First Community Enjoys Loan Success in Walmart Branches
When it comes to maintaining and expanding branches in Walmart stores, the $1.6 billion First Community CU of St. Louis is now among the foremost CU cheerleaders.
During 2010, First Community, the largest credit union in metro St. Louis, said it witnessed a definite spike in Walmart loans, more than 1 million transactions, favorable name recognition and now is negotiating agreements for two more in-store branches, one each in Illinois and Missouri.
"In my view, you have to be aggressive and play the game if you want to win," said Glenn Barks, president/CEO, in describing First Community's strategy in actively marketing the CU in Walmart facilities. On that score, he went on, "We feel our own branches have a better chance of success in a Walmart than just being in the grocery stores alone. That is where everybody shops."
First Community currently has 35 branches in metro St. Louis serving 200,000 members and, of these, 11 are in Walmarts with plans to open a 12th in High Ridge, Mo., later this year and a 13th in Granite City, Ill.
Like many other CUs with Walmart branches, First Community keeps its facilities open seven days a week. Each Walmart office has a staff of six employees, which includes a manager with the staff working a four-day week. "Everyone does their share of weekends," noted Laura Alfeldt, vice president of marketing.
Working under contracts with Financial Supermarkets Inc., the Cornelia, Ga. vendor servicing banks and CUs, First Community opened its first Walmart branch in 2004 in Maplewood, a St. Louis suburb "with less than 500 square feet of office space and a few thousand transactions and now fast-forward to 2010 and the combined Walmarts did nearly a million financial transactions," said Alfeldt.
First Community saw more than $500 million in closed loans in 2010 with Walmart offices playing a strong role in that, she said, noting that transaction volume was up 4% but the Walmart offices had a 20% increase in transaction volume.
Barks, the First Community CEO, said like other CUs and banks, his CU has a five-year contract with FSI, which deals directly with Walmart management either at its headquarters in Bentonville, Ark., or through regional offices.
"We have had good relations in our contacts with Walmart management, but right now they operate as a middleman," said Barks.
As in other arrangements, First Community pays to lease the space from Walmart and provides the staff and supplies. The biggest location is more than 2,000 square feet, but most average about 700 square feet. They typically have three windows, a financial services desk and an office for member privacy in an otherwise open environment.
First Community has been successful in getting the Walmart contracts, often replacing regional banks that held the franchise, said Barks.
Like other CUs across the country with a Walmart franchise, aisle marketing is a key factor in bringing in the business, said First Community executives.
"Our Walmart offices have their own marketing program developed by individual managers who combine mini-promotions, displays, balloons and public address announcements to capture the attention of shoppers," said Alfeldt. "Popsicles are handed out on hot summer days, and popcorn is served all day, every day at all locations with custom-made First Community popcorn bags telling members and prospective members, 'Thanks for Poppin' In.'"