- Firm to power Tesco Clubcard Challenges
- One-year contract with option to renew
- Eagle Eye’s sales rose 20% in H1
Technology tiddler Eagle Eye Solutions (EYE:AIM) has secured a new contract with Tesco (TSCO) for personalised promotions, exciting news which sent shares in the UK SaaS (software-as-a-service) firm up 9% to 510p on Monday.
While no financial details were disclosed, house broker Shore Capital believes Eagle Eye’s contract win with Britain’s biggest retailer, which includes the option to renew for a further year, ‘once again points to the commercial potential of the group’.
WHAT DOES EAGLE EYE DO?
For the uninitiated, Eagle Eye enables retail, travel and hospitality brands to earn the loyalty of customers by powering their real-time, omni-channel and personalised consumer marketing activities and is emerging as a vital technology partner to retailers.
Eagle Eye’s loyalty and promotions omni-channel software-as-a-service platform called Eagle Eye AIR is clearly gaining traction with retail businesses, with customers including Asda, Tesco, Morrisons, Waitrose and John Lewis & Partners, not to mention JD Sports Fashion (JD.) and Pret a Manger.
The platform allows client customers to validate and redeem digital promotions in real-time, a key loyalty lever to pull in a budget-conscious climate.
WHY THE TESCO TIE-UP EXCITES
Eagle Eye has bagged a one-year contract with Tesco for its AI-powered Personalised Challenges solution, building on its existing relationship with Britain’s biggest retailer.
Following a successful trial which saw a higher than anticipated participation rate, Tesco will roll out Personalised Challenges to more Clubcard members in the coming months, under the name Clubcard Challenges. The solution will power personalised and gamified offers and promotions to each individual Clubcard member.
The Personalised Challenges solution, which became part of the Eagle Eye offering following the acquisition of Untie Nots, is a digital platform which allows retailers to personalise promotions, providing customised challenges designed to reward incremental behaviour.
In-built AI and deep machine learning facilitate hyper-personalisation through its analytics capability, providing consumers with promotions more suited to them.
Lizzie Reynolds, Tesco’s group membership and loyalty director, said: ‘We are constantly looking for ways to make Clubcard work harder for our customers. With Clubcard Prices on around 8,000 products, it is saving customers up to £360 off the annual cost of their groceries. Personalisation is about using what we know about customers to make their experience better and our rewards more helpful and we’re very excited to see how our customers respond to Clubcard Challenges.’
Eagle Eye chief executive Tim Mason commented: ‘It’s a privilege to be working with Tesco, one of the world’s great retailers and an acknowledged leader in customer loyalty, to usher in its next stage of personalised promotions. This win underlines the power of the EagleAI solution, capable of creating and delivering millions of hyper-personalised marketing messages, and our position at the forefront of personalised marketing.’
Results (19 March) for the half to 31 December 2023 demonstrated Eagle Eye’s continuing positive momentum as retailers move towards personalised marketing.
The company delivered a 20% jump in sales to £24.1 million and a 50% surge in adjusted pre-tax profit to £2.6 million.
EXPERT VIEWS
Clive Black, Shore Capital’s consumer research guru, commented: ‘This is great news for Eagle Eye, with Tesco being the number one retailer in the UK and a leading player in Czechia, Hungary, Ireland and Slovakia. Indeed, Clubcard participation in group retail sales is now over 80%, with the highest involvement in Central Europe.’
Black continued: ‘Only a first step, but Tesco is a world leader in loyalty and data analytics through its dunnhumby subsidiary, so this is a great accreditation for Eagle Eye to me, noting that Tim Mason invented Clubcard, so a homecoming. Alongside the formidable client base Eagle Eye has assembled, this is another strong manifestation of the group’s capabilities and opportunities.’
Russ Mould, investment director at AJ Bell, said Eagle Eye has ‘started the week off with a bang, securing a new contract with Tesco for personalised promotions.
‘The grocery sector is highly competitive and the big names like Tesco have to do everything they can to lure in more customers and keep existing ones happy. Tesco has a reputation for leaning on its rich pool of data to give customers relevant offers and now it seems it is going to make them even more personalised.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.
