Millions of people use Tesco Clubcard each week. Tesco Clubcard is the UK’s most successful loyalty card. The more you spend, using the Tesco Clubcard, the more Tesco vouchers you receive. Also Tesco Clubcard provides deals from other companies.
Tesco Clubcard - Objectives and Aims
Tesco's main objective and aim in issuing Tesco Clubcard was to retain customer loyalty, and to provide an incentive that other supermarkets were not pursuing. In practice, the customer loyalty that Tesco Clubcard generated was the main reason Tesco overtook Sainsbury as Britain’s leading grocer. But loyalty is not the only benefit generated by Tesco Clubcard. The information it provides on shopping habits is just as valuable.
Dunnhumby and Tesco Clubcard
Dunnhumby, the marketing firm that runs Tesco Clubcard, has shown a huge rise in profits and is looking overseas to sell its services to other large retailers. Tesco has a controlling stake in Dunnhumby and three directors sitting on the board.
If you use a Tesco Clubcard, Tesco can determine the time you shop, where you shop, how you pay and exactly what you buy. This allows Tesco to analyse their customer's actions in various ways and take appropriate actions. For instance:
- Shopping late at night and out-of-town could make you a target for Tesco Clubcard promotions.
- If you don’t buy bread, then Tesco can look for possible problems with their in-store bakery.
From Tesco Clubcard use, Dunnhumby itemises Tesco products using about forty different distinguishing characteristics. For instance Hovis whole-wheat bread might get labelled as “traditional” and “price sensitive”, while sushi might be classified as “adventurous” and “up market”. Of course, customers can be labelled in the same way! Fortunately, given the power of this technique, Dunnhumby do not release any personal data on individual customers.
Tesco Clubcard is not the only loyalty card
Tesco Clubcard is not the only loyalty card in town. Sainsbury's have a loyalty card scheme based on the Nectar card. But other retailers, like Asda, Lidl, and Marks & Spencer, do not have loyalty cards. Asda uses Wal-Mart software to help analyse the purchasing inclinations of its customers.
Tesco Clubcard promotion
The success of Tesco Clubcard means that it doesn't need to be promoted with fervour. In any case, it is automatically promoted every time you use the store. When you buy your shopping you will be asked if you have a card by the teller or by teller machine. If not, you will be offered one.
Tesco Clubcard vouchers
For each £1 you spend you get 1 point added to your Tesco Clubcard, which is worth 1 pence. Every few months you receive a voucher through the post. This gives you an amount to spend (in pence) equal to the number of points you have accrued. You also get vouchers offering discounts on various categories of goods, vouchers for extra points, and vouchers for prize draws. Some utility companies, like Powergen, also add points to your Clubcard for every payment made to them.
Tesco Clubcard rewards
It’s may not be worthwhile redeeming your Tesco Vouchers in-store. They are worth four times as much if you use them on Tesco Clubcard deals. With the vouchers you can get discounts on Eurostar, car rentals, wine, roadside recovery, away days, and much else.