Would you like an M&S bank account with your knickers?

By Charlotte Amos

June 26, 2012 | 4 min read

So M&S has decided to take the term ‘retail bank’ literally. Considering their existing M&S Money offering, it was only a matter of time really. M&S is hoping to capitalise on its existing brand loyalty and customer base in light of the mistrust and disillusion a lot of customers feel towards the banking industry. If you look at it like that, the potential for M&S Bank is huge. But Tesco is following closely behind and there is already another bank on the street whose business model, according to its chairman, is entirely focussed on customer experience.

According to its chairman Anthony Thomson, Metro Bank’s retail model is ingrained in every aspect of the business: “We think of ourselves as a retailer and we say ‘let’s be open when people want to bank’. He explains: “High-street banks would have you believe that all that matters is the rate. That’s complete nonsense because in every other aspect of consumers’ lives, what drives them is value [...] Customer experience is the only thing that matters to us.”

When compared to M&S chief executive Marc Bolland’s M&S Bank launch statement, the messages do sound rather similar: "This bank will be built on M&S values, putting the customer at the heart of the proposition and delivering the exceptional service that sets us apart from the competition."

So if their opening hours are similar and they are both customer-centred, what can M&S offer that Metro Bank - and Tesco - can’t?

First and foremost, M&S in a highly trusted retail brand in an era rampant with consumer cynicism and distrust. Its retail heritage is a huge strength when compared to a newcomer like Metro Bank. Secondly, M&S has a loyal customer base that is already in-store for other reasons besides the weekly grocery shop (regularly stocking up on boxers and tights, to name but two).

The fact that M&S will offer consumers the luxury of shopping and banking all under one roof is, on many levels, a very positive move. This level of convenience (read: “make my life easier”) is what consumers now expect from brands. So the fact that M&S will offer greater convenience than the traditional retail bank players because its customers will already be in-store is a significant benefit and one that also serves to differentiate its offering. Differentiation being, of course, the other Holy Grail for brands.

But the long-term success of M&S Bank will depend on how it is integrated into the rest of the brand’s overall shopping experience. Here, analysis of its customers’ mindsets and respective journeys through the store will be hugely valuable. For example, would I rather do some banking during or right after the weekly food shop when I’m hungry and have two bored children on my arm? Highly unlikely. If I’m in M&S looking for a dress I saw in a magazine or stocking up on essentials and remember that I need to cash in a cheque because, now that could be very useful indeed, saving me from having to suffer the age-old annoyance of ‘popping to the bank at lunchtime’ (read: queuing for 30 minutes and traipsing back to the office defeated).

Sceptics are already highlighting the fact that M&S Bank is run in conjunction with HSBC, so the only thing that will be M&S about it is the brand and the floor space, whilst HSBC supplies and manages everything else. But let’s just wait and see - the partnership could be a brilliant one. The UK banking scene has become pretty stale, with little differentiation in products. M&S could be offering the chance for consumers to become accustomed to an improved banking experience.

M&S has traditionally been seen as a trusted brand rather than an exciting one, but it looks like its time might have come to liven things up.


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