How Tesco is using big data to keep customers loyal

In Loyalty & CRM, The Mobile Customer by emily


Tesco is to use the information gathered from its Clubcard holders to personalise online offers according to their wealth and shopping habits

In a speech at the Global Summit of the Consumer Goods Forum in Turkey, Tesco’s chief executive Philip Clarke said that although winning loyalty is more difficult today because of the wealth of choice online, big data makes it easier to meet an individual’s needs: “We’re in a new era of retailing – the era of mass personalisation.”

Tesco is going to use customer data collected from its Clubcard loyalty scheme to highlight promotions to an individual using its website. It will correlate the Clubcard data with other data including payment methods and social networking information. It will offer cheaper products to price-sensitive customers and luxury products to wealthier customers. Clarke said: “The power of this approach was born out by a test we did to sell mattresses. When a customer visited our website, we would use Clubcard data to tell us if the customer was more swayed by price or quality. We’d then display the type of mattress that best reflected that shopper’s characteristic. Sales grew by 10%.”

Its mobile apps will now enable shoppers to find their nearest store and add their Clubcard points by scanning their mobile at checkout. By putting free wi-fi into more stores, mobile technology will be used to direct customers to products in store, and suggest products and offers.

It is also trailing a virtual store in Korea. Using data from customers who use a certain railway station,  targeted goods are then offered using electronic boards with transactions completed via mobile. The shopping is then delivered to the home or office.

It’s clever retailing, but it begs the question how long retailers who don’t collect customer information can afford not to. Particularly when retail giants such as Tesco are using it so effectively. What do you think?