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.

 

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‘A tap is all it takes’

 

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.

 

 

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What is disruptive innovation?

Disruptive brands are innovators who have identified gaps in the market, allowing customers to have what they really want. Companies such as Airbnb and Deliveroo are well-known examples of the success that can follow. An important aspect is that they don’t start by improving existing products, rather offering an entirely different value proposition appealing towards customers who the dominate companies in the industry didn’t value or have ignored. These are brands with such potential that it fulfils unmet market needs.

New technology enables disruption, allowing companies to take risk in ever growing and developing industries. Disruptors have the ability to move fast, with companies who have been prepared to take a risk. It often solves an issue with sometimes unconventional perspectives.

What is important to remember is that disruption is generally for the benefit of the greater public. It changes integration between companies and the customer and should be embraced.

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580b57fcd9996e24bc43c529.pngA key disruptive factor of Netflix was initially it didn’t go for the core customers of their competitors, like Blockbuster who offered services Netflix didn’t provide. They targeted consumers who were overlooked by competitors and gave an alternative service at a generally lower price.

With the rise of streaming videos, Netflix was able to appeal to Blockbuster’s core customers by proving a larger amount of content, that was more convenient for a lower price. Blockbuster collapsed- allowing Netflix to rise quickly. Another reason for this growth was Blockbuster overlooking them and even refusing to acquire them for just $50 million (2) back in 2000.

 

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In a decade Spotify transitioned from a small Scandinavian start up into a global music streaming service with over a 100 million users and an estimated valuation of $8.5 billion. What set the company apart from its main competitor, Pandora, when it first launched was the fact that it allowed listeners to choose the songs they want to play and create their own playlists. It also gave users the option to use the service for free with ads, and paid subscription being an option. In the final quarter of 2018 Spotify had 96 million premium subscribers (3).

Click here for Marketing Week’s top 100 disruptive brands for 2016 and 2017.

Using scarcity to create value

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A study asked 200 people to rate chocolate chip cookies. In one jar there were 10 and in the other there were 2. The cookies from the jar with 2 in received higher ratings- despite the fact they were exactly the same. Demonstrating how scarcity plays a role without people even being aware of it. Other research from University of Nebraska confirmed that individuals with personality traits such as competitiveness and a need for uniqueness are more susceptible to scarcity marketing.

In social psychology Scarcity Principle is the urge to obtain something that a person feels that they will not be able to get in the future. Part of this is our survival instincts, but we also tend to value things that we cannot have and allows people to feel in control, as it shows an ability to control the environment around us.

Airlines, Amazon and Groupon use this principle well. Booking.com even have red font notifying how many times a hotel has been booked in the past 24 hours, if it’s in high demand and even when they run out of rooms:

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Scarcity does not work in all contexts as it simply does not appeal to all customers. To understand what impact scarcity marketing can have, it is vital to understand the psychological traits of their intended audience and what motivates them. Measuring the target audience is needed to understand the techniques to use in a marketing strategy, as by just understanding the psychological traits of customers you are in a better position to resonate with the target audience and predict the effect of a campaign before its launch.

 

British army targets millennials in new adverts

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The British army has a problem. The National Audit Office report found the number of full-time military personnel was 5.7% short of the required level, and that it would take a minimum of five years to close even part of the gap. As a result, the army has put more funding into their recruitment.

An adapted version of the well known ‘your country needs you’ remodelled for the current generation of potential recruits has been released.

 

Millennials often get a bad reputation for being self-centred and overly sensitive. The British army however, want to take a different perspective to these negative stereotypes to see the potential strength and qualities that a younger generation can add to them. Take for an example the “SELFIE ADDICTS your army needs you and you confidence”.

A key trend in millennials is the want of a job with purpose. In a recently released statement, Major Gen. Paul Nanson made it clear that their recruitment strategy is to address the potential for greatness that sits below the surface in an interview he said that “The Army sees people differently and we are proud to look beyond the stereotypes and spot the potential in young people, from compassion to self-belief,”.  He also included that “We understand the drive they have to succeed and recognize their need for a bigger sense of purpose in a job where they can do something meaningful.”

So have the army clocked onto something big here and managed to crack their marking strategy?

One important factor to keep in mind is that, who actually identifies themselves as a ‘snowflake’ or ‘phone zombie’? This could cause offence towards the target audience and have a negative impact. It has been rumoured that many members of the army have taken a disliking towards this new style of campaign and the boy used for the “snow flakes” ad has actually resigned since it was released. I am interested to see what other people feel about this so feel free to leave a comment in the section below.

 

The Cambridge Analytica Scandal

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Social media advertising is a key component today for mass scale marketing. As blanket advertising is dying off, it is vital for companies to adapt campaigns for the correct target audience. With 2.27 billion monthly active users on Facebook as of September 30, 2018 (1), it’s a specialised task to determine the intended group.

Cambridge Analytica offered a solution providing services to businesses and political parties who to wanted to use their data to change audience behaviour. It could analyse large amounts of data and used social science to identify behavioural groups to target with specific marketing material by using social media platforms such as Facebook. In 2016 the website’s founder Alexander Nix said it “was to address the vacuum in the US Republican political market that became evident after [Mitt] Romney’s defeat in 2012” in an interview with Contagious. He saw an opportunity to increase digital engagement and took it.

Through an app called thisisyourdigitallife, informed consent was used to research several hundred thousand Facebook users- saying that the results would be for academic use. Facebook’s layout allowed this app not just to collect the personal information of the people who consented for this survey, but also of all the people in those users’ Facebook social network. Information had been harvested on an unprecedented scale. However, at the time Facebook failed to alert users and took only limited steps to recover and secure the private information of more than 50 million individuals. This data was used to build a system that could profile users and target them with personalised advertisements.

This data was key influencing for political campaigns. However, it was also used as a “full-service propaganda machine” said Christopher Wylie, an ex employee and whistle blower.

Cambridge Analytica worked on Trump’s campaign for presidency. It analysed millions of data points for the most persuadable voters and their specific issues they cared about and after sending them messages to “move them to action”. In 17 states, voters were polled every day by social media and online adverts sending them messages. Cambridge Analytica claimed that it boosted the donations and voter turn out and as a result contributed to his victory.

Alexander Nix told Members of Parliament that his firm did not work for the leave vote campaign for Brexit. However, this has been strongly disputed by Arron Banks- one of the founders of Leave.EU. The Information Commissioner’s Office has made an inquiry into data and politics, with Cambridge Analytica and Facebook being a key focus. Not only this but the Electorial Commission is investigating the role of that Cambridge Analytica had in Brexit.

The UK general public were left in dark and wanted answers about what had been going on. In early 2018 both Facebook and the CEO of Cambridge Analytica, Alexander Nix, included a parliamentary inquiry on fake news: that the company did not have or use private Facebook data. However, Wylie provided evidence to UK and US authorities of a letter from Facebook’s own lawyers sent to him in August 2016, asking him to destroy any data he held that had been collected by Global Science Research, the company set up to harvest the profiles, despite Facebook saying that it removed the app in 2015 and required that the copies of the data had been destroyed.

Although its important that this technology has been identified and the truth pulled to the public eye, it does seem too late, as much of the consequences of these political campaigns have already happened not just the UK and US but India, Colombia, Kenya, Malta and Mexico. Data is what allows for modern marketing techniques to thrive, however it is important for companies to realise the full effects of what their service can do and consider the ethics behind it.

Greggs’ vegan sausage roll campaign

January has arrived, and along comes people’s new year’s resolutions, changes for self-improvement and people plastering ‘new year new me’ all over their social media. One trend that has grown in popularity since 2014 is attempting Veganuary-  meaning to try a vegan diet over January.

Demand for meat-free food increased by a staggering 987% in 2017 (1) and going vegan was predicted to be the biggest food trend in 2018 (2). Fast food chains now have growing pressure to sell vegan and plant based products. PETA released “PETA is calling on Greggs to heed this growing demand, add a vegan sausage roll to the menu, and watch the cruelty-free treats fly off the shelves”.

So what have Greggs done about this?  

First off, the leaked email. Probably one of those savvy marketing ‘accidents’ that companies do for an alternative was of attracting attention. But who cares? It was effective and enticed a devoted group of vegans to anticipate the release.

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Source: Plant Based News 

 

Next up, the surprise mock Apple-style release

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Source: inews

Poking a bit of fun at themselves, they released dramatic music that could have been in an episode of Game of Thrones, paired up with that classic white packaging along with ‘designed in Newcastle’ over the well known ‘designed in California’. This really has made an entertaining first impression.

 

 

It has even caused a tad of controversy over Twitter:

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With Greggs’ social media team responding back with a host of witty responces on their twitter account to people, including big names like Piers Morgan, its really shown that the word is out- resulting in them trending on twitter. The sales numbers over this product will come of much interest to not just me, but other fast food competitors who may be also considering to release a vegan product to their range.

The importance of creating an atmosphere in a retail store

The image that a retail company wants to project is clearly shown by the atmosphere they create within the stores by their design and decoration, and although you may not be able to define or measure it a customer will be able to feel it. When there is an enticing atmosphere to a store it not only draws customers in but also enhances their experience.

In consumer societies, such as the UK and America, customers increasingly seek more from retail shopping than just to find specific products as shopping is now an activity in its own right. It has been shown in surveys that less than a quarter of shoppers in malls actually went in there to shop for a specific item, so rather than looking for for ‘that item’ consumers often use shopping to reduce loneliness and boredom, avoid problems and obligations within their lives, seek fulfilment of their fantasies or to simply just entertain themselves. So, if it is this that motivates many consumers, this needs to be take into consideration when the store is designed.

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Some retailers, such as Hollister, that is shown in  the image above, hire designers and architects to create the ‘right’ atmosphere and spend extortionate amounts of money on things such as decorative lighting, wooden floors and special hangers. There are times when this does work, and equally there are times when is doesn’t. At the time that you get a professional designer to layout your store they will already have an idea of what the store should look like to make it be original- in there eyes. However, this can backfire as it could ironically mean that by trying to look original like every other store means your store looks like all the others trying to do this.

What I think works well is when people develop the concept of the store that they are looking for themselves. For an example, if you had a children’s store you could go all out and have a rotating floor in the middle of the store, a slide at the other going from one end of the store all the way to the exit, with excitable music in the background and have children’s characters to play with the customers. Some customers will adore it and others will think its bizarre and may even dislike it. But ultimately people will remember your store and it’s true originality.

You can just provide some entertainment value to customers. Just like how a comical advert entertains people for long enough to process a message through, a store can entertain customers for long enough so that they purchase their goods. For an example, I have noticed that in a Waterstones store there was a section where customers could sit down, play and read. This attracts families so that they are able to genuinely enjoy their experience and linger in the store. When you take in mind that customers can easily shop from the comfort of their own home, it is important that the retail store is a special place that is worth the time going to.