The ever-changing retail environment is seeing a significant shift from product-based stores to immersive, brand-building experiences.
This is visible all over the world, but one of the latest and best examples can be seen at Samsung KX. This 2,150 square foot space offers guests a range of experiences, events and skill-sharing workshops curated in partnership with several community groups. Visitors can’t actually purchase products in the store, as there aren’t any registers or price tags. Instead, Samsung introduces a one-of-a-kind brand experience.
The whole premise of Samsung KX centers around people’s lives, showing how technology can enrich real life activities rather than compete with them — a truly holistic approach.
The reasons the big brands are revising their retail strategies are obvious. Consumers are increasingly browsing and buying online, resulting in less traffic and reduced branch sales. Faced with this reality, brands can either reduce costs, by shutting stores and concentrating on digital, or embrace change and revise the fundamental role of physical spaces.
The context to this decision making is that digital brands with a physical presence grow eight times more quickly, so the use of retail space becomes an important ingredient within the mix. Amazon’s push into the physical channel came precisely because they appreciate that the future sweet spot is a blend between physical and digital, where all touchpoints support each other and understand what role they play.
Financial Institutions Must Understand Consumers’ Lives
Direct parallels can be drawn between these issues faced by retailers and those confronted by most banks and credit unions. Consumers are shifting to a digital-first mindset, yet they still have a huge desire for physical experiences, and this will never change. Humans love to spend time with each other. Faced with this reality, financial institutions, just like retailers, have a choice. First, they can follow most consultants’ advice and use digital to slash branch costs by reducing staff and branch size. This saves money but fails almost every other measure of success. The counterpoint to this choice is to redefine the role of physical spaces. Institutions going this way must fully understand how they can best support a digital first relationship.
Financial institutions can repurpose their real estate, turning branches into inspirational spaces that improve people’s lives through shared learning and collaboration. To adopt this position, banks and credit unions would need to move dramatically from focusing on selling to sitting confidently at the heart of their customer’s lives.
Financial brands’ great strength: Money pervades almost every aspect of life, and therefore a confident approach to money can achieve life-changing results.
Making such a change demands more than simply adopting sales techniques based on life events. What’s needed is a full appreciation of all aspects of a consumer’s lifestyle. People continue to search for trusted advisers who can help them navigate life’s many challenges; this opportunity has arisen due to poor political leadership and the fragmentation of traditional communities. There is definitely a vacuum within society that banks and credit unions could step into.
By understanding someone’s broader life and goals, financial institutions can help support them more effectively. This can put them back where they were 100 years ago — at the very center of local communities.
For financial institutions that feel confident to engage on a broader level, the opportunities are enormous. However, this shift must be made with commitment. The key is to value the interconnection of all aspects of people’s lives and the impact that one part can have on another. At I-AM we call this “Mind, Body and Soul.” We see no reason why banks can’t take an all-inclusive approach that includes all three.
The Strategic Relationship of Money, Life and Wellbeing
For anybody to feel confident with money they need to feel in control of their lives. Money worries are one of the primary contributors to mental stress. Left unchecked, these stresses can lead to physical illness. Hence the relationship between mental and physical wellbeing.
Financial institutions have a chance to lead the way in addressing mental wellness and stress caused by money issues head on. Seminars focusing on how to handle stress, one-to-one sessions dealing with real-life issues or talks from experts can all help create an environment where discussing mental wellness is OK.
Once any negative aspects of mind have been addressed there is also a great opportunity to help people get ahead in their lives by enriching their knowledge. Great education and information are key accelerators that can help people achieve their goals and financial institutions can support in delivering this knowledge. Whether it’s TED Talks, free podcasts from business experts or seminars by local entrepreneurs, bank branches can reclaim their status at the center of the community by becoming custodians of social learning.
These dynamic learning initiatives can help remove the stress from daily life and bring greater financial confidence to consumers. A natural extension of this position would also allow banks and credit unions to help satisfy the increasing demand for co-working spaces.
Why have your audiences been spending their time working at Starbucks or WeWork, when they could be engaging with your brand and meeting like-minded people in your spaces? By taking on these opportunities, we could gradually see these spaces take off.
At first glance the idea of financial institutions engaging with wellness programs and physical fitness seems ridiculous. It’s not as mad as some might think. The relationship between mind and body is intrinsic to wellbeing.
Institutions can choose to merge these two features into one seamless experience that capitalizes on the demand for fitness classes and exercise before or after work. From early morning yoga classes, quick spinning sessions at lunchtime or a workout in the evening. By creating environments that offer such facilities, financial institutions can far better serve their local communities and provide services that have significance to people.
The meeting of mind and body also delivers openings for talks on nutrition, cooking demonstrations or healthy eating seminars. The addition of these activities to a branch can turn under-used increasingly irrelevant spaces into a vibrant community hub.
Providing a Place to Air Out and Work Out Financial Qualms
Money matters still scare large parts of the population. The jargon, the fees, the regulations and the formality combine to create significant stress. Just talking about money is often difficult for many people.
How much do they earn, how much can they borrow, and how much do they owe? These are the stress points of today’s Millennials. Again, financial institution have a fundamental role to play in taking the stress out of banking and making people feel in-control about money. Helping people regain power over their finances and move to a place where they feel confident and more relaxed. Banks and credit unions already have many of the tools to deliver the rational aspects of this approach, conversely what’s missing are the more emotional aspects. That is why it is important to integrate emotional touchpoints through initiatives that can range from hosting local team events, awards ceremonies or even dance classes, again putting themselves at the center of local life in an honest, relevant way.
In my opinion, the next five years will see a clear diversification of retail bank branch design.
Many will follow the path of cost and footprint reduction through great technology. Some will also explore the potential for these more inspirational, immersive experiences. A few with real foresight will intelligently blend the best of both. Gone will be the teller counters, the queues and the 24-hour lobbies, to be replaced by stimulating, digitally enabled, immersive experiences valued by the whole community, a truly holistic bank experience that will advance your mind, improve your body and feed your soul.