Tesco Clubcard

The Tesco Clubcard logo.

Tesco Clubcard is the loyalty card of leading British supermarket chain Tesco. The Clubcard scheme operates in the UK, Ireland, Poland and several other countries, and in the UK market in particular has been highly successful, with over 15 million members as of 2010.

History

A new Tesco Clubcard alongside an old-style Clubcard Key fob

In 1993 Terry Leahy asked the Tesco Marketing team to investigate the potential of loyalty cards. In the past Tesco had run Green Shield Stamps as a promotional tool which rewarded people for visits and spend but gained no customer information. The initial team led by Grant Harrison, researched programmes across the world and developed a proposal which showed that a loyalty card could be very effective. The key change since the days of Green Shield Stamps was the ability to cost effectively track individual customer behaviour using a magnetic stripe card. In 1994, the man responsible for Tesco's trials, Grant Harrison, attended a conference where Clive Humby from dunnhumby was speaking. Dunnhumby had been founded in 1989 by Clive Humby and Edwina Dunn.^[1] The company, offering marketing services, had already signed clients such as Cable & Wireless and BMW. Successful trials throughout 1994 led to the Tesco board asking Harrison and Humby to present to the annual Board strategy session. The first response from the board came from Tesco's then-Chairman Lord MacLaurin, who said "What scares me about this is that you know more about my customers after three months than I know after 30 years."^[2]

In January 1995, Frank Riolfo, a former member of the Royal Army Medical Corps, attempted to blackmail Tesco, forcing the introduction of the previously trialed discount card. Threatening to inject AIDS-infected blood into stock, Riolfo demanded the company make loyalty cards available to customers. The cards, he specified, were to contain magnetic strips allowing them to secretly function as ATM cash withdrawal cards. Coded copies of the PIN code were published under his instruction in National newspapers. Clubcard was subsequently launched nationally with a Direct Marketing campaign by Evans Hunt Scott, Terry Hunt's advertising agency. Hundreds of customers, including Riolfo's wife, signed up to the scheme and collected a card. Riolfo and his wife then toured the country withdrawing cash until they were eventually caught on April 22, 1995^[3]. Frank Riolfo pleaded guilty and was jailed for six years, after appeal^[4]. Little coverage of these events remains online, although they were fictionalised by performance poet Alexander Velky as The Marketing Genius of Frank Riolfo^[5]. The loyalty card scheme was not discontinued.

David Sainsbury, then chairman of J Sainsbury plc, rejected the idea of introducing a similar scheme. However, the effect that Clubcard had on Sainsbury's sales led to the reversal of that decision, with the launch of the Sainsbury's Reward Card in June 1996.^[6]

After two slight amendments to the design of cards in the 1990s by Evans Hunt Scott's creative team, the scheme had a major relaunch in 2005 with all members being sent personalised cards and key fobs which could be scanned at the checkout, rather than swiped. The scheme was again relaunched in 2008 with all seven million members once again being sent new design cards and key fobs. The Tesco Clubcard scheme was introduced into the Republic of Ireland almost immediately after Tesco's acquisition of Power Supermarkets Limited (now Tesco Ireland), and operates in similar fashion. It is an extension of the UK scheme, not a separate scheme, so Irish Clubcards can be used in UK stores.

In 2007, Tesco Clubcard was first introduced in all Tesco Extra stores in Malaysia and later in all Tesco stores. In Malaysia, every two Ringgit Malaysia spent is 1 Clubcard point. After two weeks from the launch of Clubcard in all Tesco stores in Malaysia, there were over 800,000 applications.

The Tesco Clubcard scheme was introduced into Polish Tesco Stores in 2008, and SR Slovakia at the end of 2009. As of September 2010, these markets have 1.5m and 850,000 cardholders respectively^[7]. Though operating in a similar fashion to the UK scheme it is independent, so Irish and British Clubcards can not be used in Slovak stores. In Slovakia every one euro spent is 1 Clubcard point (excluded petrol). Clubcard was launched in the Czech Republic and Hungary in August and September 2010^[7].

Benefits

When shopping at Tesco or using Tesco services (such as services from Tesco Finance), Clubcard holders receive two points for every £1 (1 point for every €1 in Ireland) they spend. Holders can also get extra points on special offers and receive one "Green Clubcard Point" for every carrier bag they re-use (UK only, except Wales), as part of Tesco's green initiative. These points are stored and built up and at least four times a year (there are sometimes "surprise mailings") the holder receives a statement and vouchers to the value of points they have saved. (They have to have saved at least 150 points to receive a voucher). Vouchers can be spent instore on shopping, online on grocery home shopping or direct, or used on Clubcard Rewards where they can be worth three times their face value on selected Rewards in the U.K and up to four times their face value in the R.O.I.. These can be used to obtain discounted day trips, magazines, hotel breaks, restaurant tokens and many more great offers.

As part of the Clubcard 2 launch, it was announced that, from 17 August 2009, all instore and online purchases would attract double points (2 points per £1).Reports indicate that this initiative was successful in increasing the number of active cardholders from 14 million to 15 million in the market year 2009/10.^[8]

Clubcard holders are also entitled to free access to the Clubcard clubs which include: baby and toddler club. There is also a facility to save vouchers to be sent near Christmas, similar to a Christmas savings scheme.

Green Clubcard points

Green Clubcard points are earned when customers re-use bags when shopping in store (one point per bag, except Wales), or opt out of receiving bagged products when shopping online (one point per ten items delivered). They can also be earned by recycling a limited number of products, currently mobile phones and ink cartridges, through Tesco-branded recycling services. Once earned, Green Clubcard points are equal in value to normal points, but are listed separately on receipts and Clubcard statements.

'Double up'

As part of the major Clubcard relaunch, customers were able to take Clubcard vouchers into stores and 'double them up' for a number of departments. These departments included Clothing, Cosmetics Skincare and Fragrances, Wine and Champagne, Toys, Flowers and Plants, Tesco Mobile Top-Up, Tesco Instant Travel insurance and Tesco Instant Breakdown cover. In August 2009, the Back to School range, Tesco Delivery Charge (grocery) and Tesco Opticians were added on, whilst the Flowers and Plants range was taken off. You could not double up for groceries.

Double up worked in multiples of five pounds. For example, if a customer brought in a £5 Clubcard voucher, this would double up to a £10 voucher. However, if a customer brought in a £6 Clubcard voucher, it would still double up to £10, and the remaining £1 (100 points) would go back onto the Clubcard holders account. While normal Clubcard vouchers are valid for two years, double up vouchers were valid to 3 months.

Double Up has been relaunched under a different name, The Big Clubcard Voucher Exchange. The departments are slightly different. The promotion lasts until September 5.

Services

Services that take part in the Clubcard scheme:

• Tesco stores
• Tesco.com
• TescoDiets.com
• TescoEntertainment.com
• Tesco Petrol stations
• Tesco Direct
• Tesco Bank
• Tesco Telecoms
• The Nutri Centre @ Tesco
• AVIS
• E.ON UK
• Marriott Hotels - Earning Points Ended 1 April 2008^[9]
• National Tyres
• Nationwide Autocentres

Double Points are now available across most services, and products.

Privacy concerns

Some Clubcard users^[who?] have concerns about the information Tesco and dunnhumby hold and what they do with it. Every time a Clubcard is used, a copy of the store shopped in, products purchased and price paid are stored against the Clubcard account. Applicants are asked to provide personal details such as name, address and children. Tesco have stated that this is to help them pick vouchers that are relevant to the holder and also monitor trends to help product availability.^[10]

Mobile phone applications

Tesco have recently launched both an iPhone, BlackBerry and a Nokia Ovi applications so points can be collected by presenting a barcode on the handset instead of a keyfob or card. This application may in future offer more functionality including point balances and possibly special offers.^[11]. An unofficial Android application is also available. ^[12]

References

1. ^ "About us". www.dunnhumby.com. dunnhumby Limited. 2008. http://www.dunnhumby.com/uk/about-us-history-of-success. Retrieved 2008-10-12. 
2. ^ Mesure, Susie (2003-10-10). "Loyalty card costs Tesco £1bn of profits - but is worth every penny". The Independent. 
3. ^ "AIDS blackmail man is jailed". www.heraldscotland.com. The Herald. 1995. http://www.heraldscotland.com/sport/spl/aberdeen/aids-blackmail-man-is-jailed-1.656568. Retrieved 2010-09-04. 
4. ^ "FRANK RIOLFO, R v. [1996 EWCA Crim 225 (26th April, 1996)"]. http://www.bailii.org/. 1996. http://www.bailii.org/ew/cases/EWCA/Crim/1996/225.html. Retrieved 2010-09-19. 
5. ^ "Alexander Velky ...Has Doubts - The Marketing Genius of Frank Riolfo". 2011. http://hasdoubts.blogspot.com/2011/01/marketing-genius-of-frank-riolfo.html. Retrieved 2011-03-24. 
6. ^ Randall, Jeff (1996-06-23). "Sainsbury plays its loyalty card". Sunday Times (Times Newspapers). 
7. ^ ^{a b} "CZECH REPUBLIC: Tesco to launch Clubcard programme". http://www.just-food.com/news/tesco-to-launch-clubcard-programme_id112325.aspx. Retrieved 2010-09-19. 
8. ^ http://sixthsense.yougov.com/retail-reports/supermarkets/loyalty-cards.aspx?target=loyalty
9. ^ "Marriott Rewards Members can earn points with partner programmes". www.marriott.co.uk. Marriott International Inc. 2008. http://www.marriott.co.uk/Channels/globalSites/rewards/earn/programs.mi?country=UK. Retrieved 2010-02-08. 
10. ^ Rory Cellan-Jones (2007-06-18). "A journey into personal privacy". BBC News on bbc.co.uk. http://news.bbc.co.uk/2/hi/technology/6763307.stm. Retrieved 2008-06-09. "Privacy campaigners are convinced that big companies, from Google to Tesco, know too much about us - and are not careful enough with our data....While call centre staff don't have access to your data, details of all purchases on Clubcard are stored for up to two years." 
11. ^ "Nick Lansley's Technology for Tesco.com Blog". techfortesco.blogspot.com. Nick Lansley. 2010. http://techfortesco.blogspot.com/2010/02/tesco-clubcard-iphone-app-launches.html. Retrieved 2010-02-08. 
12. ^ "Tesco Clubcard - Android App on AppBrain". appbrain.com. AppBrain. 2010. http://www.appbrain.com/app/tesco-clubcard/com.clubcardapp. Retrieved 2010-10-09. 

External links

• www.dunnhumby.com
• www.tesco.com/clubcard