By Cédric Chéreau, co-founder & managing director, Untie Nots
In May, Tesco debuted a new way to engage with its millions of Clubcard members — a personalised and gamified approach to loyalty that redefines how UK retailers traditionally operate contests and loyalty programmes.
The driving factor behind the inventive Clubcard Challenges program is the artificial intelligence that Tesco will leverage to create unique, customer-specific challenges for individual loyalty members to participate in. It’s a true, one-to-one engagement between the Clubcard holder and the retailer, not a sweepstake or a lottery. And that is a real game-changer in the world of gamification.
For Tesco, the gamified shopping experience comprised a six-week-long campaign, during which participating loyalty members were invited to choose up to 10 of 20 available personalised challenges, such as spending £10 on plant-based meals. Customers could then win a reward for completing each challenge over the campaign period, typically shown as points. The campaign generated more than £1 million worth of points in rewards for Tesco Clubcard members.
Through the integration of customised, individualised thresholds and incremental earning opportunities, Tesco’s Clubcard Challenges showcases the immense potential and future of integrating gamification, personalisation, and loyalty.
Of course, Tesco is hardly the first retailer to explore gamification – even in the UK. Asda has enjoyed tremendous success with its “Spin the Wheel” initiative, which has rewarded millions of customers for playing the game inside the rewards app. In Canada, Loblaw has gamified its PC Health proposition, enabling customers to earn PC Optimum points for completing a Health Journey activity, such as walking 10,000 steps daily. Another of our partners, the French grocery giant Carrefour, implemented a challenges programme in 2019 similar to the one that Tesco launched earlier this year.
Shoppers seek gamification and personalisation
The trend of retailers embracing gamification is partially driven by the fact that shoppers are increasingly drawn to gamified and personalised experiences. In a study of global consumers in the grocery channel, 66% said they would participate in games, contests, or challenges through a loyalty programme or app. Break out younger demographics and the urge to compete grows:
- 74% of Millennials said they would participate in gamified loyalty experiences.
- 68% of Gen Xers would be open to challenges or games inside their loyalty programme.
Gamification clearly has a place within retail marketing strategies. At the same time, shoppers are seeking a personalised shopping experience. In the same global study, 6 in 10 shoppers said personalisation is essential, while 84% believe personalised offers save them money.
Today, AI can analyse a customer’s historical purchases, frequency of visit, promotions participated in, and so much more. It can also predict future behaviour, using a combination of both to build compelling promotions for individual customers. In this way, AI can transform how a retailer delivers promotions, going from mass promotional campaigning to providing unique, personalised offers. Personalised games and challenges are the next step toward more individualised customer engagement.
The value of personalised, gamified loyalty
Personalised or not, gamification ultimately aims to get shoppers involved and engaged with a brand. The experiences are designed to build a positive relationship between consumers and retailers through entertainment. When retailers use AI to provide personalised challenges within the loyalty framework, additional benefits accrue, including:
- Driving digital engagement within the loyalty programme and app. As much as retailers want to generate new member signups, engaging existing members is often a larger goal. By immersing loyalty programme members in personalised tasks where they can earn tangible rewards, consumers feel special, like they are getting added attention and care. This, in turn, encourages more interactions and leads to higher overall engagement rates. Additionally, the highly attractive offers (for example, Tesco’s offer of up to £50 worth of points) are also attractive for new signups, further enhancing a programme’s reach and effectiveness.
- Unlock new supplier revenue opportunities. For most retailers, personalised challenges will create a new pathway for deploying supplier-funded offers, attracting new marketing dollars from CPG brands. Because challenges can be tied to specific products, brands, or categories and tailored to each loyalty member’s preferences, they are particularly well-suited as a vehicle for supplier-funded offers.
- Scaling personalisation execution. Personalising gamification elements within the construct of a loyalty programme allows those elements to be deployed at scale; a retailer can make them available to all members, not just in-store shoppers at one location or another smaller segment of customers. This scale can be further enhanced by a mass marketing message that drives loyalty app updates and downloads.
AI and automation drive personalisation
Retailers like Tesco, which is implementing AI-powered gamification, are making the case for why personalising promotions and loyalty programme integration are the future of customer engagement. Every loyalty member who participates in Tesco’s Clubcard Challenges receives a set of entirely custom challenges built for them and AI technology can automate, and process offers instantly across the retailer’s base.
The leading UK retailer is now seeing how personalisation, gamification and loyalty fit together, leveraging AI to launch Clubcard Challenges and making it an integral part of the loyalty programme experience quickly and effectively. As the technology powering these initiatives advances, new capabilities will undoubtedly emerge, bringing the “holy grail” of engaging customers on a truly individual basis even closer. For now, though, we are just scratching the surface of gamification and personalisation’s potential.
ABOUT THE AUTHOR
Cedric Chereau, co-founder & managing director, Untie Nots
Cédric Chéreau, co-founder & managing director of UntieNots, has more than 20 years of experience in retail analytics, supporting retailers and FMCG companies from Europe and North America. He holds a Master of Science in Marketing from EDHEC.
