Axing Clubcard would be ‘suicidal’

Axing Clubcard would be 'madness'Data insight is likely to play a crucial role in new Tesco chief executive Dave Lewis’ overhaul of the retailer, with one expert branding calls for him to ditch the Clubcard loyalty scheme as “suicidal”.
Since it first started working with DunnHumby more than 20 years ago, data has grown to be one of the key drivers of the retailer’s operation, way beyond marketing, allowing Tesco to achieve huge savings in all departments, from energy costs and stock control to supplier relations and store formats.
However, some analysts have told Tesco to rein in spending on Clubcard, which is estimated to cost the retailer about £500m a year to operate, arguing that the money would be better spent on price cuts for all rather than existing customers.
Clive Black, an analyst at Shore Capital, said: “A material change in UK trading strategy cannot be dismissed, which is likely to have considerable implications for the rest of the British sector. Will Lewis keep Clubcard, Fuel Save, Price Promise and all of the other initiatives through which Tesco seeks to extol its value credentials to such poor recent effect?”
But one industry source claims ditching Clubcard would be “suicidal”. He said: “Tesco’s whole operation is underpinned by Clubcard data. After all, with DunnHumby, it did a ‘Victor Kiam’ – it liked it so much, it bought the company.
“To sideline all that insight would be suicidal. If anything, it should boost spend on Clubcard rather than throw money at price cuts. It has 17 million customers signed up to the scheme – that’s nearly a third of the UK population – if it can get them to shop more often, that’s half the job done.”
New boss Lewis is no stranger to a data-led approach. His former firm Unilever recently implemented its first enterprise data warehouse, which has enable it to build real-time customer data on a global scale to drive its entire operation.
And according to the FT, Lewis is likely to examine all the customer data for insights when he examines the Tesco brand, how it relates to current shoppers and those who no longer shop at the store.
Samuel Johar, chairman of headhunter Buchanan Harvey told the paper: “[Lewis] needs to invigorate [the brand] through a combination of advertising, marketing, the format of the stores and service.”

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  1. Axing Tesco Clubcard would be ‘suicidal’, say experts #data #directmarketing #digitalmarketing #advertising

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