Breaking Down the Walls

As credit unions and banks continually try to assess the optimal purpose and layout of future branches, Tesla and Apple have seemed to figure it out. Their solution: Retail spaces aren’t for transactions, they are for experiences.

The other day, I drove past a Lexus dealership in the tony community of Newport Beach, CA. The lot was nearly empty. Not because its cars were in such high demand but because the huge dealership couldn’t get inventory due to the ongoing supply chain meltdown.

A few minutes later I arrived at the retail fantasyland known as Fashion Island. There, located between Lululemon and Anthropologie, was a Tesla store (Note: Tesla doesn’t call them showrooms or dealerships). Inside were even less cars than at the Lexus dealership. Only two to be exact. Yet the place was crowded!

And that was the point.

Tesla has figured out that they don’t need a vast real estate footprint to sell automobiles. All they need is a great product, well-trained representatives, an environment that conveys quality and i-Pads on which to place orders. Oh, and another key to their strategy, real estate-wise, their stores are always located in high traffic areas. Yes, the cost for that space is higher, but the results are indisputable.

I’m not in need of a new car … but I was tempted.

Seamless Service

Speaking of i-Pads, my next stop was around the corner at the Apple store and this is where the future of retail space hit me like a laser once again.

Like Tesla, the Apple store was busy even though the rest of the center was not.

From coast to coast, Apple has created a bright, open environment that engages rather than separates. Walking in, I was greeted and guided. Everything I wanted was on display and fully functional. Staff was plentiful and powered with knowledge and the technology tools – again i-Pads – to call up my Apple account(s), answer my questions and ultimately sell me stuff. Although I never felt like I was being sold. Every item I purchased was either ordered on my behalf or brought directly to me. And the transaction felt transaction-less. No lines, no cash registers, no paper receipts. Select Apple Pay and done. (Hello, Fintech).

I had just spent a good amount of money and felt great about it.

Working At You or With You?

Naturally, this entire experience got me thinking about our credit union clients and their members. Members who typically transact on one side of glass-divided counters with customer service professionals on the other side. Members who sit on chairs inside of cubicles on one side of desks across from financial advisors who are often interacting with a computer screen on the opposite side that their members cannot see. (Think airport ticket counters). Screens that hold important information about their money. Even though this is not the intent, the subliminal message this structure sends is Us and Them. Divide and Conquer. You Ask and We Consider.

Does this feel familiar? That’s okay, the entire banking industry operates this way.

Now there are those who claim that cars and computers are different than mortgages and auto loans. But they would be wrong. That’s because, at its core, buying cars and computers or securing loans are not simply transactions – they are experiences.

Experiences conducted inside of a physical environment. And every aspect of that environment, from the lighting and décor to the way professionals interact in concert (or opposition) with each other, informs that experience.

Not Where But How

Well before the pandemic began, the demise of bank and credit union branches had long been predicted. I don’t agree. I believe that branches will continue to exist but the environment – and therefore the experience – will need to change.

Even with the ever-expanding breakthroughs in technology, banking is an often tedious chore no different than buying a car or computer. But Tesla and Apple have figured that out that those chores can be transformed into easy, efficient and satisfying experiences that people want to keep on having.

And are willing to spend more in the process and maintain brand loyalty in a time when loyalty is often wavering somewhere between diminishing and non-existent.