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Shedding Stodgy Image, Banks Enter Supermarkets


FORGET the grey-suited banker behind the walnut desk, his hushed tones sinking into the plush carpeting that laps the marble columns. A new strain of banker is here. He wanders the aisles of supermarkets giving away turkeys to people who open new accounts and helps shoppers find items.

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These sales-oriented bankers are adding new life to this traditionally button-down industry. Bank branches in supermarkets bring in customers and profits at three or four times the rate of regular brick and mortar branches; and the public is finding friendlier, more approachable service, industry analysts say.

"We're trying to put the fun back" into banking, says John LeCave, marketing director for the National Commerce Bancorporation (NCB) in Memphis, which advises banks on setting up supermarket branches.

Mimicking their host stores' marketing strategies, branches offer clever promotions on their products: special two-day loan sales, roses for buying certificates of deposit on Valentine's Day, and food coupons with slogans like "Juice up your borrowing." Rapid expansion

The success of these full-service supermarket branches has pushed their number to over 1,500 nationwide, with about 500 new ones added annually. The banks range from giants like BankAmerica and First Interstate to small community institutions.

The Northeast is only now entering the picture. Safety First National Bank opened Massachusetts' first supermarket branch last month in Worcester's Super Big Y store. Cohoes Savings Bank will open New York State's only supermarket branch in Rotterdam today.

Although banks have ventured into the retail-store environment before, this is perhaps the first time they have met with such success. In the 1970s in-store branches failed to move beyond low-profit check-cashing. The second generation in the early 1980s expanded to offer deposit services. The 1990s version has all the services of a regular bank branch, including mutual funds and annuities sales. Three-way benefits

"This is a win, win, win situation for the bank, for the supermarket, and for the consumer," says John Garnett, executive vice president of International Banking Technologies in Atlanta.

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For the consumer the attraction is convenience. Supermarket branches keep grocers' hours, opening seven days a week as late as 8 p.m. A consumer can apply for a loan as he walks in the store and have it approved by the time he has finished shopping.

For the supermarket, bank-account holders become steady customers. They also tend to spend more time and money in the store, surveys show.

For the bank, the daily flow of potential customers past its counters is an ideal marketing opportunity. A big supermarket has 15,000 to 30,000 people streaming through its doors each week. "You're talking about reaching stadium-size audiences of noncustomers on a frequent basis," Mr. LeCave points out.

Building a supermarket branch costs a fraction of the usual $1.25 million needed for its brick counterpart. Overheads are lower. Profitability comes in months rather than the usual three to five years.

Advertising outlays are also minimal. Regular branches have to use expensive media ads to pull in customers. For a supermarket branch, the customers are already in the "lobby."

Still, "unless you have a more sophisticated marketing plan which incorporates grocery marketing concepts, you're not likely to be a success," says Thomas Garrott, president of NCB. Marketing focuses on inexpensive trinkets such as key chains, note pads, and jar openers.

Staff hired for these branches need to be bright, verbal, and attractive, says Mr. Garrott, who calls them BVAs. Rarely numbers people, they are most often liberal arts graduates with a bent for salesmanship, he says. No banker's hours or national holidays - these new managers work nights and weekends plying the aisles.

"It requires a real paradigm shift," says NCB's LeCave. Traditional banking has thrived on passive selling. "A lot of traditional bankers don't find the prestige in going out of their paneled office ... into a suburban supermarket next to the produce."

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