E*Trade made a pretty big splash a few years back, when they announced they were moving from "clicks to bricks" by building flagship retail trading locations in San Francisco and New York. If you never had the opportunity to visit one, they were literally littered with plasma screens, LED tickets, and big-boards flashing stock quotes and providing E*Trade's own closed circuit television feed. As quoted by the San Francisco Chronicle back in 2000, someone close to E*Trade said about the stores,This is anything but a branch strategy...this creates a concept store that presents the brand. (Full article: here)
Are these high-concept retail financial services "branded experience" stores worth the money? Not to me, and apparently not to E*Trade.
While E*Trade has continued to open branches across the US--undoubtedly buoyed by their burgeoning deposit business, as well as the core trading offer--the Manhattan flagship location (pictured above), has long since been shuttered and is now a Wachovia or a Chase branch (can't remember which). The San Francisco flagship on Market Street is still operational, but I suspect that has more to do with closing an office in your hometown in a location with landmark status than it does with any sort of break-even.The lesson for all of us? The "branded experiences" not linked to any tangible service or communications functionality just don't cut it for customers, and don't cut it as ROI justification long-term. (One potential exception: ING Direct's coffee shops, which we'll address in an upcoming article)
(Photos taken from E*Trade Annual Report)
