Easy money

High street banks are understandably rather nervous about the latest developments at supermarket checkouts, where shoppers are being enticed by loans, mortgages and PEPs. Sainsbury’s has launched a bank, Tesco is preparing to introduce an international credit card this summer and Safeway has teamed up with Abbey National to offer a “new approach to family finances” with its ABC debit card.

Suddenly, supermarket brands are becoming synonymous with personal finance – a match that is not so incongruous, according to Nucleus Design managing director Peter Matthews. He points out that the supermarkets have built up brands their customers trust and know a lot about their customer base, enabling them to tailor their services accordingly.

Furthermore, he predicts that there is far more “brand stretching” to come. “We think of certain brands as retail brands at the moment, but many of them will start to transcend that description in the next few years,” adds Matthews. And as brands are stretched and moulded into new areas, so their graphic interpretation has to reflect and adapt to the new applications.

Paul Parkin, head of graphics at Rodney Fitch Design Consultants, thinks the new opportunities being explored by retailers are throwing up exciting challenges for designers. “It’s interesting the way people are making graphics more demanding now, especially in retail where it used to be a case of take a logo and stick it on. Now brand owners are much more flexible in the way they use graphics and people are pushing the role of graphics even more. But they have to be adapted to bear in mind the brand values. If not, the offer will be wrong,” he suggests.

Banking may be just one area where retailers are exploring new ways of increasing their revenue, but it’s a fast-growing one and so far seems to have been a wise gamble. Research published last month by advertising agency FCB shows that consumers perceive high street banks as “arrogant” and “unhelpful”, while supermarkets are seen as helpful, friendly and convenient. Matthews points out that supermarkets have two advantages: “a malleable identity which people trust and the added benefit of convenience – banking when you shop”. Nucleus is currently working on an on-line service for one of the big supermarket chains and has been involved in on-line banking. According to Matthews: “supermarkets are becoming increasingly customer oriented, whereas banks have never had to do that before. The supermarkets will end up offering full banking services. They are cool and calculating about building their own brands.”

Graphic identities are therefore having to stand up to a multiple of media, from leaflets and loyalty cards to websites and computer banking. “The way we think about brands has changed. In the past it was difficult enough to design a brand that worked well in different locations, now it has to work across other categories as well,” says Matthews.

Parkin claims that the vital thing in extending a brand is how strong it is in the first place. “As long as the brand values are right, everything else just becomes an adaptation,” he says. ©

Since Parkin arrived at Rodney Fitch he has worked with Virgin, the ultimate example of brand extension. Virgin’s foray into financial services has had much publicity and, Parkin claims, has been very successful because it is aimed at a broader market than its competitors.

“Virgin wanted to demystify PEPs. It knew there was an even bigger market out there because dealing with financial services is daunting and people don’t understand them.” He adds that the key to the marketing of Virgin Direct was keeping the language simple and honest, while the design is “simple and bold with a straightforward use of colour”.

Marks & Spencer was one of the first retailers to move into personal finance and has built up a strong base of five million account holders since it launched its charge card in 1984. The retailer is now assessing the way personal finances, which range from unit trusts and pensions to loans and life cover, are marketed in-store and is introducing a more co-ordinated approach throughout the chain with concepts developed by retail design group Evans Petty Associates.

“Research shows that more and more people like to come to a name that is trusted, offers value for money and gives high quality service. You don’t have to be that clever to work out that banks and insurance companies don’t have the best of reputations, and we’re saying you don’t have to go to them,” explains M&S media relations manager Chris Larkin.

He says that the most important element for M&S is retaining the brand. “The retail brand is widely known and highly regarded. We need to use that to demonstrate to our personal finance customers that the same brand means there is a link between the two – they’ll get the same quality and value for money.”

So far the supermarkets have also been careful to retain their core brand in their banking services, with graphics endorsing the link with the retail brand. For Sainsbury’s, it is Sainsbury’s Bank, while Tesco’s joint venture with the Royal Bank of Scotland supported by Scottish Widows is marketed as Tesco Personal Finance.

“All the design for our financial services must be easy to read and totally accessible to our customers. We want them to identify with Tesco Personal Finance,” claims a spokesman.

Yaran Meshoulam, head of strategy at retail design specialist 20/20, questions how effective supermarket banking will be; will shoppers be just as happy to sign for a loan as snap up three pizzas for the price of two? “Supermarkets are going to have to get customers to put more trust in them,” he suggests. “How far can brands stretch? Moving into the high margin stuff like loans, financial advice and pensions is a big leap as far as supermarkets are concerned.” He believes they will have to address the issue environmentally in-store, perhaps allocating separate areas with strong point-of-sale to market financial products.

Matthews also has slight reservations. “I don’t think it will necessarily be easy for supermarkets, but I anticipate they will be successful. What they have to do is unlock the value in their names and reputations, but they have to make sure the new activities don’t compromise their values,” he maintains.

Evans Petty has been working with M&S to create a more “co-ordinated look” for the in-store financial services areas. The intention, states Larkin, is to make areas “more user-friendly and inviting” with clear graphics explaining M&S is “not merely a provider of a charge card”. Evans Petty chairman Nigel Petty explains the aim was to create a “coherent message” about the financial services brand and raise awareness about the products. “M&S’s retail brand is very important, it’s an institution and we had to maintain that look of quality for point-of-sale and point-of-purchase.”

The consultancy has created a “cleaner image” which has been on trial in Manchester and Leeds and is due to be rolled out across 50 branches this summer. Changes include replacing former wood panels with screens incorporating graphics, and the emphasis, says Petty, is on consistency across the chain.

Matthews predicts other retailers will make the move into areas such as financial services. Opportunities exist where brands are credible, he says, pointing out that some retail brands are now becoming “lifestyle brands”. But he adds: “There are huge opportunities as well as risks, as some brands are more malleable than others.” For a lifestyle brand like Virgin, according to Parkin, there are almost no boundaries. “If your brand is that powerful and that flexible, what can’t you do?”