Since launching Clubcard Prices in 2020 many supermarkets have followed Tesco’s lead in offering loyalty members exclusive discounts.
But despite this increased competition, Tesco’s chief customer officer Alessandra Bellini has argued Clubcard still stands out from the sea of loyalty schemes thanks to its use of data and the way it enables the supermarket to better connect with its customers.
“Loyalty schemes have been around for many years. Everybody’s got a card. Everybody’s copying member pricing – fine. But I think it’s how you use the data, how you engage with your customers, how you’re thinking ahead,” she told Marketing Week, speaking at MadFest today (6 July).
“The mechanics may be the same but what you deliver, the value you deliver, and how you do it can be very different.”
Tesco has “unrivalled” customer data, she stated, and is continuing to look ahead and develop new ways to engage with its consumers.
Clubcard is now a “platform for digital, personal, relevant engagement”, rather than a traditional, transactional loyalty scheme, which essentially acts as a “thank you” for shopping with the supermarket.
She questioned the value of these standard propositions given consumers are members of so many retailers’ schemes.
“Do we use these enough? Do they make us change our minds about the brands we interact with, the brands we shop with? Do these actually help us feel better about those brands?” she asked.
“In 2020, we found ourselves in the company saying, it’s all very good, but we can’t carry on saying thank you for shopping. It was the time to move on,” she said, adding that Tesco needed to do something to stand out again.
The supermarket took a step back, and began looking at Clubcard “on the terms of [its] customers” and the value it could bring to them, she said.
In order to evolve the scheme, Tesco looked closely at its consumers’ needs, removing barriers like paper and having better password systems. But the most important customer need was value, and making the Clubcard scheme “really worth it”.
The mechanics may be the same but what you deliver, the value you deliver, and how you do it can be very different.
Alessandra Bellini, Tesco
Bellini and the Tesco team believed the value of the scheme for consumers had to go beyond collecting points and vouchers. It wanted the value to be apparent at shelf-edge.
The solution Tesco arrived at was Clubcard Prices, the scheme which gives Clubcard members exclusive discounts applied at the till.
The introduction prompted a moment of “internal debate”, Bellini admitted, with there being some concern about excluding a section of customers. However, it was decided that the “accessible” nature of Clubcard meant the benefits outweighed any potential risks, she said.
As well as the introduction of the exclusive discounts for members, the supermarket continued to evolve the scheme to introduce quicker voucher generation, personalised offers and additional partners.
It wasn’t that Clubcard was broken prior to the changes made by the supermarket from 2020 onwards, Bellini said, but there was a desire within the business to be “really close” to consumers.
Since making the changes, Tesco has seen increased engagement, growing from around 14 million Clubcard members to more than 21 million today. This, along with increased digitalisation, has allowed Tesco to collect more data, enabling more personalised solutions for its customers.
With these changes, notably the introduction of Clubcard Prices, Bellini claims Tesco customers now feel there is “actually money in [Clubcard]”, and can very clearly see it as a value enabler.
Bellini gave a sneak peek of the latest iteration of its ‘The Power to Lower Prices’ platform, which will be launched next week. It shows a shopper at the till singing lyrics of ‘The Power’, after he scans his Clubcard to reduce the price of this shop. Bellini called this the “thrill at the till” moment, which it wanted to showcase in the upcoming ad.
The company has also underlined the value it is providing customers through initiatives such as Clubcard Unpacked, a function similar to Spotify Wrapped, which sums up the savings members have made in the year through a break down in the app.