Tesco, the UK’s biggest supermarket group, has announced it will launch a subscription-based service known as Clubcard Plus in the coming weeks, specifically targeting current Clubcard members who use the supermarket regularly. The subscription is being rolled out not as a replacement to the traditional loyalty scheme but as an additional element to its already popular Clubcard system. Currently, 19 million homes across the UK have a Clubcard associated with them and the supermarket is hoping to encourage customers to join the new service.
For £7.99 a month (otherwise a total of £95.88 a year), Clubcard Plus members will have access to a range of Tesco discounts in-store, including 10% off two big shops a month as well as discounts and special access to their other ventures, including credit cards at Tesco Bank, double data with Tesco Mobile and money off at F&F Clothing. The retail company has already estimated that customers could save up to £400 on their annual shopping bill. This new system is designed to act as an advancement on the traditional Clubcard system, launched in 1995, giving specific discounts rather than letting customers build up points on their spending.
Many are comparing this new scheme to Amazon Prime, where customers not only get discounts on products and free delivery but also have access to Amazon’s other ventures, including Prime Video, Prime Music and others. Analysts have also suggested that customers are likely to pay for subscriptions such as these if they believe they’re getting value for their money in the long-term. Similar retail schemes have not only been rolled out across the UK in the form of Sainsbury’s Nectar, M&S Sparks and Morrisons More but also been successful in Europe, with French retailer Casino running a similar discount-based system.
Experts are suggesting that Tesco view this as their step forward into the digital age, creating a system that mirrors Amazon’s enough that it may produce similar results from its customers. However, only a handful of retailers have used subscription services to appeal to their core base, especially companies like Aldi, Lidl and ASDA who already operate on an everyday low-cost pricing model. There is little evidence in the UK that such a scheme will generate increased sales for the retailer, but if positive results are produced, it’s likely other supermarkets will quickly follow Tesco’s lead.
The retailer recently saw a jump in its profits but is increasingly struggling to perform in the hugely competitive sector. This new opportunity in the market could see their fortunes change as we enter the festive season.