How AI-powered gamification drove 76% conversion for 10M members for Tesco

Tesco Clubcard Challenges is a groundbreaking initiative that brings AI-powered gamification to the world’s most iconic loyalty program. Launched in May 2024, the program uses Eagle Eye’s AIR platform to deliver personalized spending challenges to 10 million Clubcard members.

The results are staggering: 76% of targeted members converted into active players, and 62% of those players successfully reached their first reward tier. The program has driven massive engagement, with members collecting over half a billion additional Clubcard points. By making over 190 intelligent decisions per challenge, Tesco has successfully moved from mass promotions to true 1-to-1 marketing, unlocking new revenue streams from suppliers while delivering up to £50 in incremental value to individual customers in just six weeks.

🏢 Company & Market Context

Tesco is the UK’s leading grocer, with a market share of approximately 27%. Its Clubcard program, launched in 1995, is one of the most successful loyalty programs in history, with over 22 million active households.

Market Context: The grocery sector is increasingly competitive, with discounters like Aldi and Lidl putting pressure on traditional players. Retailers are shifting focus from broad price cuts to personalized value to drive retention.

Strategic Challenge: Despite having a mountain of data, delivering truly personalized experiences to millions of customers in real-time is a massive technical hurdle. Tesco needed a way to make Clubcard feel "new" and "exciting" again while driving incremental spend in specific categories.

🎯 Program Design BreakdownThe "Challenges" Mechanic:‍

Members are invited to participate in a 6-week campaign where they are given a set of personalized tasks (e.g., "Spend £20 on fresh produce over 3 trips").

Key Features:

• Personalized Selection: Customers choose which challenges to "play" from a curated list based on their shopping habits.
• Tiered Rewards: Completing challenges earns bonus Clubcard points, which can be used for in-store discounts or with "Reward Partners" (trips, dining, etc.).
• Delayed Gratification: To ensure sustained engagement, the total rewards are calculated and delivered at the end of the 6-week period.
• Themed Integration: Challenges are often synced with major events (e.g., the Olympics or Christmas) to stay relevant to the cultural moment.

Incentive Logic:

The program offers a high value exchange, allowing customers to earn up to £50 worth of points (which can be worth £100+ with partners) for behaviors they were already likely to perform, but with a slight "nudge" toward higher frequency or broader category exploration.

⚙️ Technology & Operations

‍The AI Engine:

The program is powered by Eagle Eye’s AIR platform, which processes billions of data points to make over 190 intelligent decisions for every single challenge. This includes selecting the right product categories, setting the spend thresholds, and determining the optimal reward for each individual.

Operational Scale:

Delivering this to 10 million people requires a robust, API-first architecture that can handle real-time transaction processing and instant progress updates within the Tesco app.

Supplier Integration:

Tesco uses the platform to unlock supplier revenue. Brands can "sponsor" specific challenges, allowing them to target their most relevant customers with precision, effectively turning the loyalty program into a high-performance retail media channel.

📊 Results & Metrics

Participation & Conversion:

• 10 million members targeted in the initial rollout.
• 76% conversion rate from visitors to active players.
• 62% of players successfully converted into winners (reaching at least one reward).

Commercial Impact:

• Over half a billion extra Clubcard points collected by members.
• Up to £50 in value delivered per participating customer.
• Significant uplift in "Retail Media" revenue as suppliers pay to be part of the challenge ecosystem.

Strategic Wins:

• Global Recognition: Won the "Global Loyalty Award" at the International Loyalty Awards 2025.
• 1-to-1 Marketing at Scale: Proven ability to deliver individual-level personalization to nearly 15% of the UK population.

💡 Key Strategic Lessons

1. Gamification Drives Action: Turning "shopping" into a "challenge" with a clear progress bar and reward tiers significantly increases the velocity of engagement compared to passive points accumulation.
2. AI is the Personalization Bridge: You cannot do 1-to-1 marketing at this scale without AI. The 190+ decisions per challenge are what make the program feel "relevant" rather than "intrusive."
3. Delayed Gratification Protects Margins: By delivering rewards at the end of the campaign, Tesco ensures that the behavior is sustained over the full 6 weeks.
4. Supplier Collaboration is the New Growth Lever: Loyalty programs are no longer just a cost center; they are a revenue-generating media platform for brand partners.

🚀 What Other Teams Can Apply

• For Grocery/Mass Retail: Move beyond "Member Prices." Use challenges to drive "next-best-action" behaviors (e.g., trying a new category or increasing trip frequency).
• For Tech Teams: Invest in an API-first loyalty layer (like Eagle Eye) that can sit on top of your legacy POS systems to enable real-time, gamified experiences.
• For Marketing Leaders: Align your loyalty challenges with your broader brand calendar. If it’s Olympics season, make your challenges feel like an Olympic event.
• For Data Scientists: Focus on "decision density." The more intelligent decisions your system makes per customer interaction, the higher your conversion will be.

📚 Sources & Citations

1. Eagle Eye Case Study: Tesco Clubcard Challenges
2. Eagle Eye Blog: Global Loyalty Award 2025
3. Retail Tech Innovation Hub: Retail Media Opportunity
4. Internet Retailing: The Power of Loyalty Card Data