BANKS, SUPERMARKETS EXPLORE HOW TO RESOLVE CONFLICTING GOALS

Ashley Page

CHICAGO -- Supermarkets and in-store banks have endured an uneasy coexistence because of conflicting goals, according to participants at a recent conference here.

While supermarkets want banks that will serve their customers' needs for convenience services, the banks want to leverage the host store's traffic to generate more business in terms of loans and other financial offerings, the participants said.

For example, Ken Lewis, chief executive officer, Bank of America, Charlotte, N.C., said in a recent media report about branch closings that the bank prefers traditional branches to in-store locations because they generate more sales. The in-store banks tend to be more service-oriented, with sales that are not up to the financial institution's standards.

Both sides are starting to address these long-standing tensions, said Cliff Davis, president, National Commerce Bank Services, Memphis, Tenn., conference sponsor. "The landlord-tenant relationship is changing, but we're hoping that by educating our people about the need for increased and better communication with retailers, we'll be able to change it faster," he said.

"We've seen simple problems arise and escalate into huge problems all because of a lack of communication between the in-store bankers and the supermarket employees," said Shannon Nadasdy, director of financial services, Safeway, Pleasanton, Calif.

"We've found this is really a trial-and-error kind of relationship, and the only way to make it work is if there is strong communication at all levels of the organization. The question of 'How do we live each day together?' needs to be addressed at the corporate and store levels," she said.

Successful bank and supermarket relationships depend largely on the frequency of information sharing, Nadasdy said. "We find that the easiest means of keeping a steady flow of communication is to ask the bank manager to attend regular supermarket staff meetings. This small step shows that you care about creating a true working relationship with the bank employees."

Tom McLean, director, Wal-Mart Financial Services, Bentonville, Ark., stressed the importance of immersing the bank into a store's culture. "For an in-store bank to be successful, it must truly become a part of the supermarket in which it resides," he said.

The most effective way to achieve this is to invite the bank to partner with the supermarket during traffic-increasing activities such as community activities, events and sales, he said.

"The store manager has a responsibility to bring the bank into the culture of the supermarket," McLean said. "If supermarket employees are engaging in activities to bring more traffic into the store, so should be the bankers. Seeing the supermarket and bank employees working together solidifies the bond to customers, creating loyalty to both establishments. That's the mutually beneficial goal both parties should work toward."