Tesco-isation might not sound nice or please everyone as it has a negative effect on local businesses, and they continue to expand without limit. Nonetheless there are many sides that need to be appreciated, and much to be learnt from the company with regards to the way they conduct their business.  Tesco have been able to dominate the market because of their clever business model, starting from creating a good circle of virtue filled with tricky incentives.

Their online store is by itself a huge success together with efficient and effective use of their Information Systems which much of their success depends on. Now adding to the fire they have launched an app for the iphone which acts as a substitute for the plastic clubcard (Tesco loyalty card). They have also plans to introduce similar apps for other phones such as the Blackberry and Nokia.

Now where does all this innovativeness turn in to tangible or intangible gains? Previously the clubcard has hugely contributed to the CRM software of Tesco allowing them to slice and dice the data that they compile. Most Tesco shoppers I have personally come across think that the clubcard is only there to reward them with 1 point for every 1 pound spent in store. Now that is true! but what they don’t know is that they are giving Tesco that vital piece of information about their spending/shopping habits at Tesco.

One way or the other clubcard owners are contributing for the success of the company allowing management to make highly knowledgeable decisions at strategical and operational levels. The clubcard also comes in handy for customers while they do their shopping online as it keeps a record of all the items purchased in the past. This eliminates the need to browse the whole online store looking for the items you regularly buy.

Now what extra benefit does the app (clubcard for iphone) bring to the equation? Apart from the obvious benefits such as saving sending out plastic cards, Tesco will be able to accurately know how many, and which of their customers own an iphone, a Blackberry, and a Nokia. Now, you might be thinking what is the use of that? With the company expanding into the telecoms industry, this gives them the chance of monetising on existing customers.

For instance I have installed the app, Tesco already know that I own an iphone and I have auto-magically become a lead on my own action. How brilliant is that? no annoying questionnaires or surveys to obtain this valuable information. This makes their future marketing campaigns easier and successful as it is more targeted and can initiate a call to action which probably makes me a converted lead in the near future. Who knows what type of offer they might throw at me sooner or later?

Everybody is a winner as they are using a clever inbound marketing technique which relies on permission not interruption by giving away a small app, this way they have a very low cost per lead which allows them to get higher ROI (return on investment). Clever Tesco or Clever Marketing?