The significance of the Tesco Clubcard

In 1994 Tesco had an idea that would revolutionise customer loyalty all together. This being, the introduction of the now well known, Tesco Clubcard.

Loyalty cards were nothing new at this point of time, but what made Tesco a pioneer in this game was not about trying to get customers to change their brands, but but rewarding loyal customers at the till. Not only did this this give the customer a sense of appreciation for committing more to the Tesco brand, but more people put items in their shop and returned to the store over other rivals to get more points on their card.

Problems

There wasn’t speculation about the promotion working before the launch; but rather what will happen if all customers do it and the industry be less profitable. Despite this setback, they went ahead with the issues of:

1. The amount of data to handle with the basic technology at the time
2. Staff training
3. Printing the plastic for 20 million cards

Benefits

This changed the strategy of Tesco and demonstrated the importance of frequency of shoppers. By allowing a direct marketing channel to consumers, Tesco was able to have access to more data and in turn run the business better.

So why did this make such a big impact? 

Terry Hunt, formerly in charge of Tesco’s direct marketing agency at the time, said “It was the first time a mass retailer could talk to individual customers on a personal level”. Since the release, every major food retailer in the UK gives their own equivalent of the Clubcard,  thus showing how it reformed consumer loyalty.