In the days when banks treated your money as if it was their own, the idea that a branch could be considered a retail outlet would have been ridiculous. Nowadays, you will be hard pressed to find a financial institution which is not treating its network in the same way that grocery multiples treat their chains. With this change have come important shifts in the role of point of purchase (POP) material.
From simple information leaflets and promotional activity, financial services POP now has to be interactive, involving and in line with the brand imagery. The most dramatic developments have been in using POP within an environmental context. Following Abbey National’s lead, Halifax and Nationwide have both experimented with infotainment TV in their branches (although Halifax has now removed it), while Barclays has been softening the image in its branches.
Neil McDonald, associate partner at Freestone Design Consultancy, which works with Abbey National on its POP, notes that, “you are now seeing the glass-fronted bank, where they used to be all stone with small windows. Now you find TV screens, interactive displays and Internet access”.
He believes NatWest has probably gone furthest in adopting retail POP techniques, with window posters and in-store promotional activity. The market position of a bank is critical to how far it can go, he says: “Abbey is in the middle to lower end of the market, as is Lloyds TSB, while Barclays is middle market. That is reflected in its branch marketing – some can get away with a much stronger retail approach.”
At Abbey National, Martin Peterlechner, group marketing manager of channels, says the breadth of what banks have to offer has helped to force this change in approach. “We are in a similar position to everyone else in that the number of products we are trying to sell to consumers is growing exponentially. Those products are also becoming increasingly complex,” he says.
As a result, the product-led approach to POP is no longer viable, as it leads to branches being overwhelmed by competing offers. Last year, Abbey National overhauled its brand imagery and pushed the new approach through to the branches. “One of the things we did was to reduce severely the amount of literature and materials in branches.
We rewrote and restyled them so that everything is in plain English, accessible and easy to identify. Customers can come in and get quickly the information they need,” says Peterlechner.
Extensive research into how customers use branches, carried out through shopping and exit surveys, has also led to the zoning of Abbey National’s branches. In the same way as packaged and durable goods retailers position similar products in the same shelf space, or put together displays as holding areas, the bank now implements POP within defined zones.
“It is about putting the information in appropriate areas, so that at cashpoints you find information on all the other things you could do there, such as transferring funds,” says Peterlechner. Adopting an approach widely used in packaged goods and fashion retailing has to be tempered by the fact that the company is a bank. “We don’t expect customers to come in and shop with us as they would at a retailer,” he says.
This has not prevented Abbey National from linking with Safeway to put branches into supermarkets. These outlets offer a significantly different experience to customers from the one they get in a standalone branch. The bank can be far more retail-oriented in both the design and POP it uses.
According to Peterlechner, the added benefits such outlets offer outweigh any inhibitions customers may have about a bank acting like a retailer: “Our research backs the point that consumers are not shocked to see a bank in a supermarket.”
Despite the ability to use much more consumer-focused POP in those circumstances, financial services remain a considered purchase, rather than an impulse buy. This limits the extent of interaction which customers will have with the literature. While a grocery POP fixture can expect to drive sales immediately, most bank customers will take materials away to mull over and discuss with other family members or friends.
This does not prevent financial point of sale from giving some of the same dynamic experiences to consumers as they get from POP in other sectors.
Oakley Young recently won two golds at the British Point of Purchase Awards for a savings leaflet dispenser it designed for Barclays. “The idea was to create a focal point in outlets for people to go to for savings information, prior to going to an adviser,” says Diane Batty, business development manager at bespoke display specialists Oakley Young.
The unit offered consumers a set of colour-coded questions. To reveal the answer, they pulled a coloured mechanical lever which revealed key information about the product through a window in the unit.
This window also directed the consumer to one of the corresponding leaflets. The unit blended in with existing merchandisers, while also acting as a beacon in-store.
Batty says that financial POP has to engage consumers when they are in the right shopping mode. “Research shows that shoppers select in and select out. It is about capturing them when they want to select in, when they are in browse mode, looking for something in the outlet. That’s when they are prepared to give the time,” she adds.
POP also has to be used as part of a holistic marketing exercise which embraces the full range of exposure to messages, from TV commercials to point of sale.
Any material which conflicts with the brand is likely to confuse, rather than create interest and sales. Batty says this approach is part of the recognition by financial institutions that they are retail brands.
“The biggest shift is, if you look at the fact that banks and building societies have been on the high street longer than any other retailer, they are only now emerging as financial outlets,” she says.
In “Market Research Strategies”, a new report published by FT Retail & Consumer, the notion of the “branch as brand” is recognised as an important trend. To support this approach, three elements are required – a strong brand in its own right; a clear product and service offer; a strong customer service culture. While banks may be able to lay claim to the first two, the third has certainly tended to elude them.
But as competition hots up, using the brand to leverage traffic on the high street, and linking this to POP activity, has been recognised as mission critical.
“It is the combination of these three factors which determines whether the outlet is operating effectively as an access point for and to the retail brand. A consumer’s choice of where to shop then becomes more influenced by branding than by simple physical characteristics such as location, parking, and the like,” says the report.
The problem for a financial services provider like American Express is not about branding – it has a very powerful global brand – but about controlling the point of sale. It relies on merchants to display the POP materials which Amex provides, and to ensure they are appropriately implemented. One of the main ways it is able to ensure commitment and compliance is by educating outlets about the impact which the card’s POP can have.
“We have a lot of research that looks at the behaviour of our card members and which tells us the impact that POP has on their behaviour,” says Philip Vergeylen, vice-president marketing, Europe, at Amex. Among the findings the company has made is that 28 per cent of card members look for Amex POP before going into a restaurant, while over half have a negative opinion of a restaurant which doesn’t accept a card. These attitudes directly influence behaviour – 81 per cent will not go to restaurants that do not take Amex.
“We run a tracking measurement that shows if you put up one piece of POP material, business goes up by 12 per cent. If you put up a second piece, you get an additional ten per cent uplift. That tells us it is powerful,” says Vergeylen. He identifies a clear benefit as being the ability to communicate directly with cardholders about the importance of looking for the American Express decal, something which MasterCard and Visa are unable to do, because their cards are issued through banks, so they do not have direct customer contact.
As the company has looked to expand its base beyond the traditional travel and entertainment, its POP has become increasingly complicated. “Probably the most difficult thing in our point-of-sale strategy is dealing with cultural differences. We have different materials for each industry, so there is a wide variety of items. Trying to match to the merchant, industry and even position within the outlet is an continual difficulty,” he says.
Despite the adoption of conventional retail techniques in financial POP, this sector still requires careful handling. For one thing, the brand imagery and product range is more complex than exists in most packaged goods retail environments. Consumers do have a set of expectations about how a bank will look and feel, which may include hygiene factors such as security and reliability.
Charles Kessler, marketing director of Kesslers International says: “Consumers view a visit to their bank or building society in a different way to other high street shops. Some avoid a visit unless absolutely necessary. To many it is a chore.”
However,this can present good opportunities for influencing customers, especially while they are queuing, which may also help to improve perceptions of service levels. Distracting and involving POP may help consumers to forget they are waiting in line.
But any in-store activity has to be consistent with the total brand experience. “In-branch display is a key method of ensuring that each branch of a bank presents a recognisable, consistent brand image to the customer,” says Kessler.
Although supermarkets may be in the process of offering banking services, either by themselves or through in-store concessions, there are limits to how far banks can go in adopting packaged goods POP techniques.
Understanding what the customer wants and will accept is now more important than ever.