Tesco launches new Clubcard deal — but shoppers are sceptical

Tesco is rolling out its Clubcard Challenges customer loyalty programme again this month, despite shoppers reporting negative feedback towards the scheme in a separate survey.

On the Tesco Grocery mobile app, Brits are offered 20 ‘spending challenges’, encouraging them to spend money on specific Tesco products to earn up to 50,000 bonus points. Rival supermarket, Sainsbury’s is running a similar offer this month for its Nectar loyalty scheme.

Years of inflation have sent consumers searching for the best deals on necessary purchases such as the weekly shop. So why are some shoppers not impressed by the promotion?

How does the Clubcard Challenge work?

Tesco Clubcard is a points-based loyalty scheme that offers shoppers money off a future purchase once they have spent money at the store. Until Sunday 25 August, around three million Tesco Clubcard members will be eligible for the Clubcard Challenge.

Eligible members will be sent an email or a notification in the Tesco app with ten spending challenges to choose from. For example, a customer might be given the option of spending either £20 in Tesco’s beauty section, or £10 at its plant-based range.

If a shopper completes the challenges and buys enough products, they could earn points worth up to £50 to spend in Tesco, or £100 if redeemed with Tesco’s ‘Reward Partners’.

Every little helps in a cost of living crisis

The psychology behind the rewards scheme is simple. Because they are being offered a gamified version of the Clubcard membership, where customers are working towards specific goals, the initiative works as a “surprise and delight”, buy-and-reward technique.

It’s also an example of personalisation. By letting customers select what spending challenge to complete, Tesco is recognising that different shoppers have different customer needs.

Lizzie Reynolds, Group Membership and Loyalty Director at Tesco, said: “Personalisation is about using what we know about customers to make their experience better and our rewards more helpful.”

These kinds of tailored deals are especially attractive to customers as food prices surge. It’s also vital for businesses. In a Startups survey last year, customer loyalty was named as the most important factor for company success in 2024, surpassing new trends such as AI.

Shoppers say Clubcard offers “not good”

The method behind the promotion might be sound. But the Clubcard Challenges scheme hasn’t received the best customer feedback in the past. Tesco first trialled the initiative back in May. At the time, a survey by MSE found that users did not rate the deals on offer.

In a poll run on X (formerly known as Twitter), MSE asked its 620k followers to report on the Clubcard offer and whether they had used it while shopping at the store.

354 people responded to the poll. Of those who were eligible for the trial, MSE found that 80% either weren’t using the offer or found it “not good”.

Another 17% said they felt it was “hit and miss”. Just 3% of Clubcard holders said it was “so far, so good”, suggesting that many had been underwhelmed by the discounts available.

Customers more discerning

Clubcard Challenges offer attractive discounts and an app that makes spending more engaging for shoppers. So why are Tesco members unimpressed by what’s on offer?

The supermarket giant may not be listening to its customer voice. Most buyers are feeling the pressure after years of rising inflation, and are prioritising value for money in purchases.

In May, however, Tesco’s Clubcard Challenges were designed to flog trending product lines, such as its barbecue and garden ranges. Discerning customers may have felt the promotion was not offering them a discount on goods they actually needed.

High-profile controversies suggest customers are becoming more sceptical of big brands’ sales strategies. Earlier this year, Tesco faced criticism after its annual profits surged 160% to £2.3billion, triggering accusations it was profiteering from the cost of living crisis.

Tesco has not confirmed which product lines this month’s spending challenges will be focused on. Perhaps it will use customer insights to better identify where its members want to put their hard-earned cash, and which rewards would prove most valuable to them today.

By doing so, the company will be more likely to satisfy shoppers and create loyal customers with high lifetime value; a Clubcard Challenge that both parties can reap the rewards from.