What Can Credit Unions Learn from a Hardware Store?

Home Depot and Lowe’s dominate the hardware store retail market. But when I need to figure out how to attach a thingamajig to a whatnot without breaking the bumfuzzle, I go to Ace Hardware. Locally-owned Ace Hardware. Do they have dozens of everything that homeowners’ need for their projects? No. Do they have the lowest prices? No. Can you buy your next stovetop there? Yes! (As long as it’s an outdoor BBQ). But Ace is thriving. Why? The answer greets you right at the door. So does Walmart, you say? The difference is that the person greeting you at Ace will personally escort you over to the thing you need, answer your questions about the thing, help you find the three other things you didn’t know you needed and then explain how all the things fit together. They are subject matter experts, not clerks. Knowledgeable pros who care about their customers. What a concept! Which brings me to my point: This differentiator doesn’t take place via Zoom or require yet another forgotten website password. It takes place inside a store. Or to put it another way, if Ace was a credit union, it would be taking place inside a branch where the customer is a member and the hardware expert is a financial services professional. Driven by COVID, everyone in the credit union industry is wondering about the future of their branches. How will the space need to change? What technology needs to be incorporated? Will branches even be necessary? These are valid questions and many are already declaring that bank and credit union branches have died and just don’t know it yet. But for those who think that “brick and mortar” space doesn’t provide sustaining value, visit any Ace Hardware store. See how the customers are served. Watch the variety and volume of transactions. Look at the diversity of customers in gender, race and age. People in the community leave their homes and drive to Ace because it has the products they need coupled with the service they want. Yes, they can buy the same items online, but when they need help with something more complex, they go to Ace. And if this were banking, think of depositing a check at an ATM vs. receiving advice on the exact best mortgage for your needs. So, as you observe Ace’s business model, think about your credit union branches and whether they are delivering the same value and peace-of-mind as the place with the paint and power tools.