Clubcard targets missing customers with £150m relaunch
Tesco is staging a £150m relaunch of its Clubcard scheme which it says should add one million new members to the rewards programme.
The retailer claims that 50% of UK households already used the card and that the new promotion will take total membership to 16 million.
Starting today Clubcard holders will be able to double the value of vouchers against a range of products in-store and online. Previously vouchers were only worth face value on Tesco products but could be redeemed for up to four times their value with partners such as restaurants and theme parks.
Tesco said the products the vouchers can be used for would include clothing, baby goods, wine and airtime on its mobile phone service. A customer currently receiving £5 of Clubcard vouchers could now exchange them for £10 of ‘double up’ reward tokens, to be spent on the ranges selected by Tesco.
Details of the relaunch will be mailed out to Clubcard members later this month with their latest statement.
Tesco has recently been losing market share to rivals, though it still remains the dominant UK supermarket chain with 2,282 stores. It reported record profits in April of £3.13bn. In the UK, its market share has fallen from 31.8% in October 2007 to 30.6% currently. Asda, Sainsbury’s and Morrisons, in addition discount retailers such as German-based Aldi and Lidl, have made inroads into Tesco’s share of the market.
The Clubcard relaunch is as an effort to encourage loyalty amongs its shoppers and to move away from price cutting by the major players that has encouraged more promiscuous shopping habits by consumers.
Using the detailed shopper information that it gets from its Clubcard scheme, Tesco can target customers who are spending less at its stores and send details of relevant products and offers to them.
In the recession consumers are thought to be increasingly chasing best buys at different retailers rather than sticking to one store.
Tesco is suffering the biggest loss of customers with Asda being the chief beneficiary. Data from market research company TNS found that expenditure increased by £115m in Asda stores in Q1 2009 compared to the same period last year, and that £33m of this figure came from former Tesco shoppers.
Richard Brasher, Tesco’s marketing and commercial director, commented: “Tesco already has the most loyal customers of any supermarket and we’ve been saying ‘thank you’ for their custom for many years by giving them back billions of pounds worth of vouchers to spend with Tesco or on treating themselves with one of our specially selected partners.
“Now with customers going to greater lengths to search out the best bargains, it is even more important for Tesco to say thank you when they choose to shop with us.”