- Key insight: By offering space to a retail incubator, The Village Bank is joining a trend of opening branches to nonbank uses. Other examples include coworking spaces. meeting rooms and cafes.
- Supporting data: Village’s retail incubator comes after it established a community room in a branch in Newton, Massachusetts.
- Expert quote: “If more banks [create incubators], I think it would be hugely helpful to local businesses, local communities and to the banks themselves.” — Village CEO Joe De Vito
A small, Boston-area mutual bank intends to devote some prime space in a new branch for a retail incubator, joining a trend of banks repurposing real estate for other uses.
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The Village Bank in Newton, Massachusetts, says it will set aside 725 square feet inside its planned Wellesley branch for startup retail businesses on a rotating basis. Each business that gets selected will occupy the ground-floor space — known as The Village Shop — for a month.
The incubator idea came from a group of bank employees “brainstorming about how we could lay out a different approach to a bank branch,” according to Joe De Vito, the 116-year-old Village’s CEO.
“My initial reaction was hugely positive,” De Vito told American Banker. “I really like where this could go, and it’s totally who we are.”
The 4,300-squre-foot branch in Wellesley, a Boston suburb, is expected to open this summer. While Village has never hosted a retail operation, the $2.05 billion-asset company is no stranger to alternative branch usage. Its location in Newton Centre includes a community room.
As a traditional community bank, branches remain a critical component of Village’s business model. Wellesley will be its 11th.
“Having a physical presence in a community is huge,” De Vito said. “It’s a long-term relationship and a long-term commitment.”
Village isn’t plunging into the retail sector unassisted. The bank is developing the Wellesley retail incubator in partnership with UpNext, a boutique consulting firm that advises emerging retail brands. UpNext has worked on incubator projects throughout the Boston region.
“The platform The Village Bank is creating is a meaningful way to support local business growth,” UpNext founder and CEO Allison Yee said in a press release. “Our partnership will give shoppers a place to discover and support founder-led brands.”
Village’s planned incubator is similar to the one launched last year by Citizens Bank of Edmond in Edmond, Oklahoma. Working with the Oklahoma-based Independent Shopkeepers Association, the $417.5 million-asset Citizens
Both Village and Citizens select participating businesses through an application process. Those processes are managed by UpNext and the Independent Shopkeepers Association, respectively. Rather than generating revenue, the incubators are intended to signal community commitment and, hopefully, generate more branch visits.
The retail incubators at Village and Citizens Bank of Edmond are part of a trend that has seen banks open their branches to a growing list of nonbank activities, including meeting rooms and coworking spaces. In one of the best-known examples, the $682.9 billion-asset Capital One Financial in McLean, Virginia, operates
As for Village, it’s already mulling the possibility of additional retail incubators. “Assuming it goes the way we expect, we’ll look at doing this in other locations,” De Vito said.
The CEO of Village has emerged as an enthusiastic backer of initiatives designed to transform branches into highly trafficked meeting spaces. In particular, he is hoping more banks look into creating incubators.
“If more banks do it, I think it would be hugely helpful to local businesses, local communities and to the banks themselves,” De Vito said. “I really do hope it catches on.”
