tesco clubcard case study

‘We had to make sure it didn’t fall on its arse’: How Tesco revolutionised loyalty with Clubcard

The Inside Story: In the first of a new series, Marketing Week looks at how Tesco Clubcard transformed retailing, shopping and marketing forever, as told by the people who were there at its conception.

However, Tesco would in fact need a lot of help and over the course of the next 16 years the duo would be central to building the UK’s first supermarket loyalty card, Clubcard, which would irreversibly change the marketing landscape for retailers, brands and customers.

But first the couple got to work with their data analysis company of 30 people, Dunnhumby, crunching the numbers. In three months they had a quote: £250,000 over 10 weeks would be all they needed to run the trial – significantly less that Tesco’s own £50m in three years estimate.

They presented their case to Tesco’s Grant Harrison, who was leading on Clubcard, but before they’d finished the meeting it became clear they were going to have to take it to the top.

The day they presented to the board has now become a legendary moment for Dunn and Humby. After they had finished a “deathly hush” descended on the group of executives.

Humby recalls: “Everyone was waiting to break the silence and suddenly Tesco’s chairman, Lord Ian MacLaurin, said, ‘Well, this really worries me because you seem to know more about my business in three months than I’ve learned in 30 years’.”

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A critical analysis of customer loyalty and customer satisfaction - a case study on Tesco Club Card

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Analyzing the Impact of Supermarket Promotions: A Case Study Using Tesco Clubcard Data in the UK

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The paper demonstrates the benefits of the analysis of loyalty card data for identifying promotional impacts and ensuring that retailers and their suppliers choose promotional strategies that result in overall category growth rather than cannibalisation.

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Felgate, M., Fearne, A. (2015). Analyzing the Impact of Supermarket Promotions: A Case Study Using Tesco Clubcard Data in the UK. In: Dato-on, M. (eds) The Sustainable Global Marketplace. Developments in Marketing Science: Proceedings of the Academy of Marketing Science. Springer, Cham. https://doi.org/10.1007/978-3-319-10873-5_277

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Building brand webs: Customer relationship management through the Tesco Clubcard loyalty scheme

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What is Life

Case Study – Tesco, Dunnhumby and the launch of Clubcard

This short case study tells the story of how Tesco and its marketing data analytics consultancy partner Dunnhumby used Big Data to re-engineer the UK Supermarket Sector in the 1990s and 2000s.  Some years before the term ‘Big Data’ first entered popular usage.

Timing and background

The year is 1993.  Four years after Tim Berners-Lee proposed the concept of ‘the Internet’ and five years before Larry Page and Sergey Brin founded Google.  Whilst the enabling technology for the Internet had been in place for many years, it was Berners-Lee who first started to demonstrate the capability, to meet his own project requirements to share information.  His proposition was simple:  Create a technology platform which in concept could allow any data to be shared between anyone or anything.  By 1993, bandwidth was still limited and error-prone, and processing and server capacity was limited and – relative to today – expensive.  But early adopters like Jeff Bezos with his Amazon ‘bookstore’  had already seen the opportunity [1] .   Investors, analysts and technologists were similarly excited:  What would a world of effectively limitless and frictionless connectivity, data access and developing processing power look like?

The UK supermarket sector

In 1993 the UK supermarket sector was led by Sainsbury’s with the highest market share, followed by Tesco, Asda, Morrisons and Waitrose respectively.  There were also many small independents, and Aldi and Lidl had yet to enter the market.   Whilst the players had different brand positionings [2] , in reality the product offerings were quite similar, customers had almost zero switching costs and – crucially – customers had plenty comparative data [3] :  They could simply switch to a competitor down the street if they were unhappy.  As a result, margins were thin and competition was fierce.  Advertising was via traditional TV and press channels and adverts, billboards and Public Relations.

The opportunity

Terry Leahy, then marketing director  at Tesco, knew instinctively that the Internet would bring step-changes for retailers like Tesco.  So, he asked his marketing team to investigate potential loyalty card implementations and to review the existing, largely non-automated, market.  Again, loyalty schemes were not new, but Leahy and others knew that some combination of Internet connectivity (data access) to link customer purchase actions and habits electronically and really quickly – in ‘real-time’ – and to respond to them with flexible and responsive product promotion and targeting could yield returns.

Joining the dots

Clive Humby, a mathematician, and his wife Edwina Dunn had set up their marketing data analytics company in 1989 and were already working with companies like electronics and communications giant Cable & Wireless and car company BMW when they were ‘spotted’ presenting at a marketing conference by Grant Harrison, the lead project manager at the time for Clubcard.  Dunnhumby was invited to partner on development.  Tesco was ambitious to see its new Clubcard venture work – or at least learn why it would not – so the company, with Dunnhumby moved forward quickly with a low-risk pilot in five stores, soon to be 14.  Leahy and the Board were also keen to seize first-mover advantage; whilst the early internet had many weaknesses, they knew that by dint of simple human endeavour and natural evolution that it would in time mature into a standardised, reliable and cheap data communications platform.

Secret sauce – tuning the numbers

The idea behind Clubcard was simple:  The more that customers spent, the more they would be ‘rewarded’ and ‘thanked’; the ‘thank you’ was a key part of the marketing and promotional strategy often forgotten by commentators and analysts.  Clubcard catalysed a kind of ‘virtuous circle’ effect similar to the so-called Amazon Flywheel concept.   Being both analytical and a mathematician (he had previously worked at the data consultancy CACI) Humby knew that he had to test and hone the results, particularly how much money to give off on promotions.  He worked out that 1% would work and stimulated repeat buying but that 2%, at the time, actually caused the project not to pay for itself.  He was also well familiar with the ‘multiplier effect’: Just one more purchase per visit per customer would result in millions of increased turnover.  And he also knew that turnover was not the important point on its own – what mattered was growth and the opportunity for increased revenue – increased profitability and growth numbers were what the City was looking for in its stock valuations.

Integrated marketing

Another aspect of the Clubcard model was that traditional ‘snail mail’ closed the promotions loop – customers were sent vouchers…they went shopping…they were sent more vouchers…they went shopping again.  Tesco also knew that they had to invent new shop models, particularly smaller format Tesco Express stores, that catered to local customer catchments and demographics.  The key point here is that Tesco understood that its operations and marketing needed to work as an integrated end-to-end process.  Another case of joining the dots.

Implementation

Developing and rolling-out Clubcard was a classic ‘Advanced Project Management’ exercise:  A lot of unproven Point-of-Sale (PoS) technology; unknowable – but partially predictable – responses from customers; the need for dynamic pricing in order to manage revenue-against-growth-against margins; the data ethics concerns and regulatory/legal risks of mass-collection of customer data; printing and distributing millions of plastic cards; maintenance and update of customer databases.  With all of this complexity some may wonder how the project succeeded:  The answer was: (i) Professional, proven, experienced project management resourcing; (ii) Chunking-down the work to manageable and self-contained sub-projects and, (iii) Clear communications both within sub-projects and appropriate cross-project information and data exchange.

Being data-driven

Tesco and other organisations will be clinical in keeping base-level data clean:  Customer address; purchase history; purchase-location history.  Based on this simple initial set of data it is relatively easy to infer additional meta-data (data about data) such as individual customer demographics (age band, income band, gender, education level etc) and so-called event information (births, new homes etc).  But even with this information, it is no mean task to determine exactly what could and should – and should not – be done with this data.  Understanding the data soon becomes beyond the capabilities of traditional computer processing, even with sampling and the availability of the most sophisticated toolkit of standard statistical tests.  Hence the need for so-called ‘AI’ algorithms and machine learning – proprietary information that Tesco and others keep closely guarded for good and valid reasons.

The outcome

Clubcard helped Tesco in three measurable aspects: (i) It helped the company leapfrog Sainsbury’s to become number one in the UK supermarket sector; (ii) It led to a dramatic increase in financial turnover, and (iii) It helped towards a three-fold increase in stock price [4] .  The fundamental step-change that Clubcard yielded can though maybe be best summed up by a quote from Ian Maclaurin, Tesco’s Chairman in 1994, who, after a board presentation from Dunnhumby remarked: “You know more about my customers in three months than I know in 30 years.”

Clubcard now – and the future

Clubcard no longer provides such an advantage as it did when it was launched in 1995, but Tesco still benefits from the after-glow of first-mover advantage and the concentration of expertise and experience that engenders.  The challenge now for retailers is how to rebalance the often dry online transactional experience with the physical bricks-and-mortar experience to provide a richer overall shopping experience  for customers.  This is a hard task for companies, society and governments even.  But one that is now being investigated via ventures such as till-less shops (Amazon Fresh and now Tesco Express pilots) and other more far-reaching initiatives such as Facebook’s attempt to catalyse and lead market growth of the so called Metaverse.

“Scoring Points – How Tesco continues to win customer loyalty”.  Clive Humby, Terry Hunt, Tim Philips (Kogan Page, 2007).

“Omnichannel Retail – how to build winning stores in a digital world”.  Tim Mason, Miya Knights (Kogan Page, 2019).

“Big Data Demystified – how to use Big Data, data science and AI to make better business decisions and gain competitive advantage”.  David Stephenson (FT Publishing, 2018).

“Business at the Speed of Thought – succeeding in the digital economy”.  Bill Gates (Penguin Business, 1999).

Notes [1] Bezos formally founded Amazon in July 1994, advising his early stage and family investors that there was a high likelihood of failure (!)

[2] It is a gross simplification, but Sainsbury’s broadly communicated ‘quality’ whilst Tesco sold itself on the idea of reducing the cost of the weekly shop through the message of ‘value-for-money’:  Quality at a similar level to Sainsbury’s at a price comparative to Asda.  This was later developed via iconic advertising popularised in TV advertising by famous English comedian and actor Dudley Moore.

[3] Customers’ could compare the costs of their weekly shops item-by-item.  And as ever there was regular sharing of information about price hikes or discounts and offers between friends and between neighbours ‘over the garden fence’.

[4] The increase in stock price was also partially attributable to other factors such as general economic growth in the UK at the time and the so-called ‘Internet dividend’ discounted into many stock prices.

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Please note you do not have access to teaching notes, grocery loyalty: tesco clubcard and its impact on loyalty.

British Food Journal

ISSN : 0007-070X

Article publication date: 1 December 2006

The aim of the research is to identify the impact of the Tesco Clubcard on customer loyalty. The secondary aim is to contrast customer perceptions of the Clubcard, staff and “feeling valued” to identify which factor has the greater impact on customer loyalty to store.

Design/methodology/approach

Quantitative analysis was used based on 60 questionnaires conducted with randomly selected customers in Tesco Metro Dundee in 2005. Tesco were not involved in the research other than to provide approval at a store level for the research to take place outside their premises.

A positive moderate relationship was found r =0.388, p =0.01 between the owning of a Clubcard and loyalty to store. It was also found that there was a positive moderate relationship between the Clubcard returns and customer loyalty, with r =0.334, p =0.01. The research, however, found no relationship between loyalty and customers feeling more valued by Tesco, nor did the research reveal a significant relationship between Tesco staff and customer loyalty.

Research limitations/implications

The research is restricted in so far as it only considers Tesco Clubcard in the grocery retail sector and as it is an exploratory study the research is limited in so far as the number of participants is only 60. A further limitation surrounds the issue of generalisability as only one Tesco retail outlet in Dundee was used. Further research needs to include other Tesco formats and contrast with grocery retailers who do not use loyalty cards.

Practical implications

It is suggested that Tesco consumers are influenced by having a loyalty card in so far as it contributes to making them loyal. However, other factors need to compliment such a card, with consumers seeing the Tesco “provision” as inter‐related.

Originality/value

The paper is useful to both practitioners and academics in the fields of relationship marketing and loyalty. The research provides some initial insight into consumer perspectives in the value of loyalty cards.

• Loyalty schemes
• Customer loyalty
• Supermarkets

Turner, J.J. and Wilson, K. (2006), "Grocery loyalty: Tesco Clubcard and its impact on loyalty", British Food Journal , Vol. 108 No. 11, pp. 958-964. https://doi.org/10.1108/00070700610709995

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

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Brands Update - May 2023 – 2 of 9 Insights

Lidl v Tesco: key learnings

• In-depth analysis

The case illustrates the importance of keeping records of why a trade mark application was filed and how logo and figurative marks were created. It also illustrates the potential scope of passing off and copyright infringement claims.

What has happened?

• The High Court has issued its decision in the Lidl v Tesco case concerning Lidl's objection to Tesco's Clubcard Prices logo.

The case concerned Tesco's use of a yellow circle in a blue square for its loyalty scheme, Clubcard Prices, which Lidl claimed infringed its trade marks, and constituted passing off and copyright infringement. The Lidl logo also consists of a yellow circle (but with a red outline) in a blue square. It is registered as several trade marks in the UK, including with the word Lidl (called the mark with text), and without the word Lidl (called the wordless mark).

• Interestingly, Lidl did not bring a likelihood of confusion-based trade mark infringement claim, but a reputation-based claim. The court accepted the extensive evidence of the reputation of Lidl's logos. It held that the Tesco and Lidl logos were similar, despite some containing different word elements. Any differences in word elements did not extinguish the strong similarity conveyed by the logos' backgrounds. The court concluded that the use of the Tesco logos took unfair advantage of the reputation of the Lidl marks, in particular the value proposition conveyed by those marks. It was also detrimental to the distinctive character of the Lidl marks. 
• There was a small victory for Tesco in that it was able to invalidate some of Lidl's trade mark registrations for the wordless mark on the basis that they were applied for in bad faith (as a defensive weapon to use against others and to circumvent the proof of use requirements for registrations more than 5 years old). However, this did not alter the overall outcome of the case. 
• Importantly, at an earlier hearing, the Court of Appeal had held that the objective circumstances raised by Tesco were sufficient to create a rebuttable presumption of lack of good faith such that the burden of proving no bad faith now passed to Lidl. Lidl was not able to explain the rationale for the initial or repeat filings and so its registrations were invalidated (except for a 2021 registration, which survived). 
• Lidl's claim in passing off was passing off as to equivalence rather than trade origin. Lidl was able to successfully argue that a substantial number of customers would be misled to believe that the Tesco Clubcard Price was the same/lower than the Lidl price for the equivalent goods. That mistaken belief would deceive consumers and cause damage to Lidl because price sensitive shoppers would switch from Lidl to Tesco. 
• Lidl also won on copyright infringement. Given the degree of similarity between the logos and the fact that Tesco had access to the Lidl logos, the burden of proving lack of copying passed to Tesco. It was unable to discharge that burden. 

What does this mean for brand owners?

• The case illustrates that brand owners must be careful not to stray too close to their competitors' marks even if those marks consist of seemingly commonplace and banal elements. Simply adding different words to a mark might not be sufficient to avoid a finding of trade mark infringement.
• It also illustrates the importance of creating and maintaining records to justify why particular trade mark applications were filed (to rebut potential bad faith arguments). This is particularly so for repeat filings and where a mark might not be used in the form in which it was registered (including where it might be used as a component part of another mark) or where there are other unusual circumstances.
• Brand owners should not assume that they will be deemed to have filed an application in good faith just because they subsequently use the mark in question. Bad faith and use are different issues. Where there might not have been an intention to use a particular mark at the time of filing, but use is later commenced, a new filing might be merited.
• Protecting component parts of complex marks can sometimes be merited. Careful consideration should be given before any filing particularly as to whether and how easy it will be to prove use and any bad faith angles.

Passing off is not always as to trade origin. It can also be as to equivalence or false endorsement. It is a potentially wide tort that can sometimes go beyond a traditional trade mark infringement claim. This risk should be factored into the trade mark clearance process. 

Copyright can subsist in what some might view as banal logos. Brand owners should keep detailed records as to the genesis of any logo or figurative element of a brand to corroborate lack of copying. The risk of a copyright infringement claim should also be factored into the trade mark clearance process.

Want to know more? 

Trade mark infringement.

Lidl sued Tesco for trade mark infringement relying on a reputation-based claim under section 10(3) of the Trade Marks Act 1994. 

Lidl was able to provide substantial evidence that its marks had a significant reputation for supermarket services in the UK. 

The court considered Tesco's logos to be similar to both Lidl's wordless mark and its mark with text. This was despite the fact that Tesco's logos were nearly always used with words. The court held that visual similarity was key, the logos all being primarily viewed visually by supermarket shoppers. Any differences in word elements did not extinguish the strong similarity conveyed by the logos' backgrounds. Supermarket shoppers would be likely to focus on those backgrounds (the word elements largely comprising of promotional statements or the words Tesco or Lidl). This conclusion was reached by virtue of external reports and customer feedback put forward by Lidl. 

Although confusion was not an element to be proved, there was clear evidence of both origin and price match confusion/association, together with evidence that Tesco's employees also appreciated the potential for confusion, which fortified the findings of similarity. 

Lidl submitted strong evidence (eg surveys and witness statements of consumers) as to the link in consumers' minds between the Tesco logos and the Lidl marks.

The court concluded that the use of the Tesco logos takes unfair advantage of the fame of the Lidl logos, as Tesco benefits from the value proposition conveyed by the Lidl logos. Such use was also detrimental to the distinctive character of Lidl's logos as it would dilute the latter's uniqueness (as evidenced by the fact that Lidl was compelled to undertake corrective advertising).  Accordingly, trade mark infringement was established. 

Trade mark invalidity 

By way of counterclaim, Tesco sought a declaration of invalidity against a number of registrations for Lidl's wordless mark, on the grounds of non-use, non-distinctiveness and/or bad faith. 

Non-use and distinctiveness

The Court dismissed the non-use arguments, finding that the wordless mark had been put to genuine used by virtue of the mark with text, as consumers would (at least in the last few years) consider both iterations as originating from Lidl (applying the case of Specsavers v Asda ). 

The Court also dismissed the non-distinctiveness argument as the evidence showed that the specific combination of simple geometric shapes and primary contrasting colours was memorable and distinctive of trade origin for Lidl's logo. 

Tesco counterclaimed that Lidl had no genuine intention to use its wordless mark registrations and that they had therefore been applied for in bad faith, on the basis that:

• Lidl had applied for the wordless marks as a defensive weapon, solely to use against others and to widen its monopoly
• Lidl had filed successive applications for the wordless marks to circumvent the rules on proving use (so-called ever-greening). 

Importantly, at an earlier hearing, the Court of Appeal had held that the objective circumstances raised by Tesco were sufficient to create a rebuttable presumption of lack of good faith by Lidl such that it was now for Lidl to provide a plausible explanation of its objectives and commercial logic. Those circumstances were the combination of:

• Repeat filings 
• The assertion that Lidl had had no intention, at the time of filing the original wordless application, of using the wordless mark 
• The fact that that Lidl had never used the wordless mark. 

Lidl was not able to explain the rationale for the repeat filings (except for a 2021 registration which therefore survived). The court therefore had no option but to find bad faith and invalidate the registrations. Key findings of the court were as follows:

• A finding of actual use is not sufficient to protect against a finding of bad faith. The fact that a registered mark is later found to have been used as a component part of another mark does not (without more) evidence the existence of the necessary intention to use at the time of filing.
• Lidl's evidence and arguments did not address why the wordless mark was originally filed. Likewise, there was no evidence that Lidl knew or thought that it was using the wordless mark by using the mark with text. That the original wordless mark was filed as a legal weapon was therefore a permissible inference from the evidence. 
• Lidl was unable to explain why later wordless applications duplicated (at least, in part) the goods and services of earlier applications. 
• A 2021 registration for the wordless mark survived since there was evidence that, by that point, Lidl genuinely believed that use of the mark with text also constituted use of the wordless mark as well as evidence that the wordless mark enjoyed its own reputation. The fact that there was a 13-year gap in filings by the time the 2021 registration had been filed also suggested that Lidl did not have an ever-greening strategy by that point.

The case is consistent with previous rulings on bad faith including the EU General Court's Monopoly ruling ( see our article here ). What is interesting is that the burden of proof shifted to Lidl to prove good faith. That was fatal to Lidl and might well be to others who have no records to justify why a particular trade mark application was filed. 

This raises the question of how much evidence the other side must produce for the burden to shift in this way. Clearly, this case was somewhat unusual in that Lidl's wordless logo is a component part of another mark (just as the Specsavers logo and the Levi's red tab). Proving an intention to use it (or proving that Lidl thought that use of the word with text also constituted use of the wordless logo) was always going to be difficult, absent any records. 

Whether the burden of proof would have shifted to Lidl without that factor (ie just on the basis of lack of use and repeat filings or even just one of these) is unclear. Either way, trade mark owners are advised to create and maintain detailed records as to why particular trade mark applications have been filed to help fend off any bad faith allegations. These will be particularly important should the burden of proving no bad faith shift to them. 

The case also illustrates that brand owners should not assume that they will be deemed to have filed an application in good faith just because they have subsequently used the mark in question. Where there was no genuine intention to use a particular mark initially (or there is no evidence as to that intention), then refiling for a mark might be appropriate if there is now a desire to put that mark into use. The subsequent application should be deemed to have been filed in good faith even if the earlier one(s) was/were not. 

Passing off 

Lidl's claim of passing off was as to equivalence (price and value) rather than trade origin. The Court relied on its findings and evaluation of evidence from the trade mark claim. Specifically, goodwill was found because a UK public would recognise Lidl's marks, evincing its reputation as a discount supermarket. 

Lidl was able to successfully argue that a substantial number of customers would be misled to believe that the Tesco Clubcard Price was the same/lower than the Lidl price for the equivalent goods. That mistaken belief would deceive consumers and cause damage to Lidl because price sensitive shoppers would switch from Lidl to Tesco. 

The decision shows the potential scope of a passing off claim. 

Copyright infringement

Lidl's mark with text was considered an artistic work, capable of copyright protection under sections 1 and 4 of the Copyright, Designs and Patents Act 1988. It was treated as a graphic work, which is protected "irrespective of artistic quality" and the Court emphasised that the scope of protection is a question of fact, not degree. 

Lidl's mark was also found to be original, as the act of bringing together the Lidl text with the yellow circle and the blue background was deemed to involve the exercise of intellectual creation, involving the expression of free choice. Indeed, Tesco's own evidence as to the various combinations of apparently basic shapes and colours considered by its own designers demonstrated the creative freedoms in relation to the sign. 

Given the degree of similarity between the signs and the fact that Tesco had access to the Lidl logos, the burden of proof on showing there was no copying passed to Tesco. Unable to discharge that burden, having also failed to obtain evidence from the external design agency which helped create the Clubcard Prices logo, Tesco was found to have copied a substantial part of Lidl’s mark with text, and thus infringed Lidl’s copyright.

This is an important reminder that copyright can subsist in seemingly banal logos and of the importance of having detailed records as to the genesis of any logo or figurative element of a trade mark to corroborate lack of copying. 

This article was co-authored by Kachenka Pribanova.

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Clubcard data in driving seat for Tesco growth strategy

October 6, 2021 9:40 am

The retailer credits the expansion of the Aldi Price Match scheme, the roll-out of Clubcard Prices in Express stores, the relaunch of Low Everyday Prices on 1,600 products and its burgeoning digital operation as major driving forces.

Tesco said: “We have created one of the leading digital retail platforms in the UK. The combination of Clubcard – used by more than 20 million households in the UK alone – with our online grocery business, our nearly 7 million regular app users and DunnHumby’s analytical expertise creates a powerful digital capability.

“It gives us the ability to manage vast amounts of data, gain unique insights and respond quickly and effectively. When this is brought together with our unrivalled physical network, it gives us a competitive advantage that is hard to replicate.”

As part of the overhaul, Tesco said customers will be able to choose how, when and where they shop, across its full range of products and services, and how they earn and use the rewards they accumulate.

It added: “Clubcard, and our digital platform more broadly, will also be at the heart of a reinvention of our supplier strategy. It gives us the ability to access incremental income streams by providing suppliers with the opportunity to market their products in more targeted ways such as advertising on our grocery home shopping website or offering a tailored range of additional products direct to specific customers.”

The retailer has also identified potential savings of more than £1bn “through simplification across areas such as goods not for resale, improved productivity, optimisation of our delivery network and central overheads” .

It expects to deliver these savings over the next three years, predominantly through incremental changes to existing operations.

Tesco chief executive Ken Murphy commented: “Against a backdrop of profound change, Tesco has many unique advantages. The scale and reach of our store estate and online operations are unmatched in the UK. Our ability to reward loyalty through Clubcard enhances our relationship with customers. Our world-class food retail expertise combined with our strong supplier partnerships ensures we can offer our customers great value and quality, removing reasons to shop elsewhere.

“Together, these strengths mean that Tesco can anticipate and respond to changes in the market, meeting customers’ needs better than anyone.

“(Our new) strategic priorities will enable us to build on these advantages to stay competitive, accelerate growth and generate between £1.4bn and £1.8bn retail free cash flow per year. These priorities will ensure we do the basics brilliantly, operate as efficiently as possible and grow our business by building unbeatable digital, convenience and loyalty platforms.”

Related stories DunnHumby lifer Sandra Stanley lands global data job UK retailers ‘sitting on £1.7bn data and media cash cow’ New Tesco boss: CX is far more crucial than marketing Tesco reprises ‘Clubcard Prices’ in fresh swipe at rivals Tesco reveals plan to launch trials of drone deliveries Tesco joins with Crisis to help homeless stay connected Tesco beefs up Clubcard Plus with free online delivery Tesco praised and slated as public delivers virus verdict Clubcard spend cut as millions lose brand vouchers

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Tesco Marketing Strategy 2024: A Case Study

Tesco, a global retail company specializing in groceries, serves millions of customers worldwide. In line with their commitment to providing exceptional shopping experiences, Tesco has developed a comprehensive marketing strategy for 2024 that encompasses various key elements, including customer segmentation, brand positioning, promotional campaigns, and an omnichannel strategy. By incorporating these strategies, Tesco aims to remain at the forefront of the retail industry and continue to meet the evolving needs of its diverse customer base.

Customer segmentation plays a crucial role in Tesco’s marketing strategy . By understanding the unique preferences and behaviors of different customer groups, Tesco can tailor its offerings to cater to their specific needs. This approach allows Tesco to create personalized shopping experiences that resonate with customers and foster long-term loyalty.

Brand positioning is another essential aspect of Tesco’s marketing strategy. By positioning itself as a reliable and customer-centric brand, Tesco aims to differentiate itself from competitors and establish a strong presence in the market. Tesco strives to be synonymous with quality, affordability, and convenience, ensuring that customers choose Tesco as their preferred shopping destination.

Promotional campaigns play a vital role in Tesco’s marketing efforts . By offering special discounts, promotions, and incentives, Tesco can attract new customers and retain existing ones. These campaigns are carefully designed to align with Tesco’s brand image and provide customers with added value, enhancing their overall shopping experience .

An omnichannel strategy is a crucial component of Tesco’s marketing approach. Tesco recognizes the importance of reaching customers through multiple channels, both traditional and digital. This comprehensive approach allows Tesco to engage with customers on various platforms, including TV and radio ads, social media, email marketing , and online advertising. By utilizing these channels effectively, Tesco ensures that its marketing messages are delivered to a broader audience, driving customer engagement and sales.

Key Takeaways:

• Tesco has developed a marketing strategy for 2024, focusing on customer segmentation, brand positioning, promotional campaigns, and an omnichannel approach.
• Customer segmentation allows Tesco to tailor its offerings to different customer groups, enhancing personalization and loyalty.
• Brand positioning ensures Tesco’s differentiation in the market through a strong focus on quality, affordability, and convenience.
• Promotional campaigns attract new customers and retain existing ones, providing added value and enhancing the overall shopping experience.
• An omnichannel strategy allows Tesco to reach customers through various channels, encompassing traditional methods and digital platforms.

About Tesco: A Brief Overview

Tesco, a retail giant in the grocery sector, has established itself as a leading supermarket in the United Kingdom. With a market share that speaks volumes about its dominance, Tesco operates a vast network of over 7,000 stores globally, catering to the diverse needs of its customers.

What sets Tesco apart is its extensive product range, which goes beyond groceries to include clothing, household items, and electronics. The company’s commitment to quality and choice is evident in its private labels, such as Tesco Finest, Tesco Everyday Value, and F&F, which have garnered the trust and loyalty of consumers.

Tesco’s success is not solely attributed to its product offerings. The retail giant has developed an effective loyalty program called Clubcard, which rewards customers with points for their purchases. These points can be redeemed for discounts on future shopping, offering customers tangible benefits and incentives for remaining loyal to Tesco.

As a responsible corporate citizen, Tesco strives to become a zero-carbon business by 2050 through its sustainability initiatives. Alongside its commitment to the environment, the company has consistently demonstrated strong financial performance, focusing on cost-saving measures and delivering consistent revenue and profit growth.

To expand its operations and maximize its potential, Tesco has made strategic acquisitions, including the renowned UK food wholesaler Booker Group and the convenience store chain One Stop. These acquisitions have strengthened Tesco’s market position and enhanced its ability to serve customers effectively.

Tesco’s marketing mix, consisting of the 4Ps – Product, Price, Place, and Promotion, has proven to be instrumental in developing and implementing effective marketing strategies. By offering own-brand products at various price points and frequently employing price promotions and discounts, Tesco ensures that it caters to the needs and budgets of its diverse customer base.

In an increasingly competitive retail landscape, Tesco recognizes the importance of utilizing digital channels to engage with customers effectively. The company employs social media platforms, email marketing, and online advertising to connect with its audience and provide a seamless shopping experience in both physical and digital spaces.

With its extensive store formats, including Extra, Superstore, Metro, and Express, Tesco is equipped to cater to different customer needs. Whether it’s the convenient one-stop-shop or the quick grab-and-go, Tesco ensures that customers have a variety of options to choose from.

In conclusion, Tesco’s dominance as a retail giant can be attributed to its commitment to quality, extensive product range, effective marketing strategies, and customer-centric approach. With its strategic acquisitions, sustainable initiatives, and a strong foothold in both physical and digital spaces, Tesco continues to set industry standards and thrive in the grocery sector.

Tesco’s Marketing Mix

Tesco, one of the largest retailers in the UK, implements a comprehensive marketing mix strategy to drive its success in the competitive retail market. The company focuses on four core elements: product, price, place, and promotion.

Product Strategy: Tesco offers a diverse range of products, catering to the needs of its customers. In addition to groceries, Tesco provides clothing, household items, electronics, and more. This extensive product range showcases Tesco’s commitment to diversification and meeting the varied preferences of its customer base.

Pricing Strategy: With its wide market reach and massive customer base, Tesco leverages competitive pricing strategies to attract price-conscious customers. The company offers price promotions and implements dynamic pricing for online shopping, ensuring that customers can find value and affordability in their purchases.

Place and Distribution Strategy: Tesco operates various store formats, such as Extra, Superstore, Metro, Express, and One Stop, strategically located to ensure easy accessibility for customers. This diverse store network allows Tesco to cater to different customer needs and preferences, providing convenience and seamless shopping experiences.

Promotional Strategy: Tesco engages in targeted advertising through multiple channels, including television, radio, print, and online media. By reaching its target audience effectively, Tesco promotes its products and offers to drive customer engagement and sales. Moreover, the company runs in-store promotions, such as special offers, discounts, and multi-buy deals, incentivizing customer purchases and enhancing the overall shopping experience.

Tesco’s marketing mix strategy enables the company to effectively position itself in the market, attract customers, and maintain a strong competitive edge. By offering a broad product range, implementing competitive pricing strategies, strategically locating its stores, and engaging in comprehensive promotional campaigns, Tesco continues to thrive and meet the evolving needs of its diverse customer base.

Tesco’s Buyer Persona

Understanding customer needs is a crucial aspect of Tesco’s marketing strategy. To ensure that they deliver a seamless shopping experience, Tesco creates buyer personas, such as John Smith, a representative customer. John Smith values speedy service, quality products at good prices, and savings. Tesco’s buyer persona strategy enables them to personalize their offerings according to the specific needs and preferences of their customers.

By focusing on personalization, Tesco caters to the unique requirements of its diverse customer base. Whether it’s providing convenient store formats, offering a wide range of high-quality products, or ensuring competitive prices, Tesco prioritizes customer satisfaction. Their commitment to savings is evident through their loyalty program, Clubcard, which rewards customers with personalized discounts, exclusive access to discounted products, bonus points on purchases, and redeemable rewards for future purchases.

The buyer persona approach allows Tesco to understand its customers on a deeper level, offering products and services that are tailored to their individual needs. In doing so, Tesco provides a shopping experience that is convenient, personalized, and focused on delivering the highest quality products, all while helping customers save.

Tesco’s Digital Marketing Strategy

Tesco, a leading global retailer, understands the significance of digital marketing in today’s competitive landscape. With a comprehensive digital marketing strategy, Tesco harnesses the power of online platforms to effectively reach and engage with its customers.

One key element of Tesco’s digital marketing strategy is its website. With an authority score of 75, Tesco’s website serves as a central hub for customers, offering a seamless online shopping experience. The website attracts a significant amount of organic search traffic, with 31.5 million monthly visitors. Additionally, Tesco employs targeted search engine advertising, with 14.4K visitors coming from paid search, to further enhance its online presence.

Social Media

Recognizing the power of social media in the digital age, Tesco leverages platforms like Instagram and Facebook to engage with customers, build brand awareness, and promote its products and services. Through strategic social media marketing campaigns, Tesco effectively targets its audience and fosters meaningful connections.

Email Marketing

Email marketing plays a crucial role in Tesco’s digital marketing strategy. Through personalized and targeted email campaigns, Tesco maintains a direct line of communication with its customers, keeping them informed about exclusive offers, promotions, and new product releases. This not only boosts customer engagement but also drives sales and enhances brand loyalty.

Search Engine Advertising

Tesco understands the importance of search engine advertising to increase its visibility and drive traffic to its website. By strategically bidding on keywords relevant to its products and target market, Tesco successfully attracts potential customers and directs them to its online platform. This helps drive conversions and boosts overall sales.

Tesco’s digital marketing strategy encompasses a multifaceted approach that utilizes its website, social media platforms, email marketing, and search engine advertising to create a comprehensive and cohesive online presence. By leveraging these channels effectively, Tesco enhances its brand visibility, engages with customers, and drives business growth in the ever-evolving digital landscape.

Tesco’s Customer Loyalty Program

Tesco’s customer loyalty program, Clubcard, is a key component of the company’s marketing strategy. With over 19 million members, Clubcard offers a range of benefits that foster customer loyalty and enhance the overall shopping experience.

Through Clubcard, customers earn 1 point for every £1 spent at Tesco stores or online. This incentivizes customers to continue shopping with Tesco and rewards them for their loyalty. In addition, Tesco provides up to three loyalty cards to customers, including small plastic keychain cards, making it easy for members to keep their Clubcard handy at all times.

One of the standout features of the Clubcard loyalty program is its personalized deals. Tesco utilizes customer segmentation and data analysis to tailor offers and rewards based on individual shopping habits and preferences. This level of personalization ensures that customers receive discounts and rewards that are relevant to their specific needs, making their shopping experiences even more enjoyable.

Clubcard members have access to a range of rewards which can be redeemed for money towards future purchases, discounts on selected products, and vouchers for various activities and experiences. These rewards not only provide added value for customers but also give them a sense of exclusivity and special treatment.

In the UK, the Clubcard loyalty program operates on a “1% getback” scheme, where participants can earn points equivalent to 1% of their spending. This encourages customers to continue shopping at Tesco and maximize their savings through the accumulation of bonus points.

Tesco’s loyalty program strategy focuses on multiple offers, saving money on grocery bills, and personalization in order to strengthen customer relationships. By leveraging the data collected from the Clubcard scheme, Tesco can better understand individual customer needs and preferences, allowing them to tailor offers and rewards accordingly.

Tesco’s Marketing through Multiple Channels

Tesco understands the importance of utilizing multiple marketing channels to reach a wide range of customers. By combining traditional marketing methods with digital strategies , Tesco effectively connects with its target audience.

Traditional Marketing

Tesco employs various traditional marketing techniques to promote its products and services. Television and radio ads play a significant role in increasing brand awareness and driving customer engagement. These forms of advertising allow Tesco to reach a large audience and convey its message effectively. Additionally, print media, such as newspapers and magazines, are utilized to target specific demographics and geographical regions.

Digital Marketing

Tesco recognizes the power of digital marketing in today’s digital age. The company leverages different digital channels to engage with customers and establish a strong online presence. Social media platforms, including Facebook, Instagram, and Twitter, are used to engage with customers, share product updates, and run promotional campaigns.

Email marketing is another essential component of Tesco’s digital marketing strategy. By sending personalized and targeted emails, Tesco keeps customers informed about special offers, discounts, and new product launches.

Furthermore, online advertising is an integral part of Tesco’s digital marketing efforts. The company utilizes display ads, search engine advertising, and remarketing campaigns to reach potential customers and drive traffic to its website.

Tesco’s multichannel marketing approach allows the company to create a cohesive brand presence across different platforms, both online and offline. By utilizing a combination of traditional and digital marketing strategies, Tesco maximizes its reach and ensures it connects with customers at every touchpoint.

Tesco’s marketing through multiple channels helps the company maintain a strong presence in both traditional and digital spaces. This multifaceted approach enables Tesco to effectively engage with customers, increase brand visibility, and drive sales.

Innovative Digital Grocery Strategy

Tesco, with over 6,800 locations across Europe and Asia, is not only focused on its physical retail presence but also on its innovative digital grocery strategy. As the company aims to become the most successful retailer in the UK and globally, it recognizes the importance of providing a seamless shopping experience for its customers through eCommerce.

Tesco’s digital grocery strategy revolves around offering customers a convenient and efficient way to shop for groceries online. With the increasing popularity of eCommerce, Tesco has invested in its online platform to expand its customer base and enhance customer satisfaction.

Customer service is at the core of Tesco’s digital grocery strategy. The company emphasizes quality, dependability, affordability, and usability to ensure that customers have a positive experience when shopping online.

By leveraging technology and data-driven insights, Tesco strives to provide personalized recommendations and offers to its customers. This not only enhances the shopping experience but also strengthens customer loyalty.

Furthermore, Tesco’s emphasis on customer service extends to its delivery options. The company has expanded its rapid delivery service, “Whoosh,” to reach around 60% of the UK population. This allows customers to receive their groceries quickly and conveniently, reinforcing Tesco’s commitment to seamless and efficient service.

In addition to its robust digital infrastructure, Tesco also focuses on collaborating with suppliers to enhance the overall customer experience. By utilizing online sponsored search functionality and leveraging digital screens in stores, Tesco ensures that customers have access to a wide range of products and promotions.

With an impressive online availability of over 97% and a significant increase in perfect orders year-on-year, Tesco’s digital grocery strategy demonstrates its commitment to meeting customer demands and expectations.

In conclusion, Tesco’s innovative digital grocery strategy combines eCommerce with a focus on providing a seamless shopping experience and excellent customer service. By leveraging technology, data-driven insights, and collaboration with suppliers, Tesco continues to expand its customer base and strengthen its position as a leading retailer in the digital era.

Tesco’s Corporate and Business-Level Strategies for Growth

Tesco, one of the leading global retailers, has implemented a range of effective corporate and business-level strategies to drive growth and achieve success in the highly competitive market. These strategies have contributed to Tesco’s strong market position and impressive financial performance.

Tesco’s Low Price Strategy and Cost Leadership

Tesco has adopted a low price strategy as a core component of its business-level strategy. By offering competitive prices on a wide range of products, Tesco attracts value-conscious customers and maintains an edge over its competitors. Through effective cost leadership, Tesco continuously strives to optimize its operations and supply chain management, allowing the company to minimize costs and deliver savings to its customers.

Customer Focus and Market Development

Customer focus is at the heart of Tesco’s corporate strategy. The company continuously analyzes consumer preferences and behaviors to understand their needs and provide tailored solutions. Tesco’s customer-centric approach enables the development of innovative products and services that meet the evolving demands of its target market. Additionally, Tesco’s market development strategy involves expanding its operations into new geographical regions, tapping into untapped markets, and reaching a broader customer base.

Product Development and Market Penetration

Tesco places a strong emphasis on product development to attract and retain customers. By offering a diverse and high-quality product range, including fresh food and Tesco’s own-branded products, the company stimulates customer interest and strengthens its competitive position. Simultaneously, Tesco utilizes market penetration strategies to drive growth within existing markets. Through targeted marketing campaigns and promotions, Tesco aims to increase its market share and gain a larger portion of customer spending.

Overall, Tesco’s comprehensive corporate and business-level strategies, including its low price strategy, customer focus, cost leadership, market development, product development, and market penetration, have consistently delivered positive results. These strategies have contributed to Tesco’s strong market share, increased revenues, and continuous growth. As Tesco continues to refine and adapt its strategies, the company remains well-positioned for sustained success in the dynamic retail industry.

The Power of Market Research and Competitive Analysis

Market research and competitive analysis play a crucial role in the success of Tesco’s marketing strategy. By understanding the market trends , consumer behavior, and competitive landscape, Tesco can make well-informed data-driven decisions and stay ahead of the competition in the highly competitive retail industry.

Market research provides valuable insights into customer preferences, purchasing habits, and emerging trends. Tesco utilizes market research to identify new opportunities, develop effective marketing campaigns, and customize their product offerings to meet customer demands. By conducting comprehensive market research, Tesco can better understand customer needs and preferences, enabling them to tailor their marketing strategies to target specific market segments .

Competitive analysis allows Tesco to assess the strengths and weaknesses of its competitors. By understanding the competitive landscape, Tesco can identify key areas where they can differentiate themselves and gain a competitive edge. This analysis helps Tesco identify market gaps, improve their product offerings, and develop strategies to position themselves as market leaders.

Tesco’s commitment to market research and competitive analysis allows them to make data-driven decisions and stay ahead of the competition. By leveraging the insights gained through these practices, Tesco can anticipate market trends, develop effective marketing campaigns, and deliver tailored experiences to their customers.

Market research and competitive analysis are essential tools for Tesco to stay competitive and achieve their goal of maintaining a 5% extra competitiveness in marketing. These practices enable Tesco to make informed decisions, adapt to changing consumer preferences, and drive growth in the retail industry.

Tesco’s Commitment to Sustainability

Tesco, as a global retail company, is dedicated to sustainability and focuses on implementing various environmental initiatives. Their commitment stems from their understanding of the importance of protecting the environment, engaging with the community, and prioritizing employee welfare as part of their corporate social responsibility efforts.

One of Tesco’s notable achievements is their commitment to sending zero food waste to landfill in the UK since 2009. They have achieved this by implementing effective waste management strategies and partnerships with organizations that help redistribute unsold food safe for human consumption. In fact, in 2022/23, Tesco redistributed 88% of unsold food, surpassing their 85% target set in 2016.

In addition to tackling food waste, Tesco has made significant strides in reducing overall food waste by 45% since 2016. As part of their ambition, they aspire to halve food waste by 2025 and have committed to achieving this goal five years ahead of the global target set by Champions 12.3 and the UN Sustainable Development Goals.

Beyond their food waste reduction efforts, Tesco demonstrates their commitment to sustainability through investments in renewable energy and sustainable sourcing. They have set ambitious goals to reduce their carbon footprint and increase the proportion of sustainable and fairly traded products in their stores.

Tesco’s commitment to sustainability is not without its challenges. The company faces competition from discount retailers, needs to adapt to changing consumer preferences, and comply with regulatory issues. However, they have shown resilience and adaptability by diversifying into financial services and insurance while maintaining their focus on customer service, innovation, sustainability, international expansion, diversification, and cost management.

With a market share of over 27% in the UK’s grocery retail sector, Tesco’s commitment to sustainability shines through their actions. They were the first FTSE100 company to commit to science-based targets aligned with the Paris Agreement’s 1.5°C target. Tesco aims to achieve carbon neutrality in their operations by 2035 and be net-zero across their entire footprint by 2050.

Through their initiatives, Tesco has achieved significant milestones, including a 52% absolute reduction in emissions from their operations in 2022 compared to a 2015 baseline. Over 90% of Tesco’s emissions footprint is captured by scope 3 indirect emissions within their value chain, giving them a clear focus for reduction efforts.

To support their sustainability goals, Tesco launched a revolving credit facility of 2.5 billion GBP tied to key performance indicators (KPIs), including greenhouse gas (GHG) emissions reduction. They also issued sustainability-linked bonds to finance their efforts, demonstrating their commitment and holding themselves accountable for meeting emission-reduction targets.

Tesco acknowledges the importance of collaboration in achieving their sustainability ambitions. In 2021, they initiated a supply chain finance initiative to help suppliers contribute to lower funding costs and align with Tesco’s environmental, social, and governance (ESG) priorities, with a focus on addressing scope 3 emissions.

These sustainability initiatives have garnered recognition, with Tesco receiving awards such as the Association of Corporate Treasurers Deals of the Year Awards and the Finance for the Future Awards. These accolades highlight Tesco’s dedication to sustainable practices and their positive impact on both the environment and society as a whole.

Sustainability Initiatives at Tesco

Table: Tesco’s Sustainability Milestones

Despite the challenges they face, Tesco remains committed to sustainability, continually striving to reduce their impact on the environment and make a positive difference in the communities they serve. Through their comprehensive sustainability efforts, Tesco sets an example for other companies in the retail industry and beyond.

Tesco’s marketing strategy case study exemplifies its commitment to customer loyalty, digital outreach, and innovative retail campaigns. The company’s successful implementation of its marketing mix, understanding of buyer personas, and comprehensive digital marketing strategy have positioned Tesco as a leading retailer in the ever-evolving industry. By prioritizing customer loyalty programs, Tesco ensures a personalized shopping experience for customers, building trust and fostering long-term relationships.

Recognizing the importance of market expansion, Tesco has introduced same-day delivery options, emphasizing its commitment to market development. The company’s product lines, Everyday Value and Finest, have become the largest food brands in the UK, solidifying Tesco’s market presence. Despite facing competition from rivals with a wider product range, Tesco’s brand image centered around low prices reinforces its cost leadership strategy, attracting value-conscious customers.

However, Tesco’s journey towards a fully functioning social media marketing system is yet to be completed. Challenges include improving its digital presence, revamping outdated apps, and addressing functionality gaps, such as scheduling orders. To further enhance operational efficiency, a focus on subscription-based services is recommended, aligning with Tesco’s cost leadership strategy by improving planning and logistics.

With a strong financial performance, an extensive online customer base, and a positive brand image among customers, Tesco continues to thrive. As a retail giant offering more than 40,000 products across various store types, Tesco maintains its competitive advantage through strategic promotional offers, loyalty programs, and price strategies, enabling continuous growth and customer satisfaction.

What is Tesco’s marketing strategy for 2024?

How many stores does tesco have globally, what is tesco’s marketing mix, how does tesco understand its customers, what is tesco’s digital marketing strategy, what is tesco’s customer loyalty program, how does tesco market through multiple channels, how does tesco approach digital grocery shopping, what are tesco’s corporate and business-level strategies for growth, how does tesco utilize market research and competitive analysis, what is tesco’s commitment to sustainability, related posts:.

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Nina Sheridan is a seasoned author at Latterly.org, a blog renowned for its insightful exploration of the increasingly interconnected worlds of business, technology, and lifestyle. With a keen eye for the dynamic interplay between these sectors, Nina brings a wealth of knowledge and experience to her writing. Her expertise lies in dissecting complex topics and presenting them in an accessible, engaging manner that resonates with a diverse audience.

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1 Tesco plc, Preliminary Results 2022/23, April 2023 2 Kantar World Panel, Grocery Market Share, Great Britain, 12 weeks ending 18.02.24 3 Tesco plc, Interim Results Trading Statement, October 2023

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[1] Kantar, 12 weeks ending 20/03/2022 [2] Kantar, 52 weeks ending 20/02/2022 [3] Tesco-plc- Interim Results 2021/22

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Tesco pleads guilty to Clubcard price display breaches

Tesco Ireland Limited has pleaded guilty to two sample counts of failing to comply with consumer protection law in how they displayed the price of products offered at a promotional price to its Clubcard holders.

Tesco was ordered yesterday to pay the legal costs of the Competition and Consumer Protection Commission (CCPC) and a donation of €1,000 to the Little Flower Penny Dinners charity.

The case follows an investigation by the Competition and Consumer Protection Commission (CCPC), which is responsible for enforcing and promoting compliance with consumer protection law here.

It found that Tesco broke the law by failing to include unit pricing on Tesco Clubcard promotional shelf-edge labels. The breaches were identified during a CCPC inspection in August 2023.

The CCPC said that shoppers have to quickly evaluate a wide range of factors when deciding what products offer the best value for their money.

Supermarkets are legally required to show unit pricing to make that process easier for consumers.

Displaying the price per kilo, litre or metre allows consumers to compare the cost of similar products sold in different sizes, the CCPC said.

It also prevents consumers from being misled by packaging or discounts into paying more for less, it added.

Tesco last night said it introduced unit pricing for Clubcard prices in February this year.

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