Walmart vs. Target

Several weeks after making the decision to open a branch in a new market -- and with your board behind the endeavor -- you’re nearly ready to select a site. After a thorough search, you’ve narrowed your selection to two locations; One near a successful Walmart and the other near a busy Target. But which site do you choose? And this is where the data can get tricky, if not downright misleading.

Of course, you consider your ideal prospective membership base: Among them, female Millennials with some college education – ages 27-to-44 -- are right in your sweet spot. Among this prized segment, Target appears to be the retailer-of-choice.

But wait. Even though Target is slightly favored by Millennials, the most common Walmart shopper profile is a 46-year-old female in an above-average household income of $76,000. Yes, she’s technically just outside the Millennial age range, but not by much.

A tough call that might come down to coin flip. But here’s another consideration: Turns out that loyal Walmart customers shops there more than twice as often as the loyal Target customer shops at Target. And since shopping and banking trips are so closely connected ... well, do the math.

And here’s another demographic byte to chew on.

Peter Francese, founder of American Demographics magazine, states that Millennials got the short end of the stick compared to Baby Boomers. “The first thing that saddled them was $1.5 trillion in student debt. Mortgage lenders look at them and say sorry, you’ve already got a mortgage called a student loan and we’re not able to give you another one.”

Personally, as a parent with one in college and two heading that way, that’s distressing. So maybe now the pendulum has swung toward Walmart. How do you decide?

One way is crudely simple. At Rubicon, we put down the spreadsheet and go shopping. We walk the aisles on a weekend afternoons and observe the customers. Are they our credit union members of today? And perhaps more importantly, are the pre-Millennials – aka Gen Z -- the Ideal Members of tomorrow?

While it may seem simplistic, you can learn a lot from this basic human observation and engagement. And at the end of the day, that personal connection is often what sets credit unions above and apart from their bank counterparts, as well as sets Rubicon apart from what is usual and customary in the commercial real estate industry.

Corey A. Waite is the leading commercial real estate advisor to the financial services industry. As Founder and President of Rubicon Concierge Real Estate Services, Corey works directly with senior executives coast-to-coast to deliver strategic plans and transactional services focused on optimizing the needs of employees, clients and members. You can reach the Rubicon Team at +1 (213) 462-2810.