As mentioned previously on this blog, I have been impressed by Wawa and have decided to keep an eye on the company to see what else I could learn from them. Today’s post is an update on my findings.
Those pesky cash withdrawal fees
Shortly after I moved to Philadelphia, I discovered that the ATM (or cashpoint for our UK readers) in my local Wawa did not charge the normal fee for cash withdrawals. Delighted by this find, I now call into my local Wawa whenever I need to top up my cash supplies.
Yesterday afternoon, I heard a very interesting radio piece on whyy.org about Wawa and its ATMs. On Wednesday of this week, Wawa and partner P-N-C Bank held a parade celebrating their 1-billionth surcharge-free withdrawal. Wow! That’s a big number (despite our desensitization to large numbers in the wake of the government bailout spending.)
Bringing in the customers
What a stroke of genius from Wawa! Over the past 14 years, a billion customers walked deliberately into their shops to access cash, the easiest method of spending money. (This doesn’t even begin to count other customers who came into Wawa without accessing the ATM.) Getting customers in the door is a challenge in any retail business, but getting them in the door with cash in hand is even more important.
Let’s consider this anecdotally. I visit the Wawa about every 7 to 10 days for cash. On average, I then buy something (a candy bar, a soda, a jug of milk or a 20oz. coffee) on one of out every two trips. Connecting my practices with the 1,000,000,000 fee-free withdrawals, Wawa is selling its products to about 500 million people that might otherwise shop elsewhere. Those ATMs are a great marketing scheme.
Unfortunately, I don’t have any numbers on how or if Wawa is subsiding the P-N-C Bank fees. There certainly is an argument for Wawa covering a discounted percentage of those fees. Yet it is also possible that P-N-C Bank waives those fees in exchange for being the exclusive cash point provider to Wawa. Cashpoints today, with their full-on computer screens, are mini-marketing machines themselves. P-N-C Bank might have swapped the fees for the advertising space.
My initial impressions of Wawa as being a savvy operator seem to be correct. Definitely follow this blog for further updates.