Business Week recently reported on Wal-Mart’s move into financial services, its latest move came with introduction of the Discover Wal-Mart credit card, a partnership with GE Financial services.
It has also started to make a move into in-branch banking with Sun Trust. They currently co-operate 45 branches and have plans for a total of 100.
Wal-Mart is aiming to sell financial services to the un-banked and low-income customers that frequent its stores. Banking appeals to the company as it leads to an increased frequency of store visits.
Wal-Mart only needs to look at the UK to see how successful grocery banking can be. The market leaders, Sainsbury and Tesco now have a total of 5.8 million customers, 9% of the credit card market and 2.6% of the loans market. Success has come from the grocery stores not just relying on location, but introducing competitively priced product. Taking on established financial institutions wasn’t easy, but the grocery stores had one thing in their favor, trusted brands.
As Wal-Mart expands into financial services, brand trust is going to be critical. It’s currently fighting a battle with skeptics over this issue and although its future success isn’t entirely dependent on this, but still it’s a war Wal-Mart wants needs to win.
Its recent PR moves have been aggressive and perhaps a little naive. They were recently ridiculed by Comedy Central’s The Daily Show.
It’s always possible that Wal-Mart might respond to critics with concrete actions that would speak louder than any PR campaign. Actions that could instantly re-gain brand trust.