Tyrone Stewart chats with Tesco’s Tash Whitmey, membership & loyalty director, and Alessandra Bellini, chief customer officer, about the launch of Clubcard Plus and what it means for loyalty
The way that we interact with brands and retailers and the way we show our affinity to them is constantly changing in the hyperconnected world we now live in. Loyalty schemes can go a long way toward ensuring this brand affinity – and Tesco is one of the retailers that knows all about that.
Tesco’s Clubcard launched in the UK back in 1995 and has since been introduced to countries including Ireland, Czech Republic, Slovakia, Hungary, Poland, Malaysia, and others. It will celebrate its 25th birthday in February 2020.
Over the Clubcard’s near 25-year existence, Tesco has continued to innovate and more align itself with the world transforming around it, growing to 19m UK Clubcard holders in the process. The latest iteration of this innovation has arrived in the form of Clubcard Plus, a subscription version of the popular loyalty scheme for UK customers which brings together Tesco’s store, Bank, and Mobile functions.
“We’ve had this amazing scheme called Clubcard for 25 years. We continue to evolve that and add value. It’s always been something that we want to bring our Group together. We feel that if you bring the Tesco Group together, through all of what we offer in the stores and what we can offer in Bank and Mobile, we have something that we can surface that’s unique for customers,” says Tash Whitmey, membership & loyalty director at Tesco.
“So, why are we doing it now? Because we’re constantly looking at the next evolution, the next innovation, and we felt that now is the right time to bring together the group.”
The biggest rival to Tesco’s Clubcard programme is of course the Sainsbury’s-owned Nectar loyalty card which, unlike Tesco’s, was launched by linking together the loyalty programmes of four companies in 2002. Those companies were Sainsbury’s itself, BP, Barclaycard, and Debenhams.
Despite the presence of Nectar, Tesco says it didn’t have its rivals in mind when the idea for Clubcard Plus came about.
“We have 19m customers and it’s the most generous retail loyalty scheme, in that it gives one per cent back at face value on a consistent and ongoing basis,” says Whitmey. “We are working really hard to make sure that the partners that we have as part of Clubcard continue to be valuable to our customers and then we’re digitising that scheme at its source and adding in ‘Clubcard prices’. So, we felt that the core of Clubcard and the foundations are incredibly strong, and we will continue to invest in it. This is on top of that.”
Nonetheless, the differentiation is clear: Tesco is the only one to have a subscription loyalty option. Within this, it points to its ability to combine Bank, Mobile, and stores as a further differentiating factor, as well as that it offers “10 per cent always-on” discounts on Tesco distinct brands as part of the subscription.
Even within that subscription there is a question over why there was a decision to not add a tier system like we’ve seen with platforms such as Spotify and Netflix. The reason? Simplicity being “one of the fundamental values that we look to have through what we do in our loyalty offering,” according to Whitmey.
Alessandra Bellini, chief customer officer at Tesco, adds: “We need to make sure that any of us can use it because it’s super simple. You get your two big shops, you get 10 per cent off the things you care about, double data – that’s simple, I can get my head around it. We could’ve made it more complicated, but we focus on what makes the biggest difference for people.”
It’s wanting to make this difference to people that is also forming Tesco’s plans for the future of Clubcard Plus – and, as such, it doesn’t have any real targets in terms of the number of its 19m Clubcard owners that it wants to join the Clubcard Plus subscription.
The company says it is focused on building a model that can help shoppers through Bank, Mobile, and stores, and has “made sure that the proposition that we offer to customers is what makes sense to them,” according to Bellini.
Nonetheless, the company has an idea of the levels of uptake that would make it happy but hasn’t made any solid predictions, as it’s unsure of what to expect with the unique offering. As such, it plans to wait and see how “how customers value it, how they interact with it [and] use those insights to make sure that we evolve the proposition based on what’s valuable to customers,” says Whitmey.
One thing Tesco may have to look at over the next few years is the potential for an increase in the number of people doing their grocery shopping online. The grocery retail sector is one that has yet to really be completely taken over by the digital world, with online only expected to account for 10 per cent of all grocery shopping by 2023. However, this would represent a growth of 60 per cent over five years.
Currently, the Clubcard Plus subscription benefits can only be used in-store. Tesco, though, says it is ready to adapt for the future should it be required and has little concern about Clubcard or Clubcard Plus struggling to keep up. The plan is simple: just keep listening to the customers.
“We’re adapting and adjusting to the world around us all of the time,” says Bellini. “Over 25 years of Clubcard, there has been many innovations and permutations and adjustments. It’s part of what we do. We need to look at the future, we need to make sure we stay relevant.
“The great thing about working at Tesco is that people tell you immediately how they feel about everything you do. They tell you with their feet, they tell you with their wallet, so there is no question that we’ll get the feedback that we need. It’s our job to try to predict the future and understand how we can go along with our customers for what they really need. So, we’re not concerned, but being engaged and listening to our customers will be the best way to make sure we stay like that,” concludes Bellini.