E-Trade is Banking on Target
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When E-Trade opened for business a decade ago, it promised clicks, not bricks. Now it's eating its online hype and partnering with retailer Target to enter the physical realm. After testing the waters in six markets, E-Trade and Target expect to install E-Trade Zones at 43 SuperTargets in nine states this year.
Each 400-square-foot kiosk is staffed by two Series 7 registered reps, and contains Web access to account information, video monitors displaying financial news and an E-Trade Bank ATM. The key benefit of the new outlets, says Robert Sterling, senior analyst at Jupiter Media Metrix, could be to help E-Trade get to larger accounts than the $25,000 portfolios of its online clientele. “By virtue of proximity, and putting a face to the brand, they can get it up to $30,000, $40,000, or more,” he says.
E-Trade's not alone in bringing brokerage services to the masses. Ameritrade recently signed up with Federated Department Stores and TD Bank provides banking services at Wal-Marts in Canada and plans to enter the U.S.
E-Trade has already opened up storefronts in New York, Denver and Boston, and it has built a national ATM network of more than 11,000 units. All ATMs at Target stores are being converted to the E-Trade brand, too.
The idea behind the E-Trade/Target deal is not new. In the 1980s, Sears Roebuck & Co. opened Dean Witter brokerage outlets in stores, but had little success, notes Dennis Ceru, director of retail brokerage and investing at Tower Group, a consulting company. “You don't go to Sears to buy money, which is what an investment is,” he says. “You equate that with a bank. You go to Sears to buy clothes, hardware, gardening supplies.”
