Just after 11 a.m. on a recent Friday at the Noriega Street Safeway, Celia Low set out, clipboard in hand, in search of new checking account customers.
Coming upon an older woman hunched over a cart of groceries, Ms. Low gave her customarily perky greeting: "Hi! I'm with Wells Fargo Bank."
"I have my bank for years and years," the woman said, starting to shuffle away.
"Well, if you have any questions, there are two of us here seven days a week," said Ms. Low.
Such encounters are the meat-and-potatoes of supermarket branching, banking's boldest experiment in the type of sales and marketing typical of more traditional forms of retailing. While U.S. financial institutions have moved to deemphasize old-style brick-and-mortar branches, they have opened more than 3,000 facilities in stores, most of those in the last three years.
San Francisco-based Wells Fargo is in the forefront of the trend, with an emphasis on small, two-person facilities like the one where Ms. Low works. The strategy depends heavily on people like Ms. Low, 25, who typifies the skills and personality required to sell in store aisles.
These are not the branch tellers of the past, and they face a very different type of selling and service proposition.
A few moments after her previous rejection, Ms. Low was asked by a short, stocky woman to help her retrieve a jar of honey from a top shelf. Ms. Low gladly helped. She also told the woman that she works for the new Wells Fargo banking center in the store, which has convenient hours and free checking.
Later, the bank representative came upon a barrel-chested man in a blue sweatshirt and baseball cap with the San Francisco Fire Department logo.
"I'm John," said the man. "Remember me? From the produce aisle, we met once before."
"How are you?"
"Well, I'm healthy as can be," the firefighter says.
Ms. Low learned that the man banks at the fire department's credit union, an especially tough competitor. Undaunted, she opens a brochure to explain Wells' checking account options. The man seems interested, then laughs nervously.
"If you ever want to go to lunch with someone, or to dinner ...," he ventured.
"This is my job, my office," said Ms. Low.
"O.K., well, nice meeting you," said the firefighter, slinking away.
Supermarket branches, more streamlined and cheaper to staff and operate than brick-and-mortar offices, are not new. Several hundred existed in the 1970s, according to International Banking Technologies, an Atlanta-based consulting firm that specializes in helping banks open them. But the numbers have skyrocketed in the 1990s, thanks to banks like Wells.
By yearend, the San Francisco-based bank plans to have closed 314 of the 615 traditional branches it had in California at the end of 1994. By the middle of 1997, the bank also plans to have closed about 350 of the California branches it is acquiring with First Interstate Bancorp.
In their place, Wells is opening hundreds of the extremely compact supermarket banking centers.
Each occupies only 27 to 36 square feet. That is about the area covered by three of the pallets on which grocers stack big bags of dog food or charcoal briquettes that shoppers normally pass as they walk out of a store.
Wells Fargo chairman Paul Hazen said in an interview that the branches, like the charcoal briquettes, are near the doors so that shoppers pass them as they leave.
The banking centers are to be staffed seven days a week by two people, sometimes working together and sometimes alone. Each unit has a laptop computer for opening accounts, an automated teller machine and a separate card reader for changing personal identification numbers, a combination photocopier and fax machine for paperwork, a telephone, and a customer service phone for contacting service representatives or receiving messages.
Instead of a desk, there is a foot-wide shelf for writing.
Wells has been opening these banking centers at a breakneck pace. It plans to operate 527 by yearend - half its total branches - up from zero at the start of 1994.
By yearend, Wells also plans to have another 247 larger, full-service supermarket branches, and around 325 traditional branches. Its total in the state will be about 1,100, including those from First Interstate, which did minimal supermarket banking.
Wells officials insist that careful market research and simple economics are dictating the change. The bank figures that for the cost of five traditional branches it can have eight banking centers, four full-service branches in supermarkets, and $1 million in annual cost savings.
Sales also are supposed to be higher in banking centers. Wells officials calculate that 7.2 checking accounts can be opened per month by a full-time banker in a traditional branch, compared to 10.3 in a full-service supermarket branch and 17.4 in a banking center.
Sales are better at banking centers because their staffs are dedicated to drumming up new business. By contrast, employees in traditional branches and full-service supermarket units get distracted by handling transactions.
Wells' depiction of the banking centers in presentations for analysts last December played a big part in persuading many on Wall Street that the bank has indeed built a better mousetrap. This, in turn, convinced them that Wells' stock was worth more than previously reckoned and helped drive up its share price, which enriched its currency for the First Interstate purchase.
California rival BankAmerica Corp. is, on a more modest scale, also moving toward scaled-down supermarket outlets. It is dispatching a specially trained sales force to sell products alongside ATMs in a couple of hundred Lucky supermarkets.
But BankAmerica isn't yet closing down traditional branches. And many experts wonder whether Wells' scaled-down supermarket branches will be enough to replace traditional branches.
"I don't consider what I hear about to be a branch; it's an ATM with two human beings attached," said Anne Morgan Moore, president of Synergistics Research Corp., an Atlanta-based research firm. "You need some privacy" in order to sell financial products, she said.
Ms. Low and her partner, Suzanne Nguyen, 29, said they had full confidence that the new banking centers would succeed.
"In three years, the banking industry is going to be completely different," Ms. Low said. "Right now, we're just on the cusp of it."
Margaret L. Kane, the Wells Fargo senior vice president overseeing the banking centers, said the job of manning banking centers has been attractive to both young and old, men and women, and bankers and nonbankers with sales experience. Ms. Low and Ms. Nguyen are at the younger end of the spectrum.
Ms. Low started full-time at Wells after graduating last year from San Francisco State University with a business administration degree. Ms. Nguyen, 29, has a bachelor of science in accounting and worked part-time at Wells from 1991 until going full-time in 1993.
Both women said they decided to make a one-year commitment to working in the new banking centers. They did so after being convinced in presentations by bank managers that it was a wave of the future and that their prospects for advancement would be better than in a traditional branch.
Both women asked to work at the Noriega Safeway because they know the heavily Asian neighborhood. Ms. Low, a third-generation Chinese-American, grew up nearby. She speaks Chinese, which at times she uses in her work.
Ms. Nguyen moved to San Francisco from Saigon when she was 11, and is fluent in Vietnamese.
Ms. Low started her recent Friday shift at 9 a.m. when the banking center opened. Ms. Nguyen arrived an hour later and was quickly briefed by Ms. Low about electronic mail and voice messages from the regional manager.
Ms. Low then made an announcement over the public address system - the kind she makes about once an hour.
"Good morning shoppers. Wells Fargo Bank has a new checking account. It allows you to shop and pay your bills faster. Best of all, it's free of monthly service fees with direct deposit. Stop by the Wells Fargo Bank for details. We are located right by check stand No. 8."
Ms. Nguyen, who said that one of the toughest parts of the job is dealing with rejection, grabbed a handful of Wells Fargo pens that she uses as a conversation starter with prospects.
Approaching one woman near a produce aisle, she handed her a pen and said, "Hi, just to let you know I work here with the Wells Fargo Bank."
"Oh really?" the woman said.
"Do you have a bank?"
"Yes."
"Are you happy with it?"
"Oh, yes."
"Well, if you ever want to use the ATM, it's over there."
"O.K, maybe next time."
Ms. Nguyen used similar lines with a half-dozen other shoppers over the next half hour. During the day, the two women estimated, they approached about 100 shoppers. Later, a man who was one of Ms. Low's first customers stopped by to say hello.
"I call them Smiley One and Smiley Two," the man said. "How many places can you get a smile when they take your money?"
