A credit union employee serving food samples in your grocery store isles may seem strange, but for BECU staffers this is a commonplace occurrence at their branches located in grocery stores. BECU staff members, known as consultants, will typically do demos of products and to converse with shoppers.
In an increasingly competitive financial marketplace with a proliferation of branches, building new branches in retail establishments provides an additional touch point for reaching members or potential members. Rather than solely relying on individuals to visit the credit union branch, having a presence in grocery stores or other retail chains capitalizes on pre-existing foot traffic and consumer shopping routines.
Case Study: BECU
When they initially began building in-store branches, BECU’s field of membership was limited to Boeing employees and their family members, though still providing a strong foundation for membership growth. We were able to acquire significant membership through the in-store branches, said Marc Healy, director of member solutions at BECU. Currently their field of membership includes the entire state of Washington .
Six years ago BECU was a two branch financial institution; now its branch network consists of 35 branches, 33 of which are in-store branches located in area grocery stores. BECU’s in-store branches have been a contributor to its dramatic growth inassets and membership. With $3 billion in assets before launching the in-store program in 1999, BECU has now surpassed more than $5 billion in assets as of year-end for 2004 and has more than 400,000 members.
The initial branch expansion strategy was building branches closer to where the members actually resided. We thought that we could get closer to our members so they didn’t have to drive to get to us, said Healy . Our membershipwent through the roof. Over 100 members a month were joining in these 350-400 square foot facilities.
Growth Strategy
In 1999 BECU partnered with a Haggens grocery store for its first in-store branch. Over the next few years they slowly added more in-store branches (see chart below) . Two years ago BECU launched a major in-store branch partnership with Safeway.We really exploded in the retail branch world in fourth quarter of 2003 and last year, said Healy.
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BECU’s In-Store Branch Timeline
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| Year | 1999 | 2000 | 2001 | 2003 | 2004 |
| Number of new branches | 3 | 1 | 2 | 9 | 17 |
| Retail Partner | Top Foods | Top Foods | Albertsons and Kroger | Safeway (8) and Top Foods | Safeway |
In 2004 in their Safeway stores alone they brought in 27,000 new members and the other four in-store locations brought in just over 10,000. Our two main branches brought in just shy of 12,000, making it 41,000 new members in 2004, said Healy.
Even in the in-store branches that are five years old BECU is still seeing growth. One brought in 105 new members and the other 120 this past January.
Forging Relationships
The cost benefits of smaller branches requiring less staff and overhead are apparent, but BECU has leveraged the additional benefits of the retail partnerships and community involvement. They partner with the stores for marketings, community events, andpromotions.
The reasons we call our employees consultants’at the in-stores is that they show consumers how to conduct business with us. We demo online banking and go through a routine with consumers how to continually be serviced through a remotechannel, said Healy.
BECU consultants make a concerted effort to get involved in the community, each giving $4,000-5,000 a year in donations. They engage themselves in the community, participating in local chamber functions or with local school events. These are niceways for us to give back to the communities that we reside in, said Healy.