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Thursday, 1 May 2014

Shopper Loyalty Part 3: The end of Clubcard?

Will Tesco axe Clubcard? I know, it is an absurd suggestion. Having spent twenty years building a veritable industry of activity around it, how could Tesco possibly abandon its golden child? Unthinkable.

Yesterday, Morrisons 
announced £1billion of price cuts over the next three years focused on basic products. Their message: the gap between mainstream retail and discounters is too great and must be closed to stem the loss customers: downplay like for like sales, focus on volumes.  Shoppers want value today, delivered with simplicity and are prepared to leave Morrisons to find it elsewhere.

Assuming these price cuts are for real, Tesco will have to respond, but how? Where can they find savings to fund continued price investments? A clue to the answer may lie in Canada, where earlier this week Safeway abandoned its loyalty card. 

According to Jim Tierney on Loyalty360:
"As of April 4, Safeway Canada eliminated the store’s actual loyalty card and extended the program savings to anyone, regardless of whether they were members of the program..Spokesperson John Graham said "Discounted items—an average of 4,500 per week—will now be available to all customers......We introduced card-free savings at Safeway, the intent is to offer everyone the lowest prices every day with no more card. The ability to carry one less card is seen as a greater convenience for our customers. A large percentage of our shoppers had used the club card. It’s been a fundamental part of the way we offer savings.” Graham said the initial early feedback has been very positive among customers. “The research and feedback we had over the years showed that some customers had a preference for not requiring a card”

Unthinkable? But then we live in strange times and thinking the unthinkable is not as dumb as it sounds. Don't be surprised if you hear: "One less card, one thousand lower prices. Every little helps: that's Tesco" 

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