The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

More Service, Less Space

On October 30th, 2017, posted in: Industry, Uncategorized by

Time lapse image of American mall at Christmas time

Have you been paying attention to what’s happening in the retail market? Stores are getting smaller. I’m not talking about the mom and pop stores – they’ve always been small. I’m talking about retailers whose giant stores are equal to their giant brands. Suddenly, like “poof,” you have Walmart, Target, Build-A-Bear and others moving to something on a much lesser scale. I went into a Walmart recently where I could see both the east and west outer wall upon stepping inside the double doors. What? That’s quite a change given that I’ve been in Walmart’s so big that women’s shoes are in a different time zone than barbeque pits.

The old joke between golfers who hit their drives really far and those who don’t is that you could build a Walmart between the ball’s resting spots. For those of you who are novices to golf lingo and humor, that is a really long way and a considerable smack to one’s ego to say nothing for the damage inflicted upon the psyche of the golfer owning the short shot.

Well, with all this talk of smaller stores, a paradigm shift is happening in retail (and golf humor). Likewise, banks, credit unions, grocery stores, and other traditional retailers are looking for ways to shrink footprints and still serve the market. Look, you know why. Unless you’ve been stuck in your basement playing Minecraft for the last few years (which may be some of you – seriously), it’s because of the internet, aka, e-delivery, the worldwide web.

To draw a boxing analogy. This is what it would sound like as the tuxedo-clad, sharp-dressed man takes the microphone to announce the main event: Ladies and Gentlemen, welcome to the disruptor of all disruptors, the paradigm shift to end all shifts, the 900 lb. gorilla in the room, LET’S GET READY TO RUMBLE, the undisputed king of scratch to society’s insatiable shopping itch, the “A” in USA, the king of convenience, the purveyor of “prime,” the elixir to busy lifestyles, the company that put ease in easy, and turned big box malls into caves and singlehandedly stripped profit from strip malls. Ladies and Gentlemen, please welcome the undisputed champion of retail – AMAZON!!!!!

As people have replaced their store visits with a trip to their phone, the brick and mortar building is on a slow slog to becoming a relic of shopping habits past.  145,000 sq. ft. has been effectively replaced by a 3” X 5” phone screen. So as a result, every retail executive in America has about the same business plan — including St. Louis Community Credit Union. It goes something like this: “We are making a big commitment to improving and/or shrinking store fronts, and expanding digital capabilities.”

The smaller stores, or as is the case with St Louis Community, the smaller offices seek to balance shifting consumer habits. With more people online, there is less of a need to visit a location. At SLCCU in recent years, we have seen what use to be branch traffic migrate to mobile banking. In recent times, we show an acceleration in the trend. St Louis Community offices will continue changing to a smaller size with a larger emphasis on consultative actions versus transaction processing. You’ve seen this transformation in many of our new deployments. The same holds true for the future.

Look, the perfect combination is both offices and digital solutions. Likewise, our friends in retail will recognize that stores will take on an entirely different look and functionality in upcoming years. The pendulum has swung the other way. Strip malls and big box malls show the strains of a changing market every day. Retailers expect to hire less people in this upcoming holiday season than in years’ past – an admission to the fact that times are changing for sure. FORE!!!

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