Tesco has just announced a 10% fall in group profits to £1.6bn. The retailer’s share price is already depressed and chief executive Philip Clarke has put the brakes on opening new stores while existing ones are spruced up.
Looks like he’s applying the same logic to Clubcard, the loyalty scheme Tesco has doggedly maintained despite its huge cost.
Tesco is planning a brand extension called Clubcard Play, recruiting managers for the yet-to-be launched service aimed at giving Clubcard holders ‘useful, fun access to their own data’.
Now, it’s not often we get to see the words ‘data’ and ‘fun’ in the same sentence. As engagement propositions go, allowing consumers access to their transactional data isn’t quite up there with free tickets to see Adele or even double Clubcard points.
But in launching Clubcard Play, Britain’s biggest grocer can’t be accused of missing an opportunity: Midata, the government-sponsored plan to encourage brands to give consumers access to their transaction records, will become mandatory next year.
Cynics will see Clubcard Play as a defensive move against an initiative the British Retail Consortium describes as an 'additional burden' on retailers and one that offers consumers 'little benefit'.
Yet if any brand was to make a virtue out of such a necessity, it would be Tesco. Since Clubcard’s debut back in 1995, Tesco has mined the gold in the scheme by selling its data back to suppliers. Now it is seeing diamonds in that same data.
Rivals take note. Sainsbury’s, we have no doubt, is working on its own Midata scheme with Nectar.
The challenge for Tesco will be to make the consumer – the right, elusive sort, not those who habitually respond to offers and games - bother to do something with their data.
But by investing in Clubcard Play now, Tesco is upping its personalisation game to ensure consumers won’t see any point in passing their data to another brand’s application.
At the very least, whatever the long term prognosis on Clubcard, the new scheme will provide reasons to engage once more with the Tesco brand, in a richer, less passive way than before.
Noelle McElhatton is editor of Marketing
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