Retail cracked the CX code. What can banks learn?

The retail industry has excelled where most others haven’t: at figuring out new tools and strategies to improve the customer experience (CX).

We see the results every day. The list includes personalized product recommendations, seamless physical and digital shopping, and instant customer support. The overall experience is so smooth that it’s redefined customer expectations across every industry.

There’s a lot banks can learn from retail-style thinking. For years, many banks have looked to retail as a CX North Star (see Wells Fargo’s now-famous “stores”). The trick to mapping a retail mindset onto banking is understanding where retail succeeds and identifying practical analogs for banks.

Here, I’ll walk you through four key CX lessons from retail and share how banks can adapt that thinking to serve customers better.

Lesson #1: Go omnichannel

Omnichannel is all the rage these days. The term itself may feel like business jargon. But if “omnichannel” feels like jargon now, it’s because retail set a gold standard that other industries have chased for years.

Just think about retail’s “buy online, pick up in store” (BOPIS) model. It lets customers start a purchase in one channel and complete it in another. The experience is seamless: orders are often ready in a couple of hours, and there’s no wait upon pickup.

Most banks have the right components for an omnichannel strategy: physical branches, ATMs, a mobile app, etc. But the experience for each feels disjointed. True omnichannel gives customers the same helpful experience across every channel. It also supports org-wide data sharing to personalize every interaction consistently.

At a basic level, that might look like offering similar services in person and online (something many banks already do with check deposits).

A step further might involve BOPIS-like digital-to-physical handoffs. For instance, a customer may digitally request a cashier’s check before heading to the local branch. The check is ready for instant pickup when they arrive – no wait is needed.

In retail, omnichannel experiences are so common that they’ve become a customer expectation. That expectation applies to banking, too. By following retail’s lead, banks can give customers the convenience and personalization they want. And they can maintain customer loyalty over time.

Lesson #2: Bring mobile into the branch

Great retailers use mobile to complement the in-store experience. But the best ones make mobile an in-store fixture.

Look at Target, for instance. You can build a shopping list in the Target app, see items in stock at your local store, and view their exact aisle location. You can scan barcodes in-store to apply app-exclusive coupons if you’re a rewards member.

Most banks need an analogous experience. Again, the problem is the separate branch and mobile data silos. And that’s a lost opportunity.

Consider, for instance, a new branch customer who wants to open a checking account. With an integrated mobile and branch experience, they could…

• Check-in on arrival via their bank app.
• Join a virtual queue for teller assistance with an estimated wait time.
• Explore educational content (say, about auto loans or Zelle scams) on a self-service tablet while they wait.
• Begin their checking account setup on mobile before finishing with a banker who can see all paperwork in progress.
• Take a financial “personality” quiz in their bank app that can match them with products they’ll love: maybe a brokerage account for an ambitious risk taker or a high-yield savings account for a cautious planner.

In one sense, this is a creative application of a retail-style omnichannel strategy. But more than that, it highlights the massive potential to deliver more value to customers through a blended mobile and branch experience.

Lesson #3: Embrace physical and digital partnerships

You’ve probably noticed the store-within-as-store trend over the years: a Starbucks cafe in your local grocery store, an Ulta stand in Target, or an Apple mini-store in Best Buy.

These retail partnerships are everywhere, and for good reason. More brands in one space means more foot traffic for both parties. Moreover, the “embedded” brand can make sales without the overhead of a standalone store.

There’s also a specific CX advantage. After all, customers love convenience. If customers know they want coffee and groceries, for example, they’ll go where they can buy both.

Banks can benefit from similar partnerships. It’s no secret that branches have declined for over a decade, although closures slowed last year. As branch usage evolves, retail-style partnerships can help banks increase foot traffic and lower costs in places where they still have a footprint.

What might that strategy look like? Consider…

• Branded ATMs or micro-branches in high-traffic businesses. Many banks already do this with grocery stores and airports. But there’s room to expand to other areas: large corporate offices, local athletic clubs, etc.
• Co-branded storefronts: CapitalOne Cafe (a partnership with Peet’s Coffee) is a great example. People might go in for some caffeine-fueled deep work and leave with a new savings account – something I did in my startup days.

There’s also room to flip the partnership model by embedding nonbank financial services in existing branches: a tax advisor to help small business owners, an insurance agent to support home or auto borrowers, etc.

But don’t just limit this collaboration to the physical world. The underlying logic is that customers have countless relationships with financial and non-financial institutions. Those relationships extend to the digital world as well. And banks can collaborate with this broader ecosystem to offer financial services wherever customers need them.

This work will require more data sharing between banks and partners, like going omnichannel. However, the end-user possibilities are enormous: consider account aggregation for consumers or embedded request-for-payment buttons for small businesses.

The bottom line? No matter the path, both digital and brick-and-mortar partnerships could dramatically transform the banking customer experience.

Lesson #4: Take customer care to social media

Call a major retailer, and you might be on hold for half an hour. But tag them on X (formerly known as Twitter), and you’ll get a response in seconds.

This social-media-heavy customer care model is intentional. The reality is that apps like X have massive reach. And if a customer shares a bad experience, their story could quickly go viral.

To keep negativity from spreading, retailers have embraced what I call “social care”: an approach that involves constant @mention and hashtag monitoring to catch brand-related feedback before it reaches a broader audience. Banks can benefit from a similar approach.

Wells Fargo has been an industry leader on this front. It has a dedicated social team that can quickly uncover customer complaints and respond with a request to chat. Moreover, the team can often resolve customer issues in that channel instead of transitioning to a phone call or email thread.

Banks do have to get creative with a social care strategy. Unlike retailers, for instance, they need robust customer authentication measures to mitigate fraud. But with the right digital tools and a proactive approach, banks can deliver faster and more satisfying customer support.

To refine banking CX, be adventurous

Rome wasn’t built in a day, nor was retail’s powerful CX model. Behind the scenes, retailers had to test, tweak and stumble before they found the right mix of solutions. The guiding principle throughout is to be adventurous because the competition surely will.

Banks will benefit from the same approach. With ambitious thinking and a go-getter mindset, they can usher in a new era of banking CX.

Young Pham is Chief Strategy Officer at CI&T.