Work Where Work Happens


Banks, hotels use souped-up real estate to attract customers.


By Michele Chandler and Sharon Simonson

[dropcap]I[/dropcap]f Starbucks Coffee Co. created the third place, virtual banker ING Direct has perfected it. Less than a year after opening its 10,000 square-foot, 101 Post St. location in San Francisco, the three-story, skylight-lit, airy space is a hive of young adults, headphones in place, laptops humming.

Only a fraction of them will ever open ING accounts—and the pressure to do so seems minimal. But it’s easy to see why any person would spend time here: It’s largely free, for starters, including the Wi-Fi. The coffee is good and cheaper than that famous coffee house. Pastries and other edibles come from local suppliers, so you can feel good about snacking. One might even wonder why ING would undertake such expense for what seems limited recompense. But there is more going on than meets the eye.

[pullquote_right]“We think there is potential here to expand the definition of our purpose, to help create great experiences wherever work happens.” Chief Executive Jim Hackett, Steelcase Inc.[/pullquote_right]The 12 baristas are also trained bankers. Each ING Café (there are eight nationally, and San Francisco is the flagship) also has a licensed investment broker, a handful of mortgage specialists who can help a customer refinance, and associates who focus on kids’ accounts. Their other jobs include volunteering at local nonprofits and teaching children financial literacy.

Beginning in April, the café began hosting graduations for a local nonprofit that helps low-income women start and grow businesses. “We have a unique partnership with ING,” said Nicole Levine, interim chief executive for the Women’s Initiative. “The staff is incredibly supportive of our organization. They have hosted three of our graduations donating cake and making the place look beautiful. It is an incredibly inspiring event.”

She has never seen an ING worker try to sell her graduates any of its products, Levine said. But she has bumped into one of her former students at the bank’s Post Street space: The student was scheduling a meeting in one of the free ING conference rooms. “It showed the power of this partnership in that ING is supporting us using their unique services,” Levine said.

Welcome to a new world of real estate, where physical space is the software layer between customer and service provider, where repurposing is running rampant, where real property is used hard and expected to produce. Banks—not only ING but also Umpqua and Chase—are turning the stereotypical dry, dated, somber branch into an enticing place to visit and maybe hang around. Marriott International has worked with office-furniture maker Steelcase Inc. to design and outfit a new breed of hotel conference centers with high-end digital equipment and other features that put conventional hotel meeting rooms to shame. Umpqua has launched its own “Starbucks with tellers” where small firms or nonprofits also can hold meetings for free.

All of these companies are taking a page from successful retailers in a bid to please customers while catering to an increasingly mobile workforce. The U.S. has the world’s highest percentage of mobile workers with 72.2 percent not doing their jobs exclusively in an office in 2008, according to International Data Corp., a provider of global market intelligence. By the end of 2013, about 75 percent of this country’s workforce will be mobile, IDC projects.

“What’s the bottom line for ING in providing a free work environment?” said Mark Gilbreath, chief executive and founder of Palo Alto’s LiquidSpace Inc., an online office-leasing application that connects mobile workers to available workspace in banks, offices and hotels. “It’s simply to provide another valued service to their banking clients. It’s about customer or client engagement. [It] puts their real estate to work in a new context.”

The mission at ING, said Zach Beattie, the 29-year-old Café Coach who runs ING’s San Francisco shop, is to embed the bank into the community to spread the philosophy of its founder, Arkadi Kuhlmann: Money in the bank means independence of mind and spirit.

ING was founded as a virtual institution with a limited physical presence to reduce operating costs to allow the bank to pay higher interest rates to savers and not charge fees, Beattie said. But Kuhlmann knew it would still need some physical presence. Even before Capital One Financial Corp. bought the US operations of ING in early 2012, it had opened cafés in other cities and was scouting San Francisco for sites. In 2013, it will open as many as eight, smaller ING Direct Cafés in Boston where it has no physical presence now. A goal is to see if a handful of smaller locations works better than a single large one.

Photography by Chad Ziemendorf

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