Do I Detect a Scent of Teller Line?

In these hyper-competitive times, banks are pulling out all the stops to lure customers into their branches with efforts that go well beyond simple mood lighting and modern décor. But while some stop at touch-screen technology, engaging music or even a coffee bar, one bank is offering its own breath of fresh (and fragrant) air.

Earlier this year, National Australia Bank opened a high-concept branch in Melbourne. In addition to offering free Wi-Fi, iPad stations, intelligent deposit ATMs and a children's area — much of which has become more or less standard for experimental bank branches nowadays — NAB added an olfactory component to its new store design. Scented air is pumped into the branch from a special dispensing unit out of sight from the shop floor.

According to Matt Sale, NAB's head of retailing transformation, the inaugural fragrance for the branch was a bright, fruity Persian lime and grapefruit scent. The bank also is considering testing two other options which, Sale says, "align to our brand personality."

The idea isn't to douse unsuspecting branch customers like an over-eager department store perfume salesperson, but to more subtly induce a positive, engaging experience, Sale says.

"NAB's aim is to create a level of scent that is barely noticeable, picked up by customers subconsciously," he says, adding that the bank is embracing a larger retail trend. "More and more [retailers] are switching on to the importance of creating multisensory brand experiences, particularly in store environments-and smell is a very powerful and emotive component," he says.

So-called 'fragrance branding' is quickly finding a diverse, multinational following, including high-end hotel chains like Starwood and Guoman Hotels, leisure destinations such as Legoland in the United Kingdom, and upscale retailers like Hugo Boss.

But is the olfactory angle one that more banks will pursue, or will it go the way of Smell-O-Vision at movie theaters? Does making scents, in fact, make sense?

Steve Mott, principal for the BetterBuyDesign consulting firm, believes the strategy could strike a stale note with bank customers who have allergies or severe sensitivity to smells. But the bigger issue, he says, is that only a small number of U.S. banks have the kind of customer-centric retail approach for which a multisensory strategy wouldn't feel out of place. Umpqua Holdings and the old Commerce Bancorp (now TD Bank), Mott says, are among the rare institutions to have differentiated themselves with a strategy of novel branch environments- which in the past have included playing the music of local artists, hosting community events or offering drop-in yoga classes.

"I'm not sure that 17,000 financial institutions in the United States could change 100,000 branches into interactive experiences for customers along the lines of hair salons, cigar stores and department store shopping boutiques any time soon," Mott says.

But Down Under, NAB is doing whatever it can to grab customers, even if it means catching them by the nose. "Ultimately," Sale says, "the entire concept store has been designed to enable us to better compete with other retailers-not just other banks-for our customers' time."