Banks as stores

Walking along East 49th Street in New York these days you come across a fairly new retail concept from ING Direct Bank. A hybrid bank branch, coffee shop, meeting place.

According to the guys in this store, the bank now has 5 such outlets that combine a coffee shop within the bank environment.

While that concept is nothing new (Abbey in the UK has had Costa Coffee shops in it’s branches for sometime) it struck us as interesting for two reasons:

1) Because it is from a direct banking brand, which by previous definitions meant not having a retail presence.

2) For the staff and the environment.  The staff call themselves bankaristas, and they were what you would expect from a high end coffee shop.  Not necessarily what you would expect from a bank.  They can sell you a latte and a loan, a shot of espresso and a savings account. They were bright, energetic, clearly having fun and very engaging. 

From a link at the American Library Association (ALA), we found a post and overview of a similar store near their headquarters in Chicago.  In the Chicago store you can find:

- Full coffee/espresso drink menu, a decent variety of pastries, prepackaged sandwiches, and juices, all at low prices
- Staff equally trained in pulling espresso and helping you with your on-line banking
- A seminar room that’s free for public use (by reservation) when not occupied by the occasional ING presentation
- Free wireless
- 10 terminals
- Free newspapers and financial magazines for use on site
- 6 flat-screen TVs (all on CNN, all muted)
- Branded merchandise (duffel bags, computer bags, portfolios, travel mugs, etc.) and a few financial tools (books, mechanical savings bank for kids) for sale
- Strong return visit incentive: buy four coffee drinks and the fifth is free

One of the points the ALA makes is that the store could be mistaken for a library (and we're big fans of library's here at Integer)

The guys in NY we spoke to let on that their store is doing very well in attracting new deposits and bank business was brisk.  You could see why.  It was inviting, welcoming and useful from a shopper point of view.  If I lived in NY and were I to be shopping around for a savings account I’d have opened one there and then. I will also be telling everyone about it simply because it is cool.

In addition to the space as a coffee shop, meeting place, bank, they were also retailing ING branded merchandise (much of it linked to their F1 sponsorship).  This was discretely merchandised and a nice additional use of the retail space. 

They’re also using promotions to good effect  As well as the five for four given in the Chicago store, when you make a deposit into your savings account you receive a free brew of your choice.  Great use of incentives to keep you coming back regularly and maintaining good financial habits. And the place was buzzing. 

We thought it was a nice disruption in the category that provides real value to customers and shoppers alike in the urban environment.

What will the next such innovation in the category be? 

Will we see more embracing of cross-over retail environments from this category? 

Who will be first to really capitalize on the retail footprint of a bank network and converge the offering with something of equal or greater value to shoppers? Or apply other retail principles?

And do you see this going on anywhere else in the world?