The Financial Times reports that Tesco “is poised to trial a version of its successful Clubcard loyalty scheme in the US, as it strives to stem losses at its Fresh & Easy chain.
“Tim Mason, chief executive of Fresh & Easy, said the business, which currently has 176 stores and will have 214 by the end of February next year, was ready to support a loyalty scheme. It will be known as the Friends of Fresh & Easy card, but will be based on Clubcard ... The US loyalty card will build on the Friends of Fresh & Easy programme that customers can sign up to, to receive fortnightly e-mails containing information and special offers. Some 360,000 people have become Friends of Fresh & Easy.
“The new card, which offers one point for every dollar spent in Fresh & Easy, and rewards customers digitally rather than through physical vouchers, will be trialled in Bakersfield, in central California, this autumn. If it is successful, it could be rolled out across Fresh & Easy by the end of February.”
And here’s the kicker: “Fresh & Easy will be working with the arm of Dunnhumby that analyses Clubcard data for Tesco, based in the UK, because its US unit works with Kroger, the US supermarket that is a direct competitor of Fresh & Easy.
Among the other details reported about the new loyalty program:
• “Mason said the Friends card differed radically from anything in the US market, where customers are forced to sign up to loyalty cards to obtain lower prices on selected products. The card could replace the coupons that Fresh & Easy has been using to help drive sales. It will be able to personalise offers and distribute them cheaply via e-mail.”
• Mason also described the card program as “the icing on the cake, not “the cake itself,” which is why Tesco waited until now to introduce it - he felt that the business needed to be established first so it could support a loyalty program.
• Mason denied that the new program was either a “u-turn” for the company, nor a “last roll of the dice, though it generally is conceded that Fresh & Easy needs to get more traction in the markets where it operates by the end of the 2012-2013 fiscal year.
- KC's View:
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This is a big deal. Tesco’s great advantage in the UK always has been its ability to gather information, drill down for greater insights, and then respond to what it has gleaned with effective marketing and merchandising strategies. In a word, Dunnhumby. Bringing that level of sophistication to US markets where most retailers simply are not in the same league gives the company a tremendous shot in the arm.
Could it be too late? Maybe. Is this a last ditch effort to keep Fresh & Easy alive? perhaps. But I’ve always felt that these are very smart people with patience, deep pockets and a long-term plan ... and so short of someone coming in and making a big time bid for Fresh & Easy that cannot be refused, Tesco isn’t going anywhere for the time being.
