Humby hits out at Clubcard strategy

DunnHumby co-founder Clive Humby has launched a scathing attack on Tesco’s loyalty strategy, claiming the supermarket giant’s obsession with instore promotions is making the Clubcard scheme virtually irrelevant.
Speaking at The Great Loyalty Debate, an event co-hosted by the shopper marketing agency Hive and the Institute of Promotional Marketing, Humby accused all supermarkets of forgetting what loyalty is about. However, he reserved his deepest criticism for the Tesco scheme, which he and his wife Edwina Dunn helped to develop at DunnHumby.
At Tesco, Humby said, the problems start as soon as shoppers enter the store because they find themselves bombarded with promotions; so many, in fact, that “the consumer would be a fool to do anything but shop around”.
He added: “With so many promotions in the store, the role of coupons for loyal Tesco shoppers is massively diluted – why bother saving a 50p off coupon for Persil when there’s always a big name brand on half price?”
Humby claims Tesco marketers have forgotten the strategic purpose of Clubcard – to say “thank you” – and have become distracted by the targeting capability to send ever less relevant offers, knowing that brands will fund direct switching more than they will rewards. Clubcard becomes simply another unsolicited marketing channel, he said.
He even went as far as to claim that companies do not need a loyalty card to analyse customer data any more, maintaining that with the decline of cash, it is now easy to analyse transactions using payment card information instead.
Humby also berated the rise of “brand price match” strategies, saying: “[All they do is] tell me how much you’ve overcharged me by and offer to make it good next time.”
His criticism comes at a crucial time for Tesco, whose new boss Dave Lewis has just launched a strategic review of the entire business. Speculation is rife that the retailer could sell off DunnHumby – which as well as running the Clubcard scheme works for 400 other retailers and brands – following reports that private equity specialist TPG is eyeing up the business, valued at £2bn.
Tesco could still use DunnHumby as a supplier – and pocket the £2bn – but it would make it much easier to abandon the Clubcard scheme, estimated to cost the retailer more than £500m a year to operate.
Last week, Tesco pulled the plug on the Clubcard TV scheme after admitting take up of the service had been much lower than anticipated.