Tesco is launching a media and insights platform, opening up the wealth of customer data it collects through Clubcard and in-store insights to brands and agencies.
The closed-loop platform, called Tesco Media and Insight, powered by Dunnhumby, is designed to help suppliers and their agencies better understand changing consumer needs and develop more targeted and relevant ways to serve customers. This in turn, it hopes, will help both Tesco and its suppliers build stronger connections with customers and drive loyalty.
Tesco’s Clubcard loyalty scheme is used by more than 20 million households in the UK, providing the supermarket with a diverse and nationally representative first-party behavioural dataset. The supermarket also has 7 million regular app users, which combined with Dunnhumby’s analytical expertise, provides the retailer with a wealth of insight that it believes will help suppliers and agencies improve engagement and develop more effective propositions.
Tesco alluded to the launch when revealing its first half results in October, with CEO Ken Murphy saying it would be seeking to better monetise the vast amount of first-party data it gathers via Clubcard.
In terms of the media opportunity, Tesco claims it is able to reach 58% of the British population each week, which is higher than Sky and on a par with Facebook and Channel 4, according to head of media Nick Ashley, talking at the launch event this morning (30 November).
Tesco will offer brands five targeting options through the platform, from one-to-one personalisation through to broader mass reach campaigns.
These include targeted display and sponsored product advertising, the ability to create connected store experiences so brands can target customers across the Tesco store network, and the opportunity for brands to deliver more relevant rewards based on a shopper’s specific circumstances.
The platform will also enables advertisers to use first-party data to target key audiences away from Tesco’s digital store and create customer-led experiential propositions.
On top of this, brands can use the platform to guide product innovation. Harvard Business School professor Clayton Christensen claims over 30,000 new products are introduced around the world every year, and 95% fail. Tesco believes its customer data can transform this statistic for the brands on its platform, as they can employ it through every stage of the innovation cycle, from the identification of a customer need through to testing and launching.
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The platform has also been designed to offer brands closed-loop measurement tools so they will be able to connect what people see with what they buy. Tesco says it will be able to provide brands with a true return on spend so suppliers will be able to see the impact of the investment they’re making. The supermarket claims Tesco Media generates an average return on actual spend (ROAS) of £6.60 compared to an average of £3.80 on other channels.
Speaking to Marketing Week, Tesco’s chief customer officer Alessandra Bellini says the supermarket believes now is the right time to “reset” and look at a suite of new approaches, tools, methodologies and products to make sure the business is fit for the future.
“Externally we’ve seen the increase in ecommerce, online engagement from customers, and the digitisation of the world. Our customers are there, and we’ve seen through the pandemic that we are able to serve them there,” she explains. “We want to ensure we provide a more relevant and personalised offer to meet our customers’ changing needs.”
Tesco also believes the platform is necessary for the grocer to deliver on one of its strategic priorities, which centres around the Tesco Clubcard. The supermarket wants to have more personalised and engaging conversations with customers so they feel more “in control” of how they interact and engage with both Tesco and its supplier partners, Bellini says.
“We want customers to be slightly less passive. We want them to engage with Tesco and the more they do, the more they feel they want to… because they find something [products] that they really care about,” she adds.
“This is an evolution of what Tesco and Dunnhumby have been doing for a long time. The Tesco Clubcard has been around for over 26 years. The focus we’re now going to put around it is one that will allow us to really serve all the propositions, products and experiences that we are developing around our other strategic drivers, which are magnetic value for customers, cost savings, and convenience.”
Tesco is not the fist brand to open up its data to brands. High street retailer Boots launched a similar proposition in September, which makes use of the wealth of first-party data it collects from its 17 million Advantage Card loyalty members. The Boots Media Group is designed to help brands across a range of areas including campaign planning, creative development and measurement.