Tesco is slashing its investment in Clubcard mailings by ditching the brand discount coupons, which have been a key part of the data-driven loyalty scheme since it launched over 20 years ago, for millions of Clubcard members.
The move, which is understood to be part of chief executive Dave Lewis’ ongoing cost-cutting plan, has been revealed as the supermarket starts sending out its quarterly Clubcard statements to its 16 million-plus members.
DunnHumby has run the Clubcard programme since its launch in 1995 and has developed hundreds of thousands of individually tailored coupons, based on shopper history. Of course, by ditching this insight, the mailings are far cheaper to produce.
The latest mailing contains the vouchers – in £5 denominations – based on points accrued but the focus has been shifted to get customers to spend the money on partner firms, such as Presso, Avios Best Western and P&O Cruises.
In April last year, Tesco overhauled Clubcard Boost scheme – which allowed customers to double up their voucher spend on items instore and online – by also restricting the scheme to partner outlets.
Formerly known as the ‘Double Up’, then relaunched as ‘The Clubcard Voucher Exchange’, the scheme had been running for a number of years. It was rebranded Clubcard Boost in 2013.
According to one Tesco customer services operative, the brand coupons are being axed in favour of lower prices in store. However, a different spokesman said that customers will receive the coupons “less often”.
He said: “We are cutting down on the brand coupons to ensure our prices are lower in store.”
The real reason for the cutbacks is not known, although sources say it could have something to do with Tesco failing to extract enough money from big brand owners to pay for them.
In 2013, it was reported that Tesco was leaning on brand owners to stump up hundreds of thousands of pounds to fund the Clubcard mailing programme.
At the time, it was claimed medium-sized suppliers were expected to hand over tens of thousands of pounds; big suppliers hundreds of thousands.
One sales director was quoted at the time as saying the plans were set to be a “major part of negotiations with suppliers”.
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