Another retailer banking on finance in the future

Following on from our previous piece and the obvious move of Tesco to become a fully regulated bank after a decade of white labelling other companies products. We now hear that another High Street retailer is likely to follow suit.

Boots the high street peddler of cough syrup, toothbrushes and beauty products has announced it’s considering a regulatory status and selling personal banking products throughout it’s 2600 chemists and retail stores.

This begs the question just why do these business believe that they have the credibility, and what it takes to offer an overpriced current account and a second rate customer experience!

Well in fact they don’t, what they do have however, is an understanding of the imperatives that drive commodity purchases and a depth of knowledge about creating a great customer experience. That and of course they have the experience of using them in both the real and virtual world.

For many years Financial Service brands have used affinity deals with retailers and other brands in their pursuit of new customers, mainly because they found it difficult to travel across the emotional gap between their businesses and what their prospects valued and desired.

What they didn’t realise in undertaking this strategy is that in so doing they transferred all of their expertise, knowledge and credibility to their affinity partners, who while happy in the short term to share revenue streams, ultimately gained a longer term prize of being recognised as a capable financial provider.

This of course has all come at a time when consumer trust and belief in the financial institutions they grew up with has been shaken to the core, with the nationalisation and collapse of the Banking sector.

So while the retailers of today who are looking at the banks of tomorrow should have a lasting gratitude to organisations such as MBNA. Perhaps it’s time for the Banks of today to really sit up and take notice of what will become of retail in the future.

Ps. You might also find it slightly ironic that MBNA was set up in a Newark, Delaware supermarket, just goes to prove, what goes around, comes around.

David McCann
Planning Director