Tesco boss Dave Lewis has confirmed that the retail giant is to splash the cash on its Clubcard loyalty scheme as part of plans to add “more value and connectivity” across its grocery, banking and mobile businesses.
However, Lewis was quick to dismiss a report in The Sunday Times that the company was planning Amazon Prime-style benefits. Instead, he insisted the decision was more about encouraging customers to sign up to more than one Tesco service as this segment provides greater lifetime value.
He said: “Where the [Sunday Times] comment comes from is when we talk to customers about Tesco, the whole Tesco, those customers that have a grocery relationship with us but also have a mobile relationship with us, also have financial services, are among our most loyal and indeed have a greater lifetime value to Tesco.
“One of the things we’re interested in is how we can add more value and connectivity. That’s what you’re going to see from us, you’ll see us investing in Clubcard.”
At the heart of the plan is the Clubcard app, which was relaunched in 2017 with what the company claimed were “significant improvements”, while the physical cards became contactless.
Tesco says it has seen a 34% increase in activity on its loyalty scheme – shoppers claiming or redeeming loyalty points – over the past year alone. This has been helped in part by the launch of the “faster vouchers” scheme, which allows customers to request vouchers online or via the Clubcard app without having to wait for the quarterly mailings to arrive.
However, the firm will no doubt be aiming to boost downloads of the app, which total only 1.2 million, compared to the 15 million cards in circulation.
Lewis added: “You’ll see more from us in the loyalty space. We have simplified and digitised the offer, now we can start to actually do more things with it.”
Tesco’s full-year pre-tax profits have jumped 28% to £1.7bn, with UK same store sales rising 1.7%; group sales were up 11.5% to £56.9bn.
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