine, in fact, better than fine. Pennsylvania State Employees Credit Union (PSECU—350,000 members) is “basically a virtual credit union” (to quote CEO Greg Smith in a Dec. 15th article in CU Journal). And their auto loan biz is up by $70 million since January!
December 23rd, 2008 at 7:10 pm
I think the key point here is what you mentioned in your third key takeaway bullet: RELEVANCE. To me, this was a perfect example of gratuitous branch bling, with little if any relevance to the bank’s brand. I feel like these banks look at Umpqua Bank and ING and try to find the secret bullet…which eventually leads them to say “duh, it’s the coffee cafe!” But it’s totally irrelevant to not only their brand, but their whole business strategy. I can tell you from experience that it works at Umpqua Bank because the entire business strategy–not just the cosmetic marketing–is built around being a retail organization. Everything about the business model, the procedures, the training, the environment, etc. To use my lingo, everything is built to prove the retail story. In all fairness I have not experienced the UNCB brand and do not know them at all, but this looks to me like a very clear case of a bank trying to cosmetically imitate a perceived silver bullet with marketing, rather than changing the entire way the bank operates to fit a whole new paradigm. Surface level changes don’t work. Changing your clothes doesn’t change who you are…it just changes how you look for a while.
A similar situation can be found at First Independent Bank of Nevada’s (http://www.firstindependentnv.com) total and unbelievable hackjob of some of Umpqua Bank’s marketing. The imitation is uncanny (not to mention very poorly done), and I can barely believe there’s not an intellectual property lawsuit going on about it.
June 18th, 2009 at 4:22 am
[...] Not long ago, UNCB tried a similar approach with its Gold Cafe’s in 2006, but retrenched after realizing their design was too much like a café, something that bewildered and confused customers. Considering how Reliant has executed its smoothie strategy — only 10% of the floor plan is dedicated to the smoothie operation — it’s unlikely they’ll encounter the same issues as UNCB. [...]
August 25th, 2010 at 2:58 pm
[...] Reality Checks: Branches aren’t hangouts, and they never will be. Consumers generally have no interest in hanging out in banks. Almost every financial institution that has explored this strategy has found that it doesn’t work. [...]