Now, here's a head scratcher.
According to an Associated Press story available at Forbes, national grocery store chain, Kroger, is expanding its financial service offerings - "Stores now market mortgages, home equity lines of credit and a just-expanded set of a half-dozen insurance coverages from identity theft to home and life policies." Huh?
Kroger thinks it will help increase foot traffic to stores and build customer loyalty. I don't know - maybe they're right, but I can't imagine someone thinking about needing a term life policy and heading to the local Kroger to pick one up with the weekly groceries.
One things grocery stores could do very effectively is give out cash.
ReplyDeleteInstead of charging for cashbacks from debit cards, the grocery stores could lower their back office costs by giving out cashbacks free.
Why bother taking cash from a customer, bundling it up, giving it your bank when you can simply recycle the cash at the till and have the debit machine do all the back office work.
People could use an insurance provider which has more at stake, like grocery sales!
ReplyDeleteHope Kroger understands that apart from bringing foot traffic it will bring some risks too. Unhappy policy buyers may not shop for grocery either. Doesn't that give kroger some incentives to come up with better insurance products?
Apparently your wife is doing all of the shopping. The notion of a supermarket selling financial services has been a runaway success in Europe. Tesco is the third largest provider of financial services in some sectors. Sainsbury's, another UK grocery change, has something like 2 billion sterling in savings deposits. The age of non-traditional financial services providers started long ago. Kroger -- and apparently Froeb -- are late to the game.
ReplyDeleteIn defense of my co-blogger, it's not Froeb who is apparently "late to the game." It's me (and yes, my wife does tend to do the shopping).
ReplyDeleteThanks for the comment about the European stores. What do you think is creating this success? Is it a brand name effect? Is it simply having better access to the customers from their grocery visits? If it's one of these, where does it end? Should we expect grocery stores like Tesco to continue diversifying into other products? And, finally, how should we judge whether a business is a "runaway success?" Are size and growth the metrics?