Best Buy is testing a new annual membership program that comes with perks like tech support, free shipping and extended warrantees on smartphones or other purchases.
The consumer electronics retailer said in a corporate blog post Wednesday that the program is available at some stores in Iowa, Oklahoma and eastern Pennsylvania. Later this month, it will expand to stores in Minnesota, North Carolina and Tennessee. By the end of the month, it will be piloted in about 60 stores.
The program, called Best Buy Beta, will cost $199.99 per year or $179.99 per year for customers who have the retailer’s credit card.
Best Buy’s sales rose over the past year as consumers bought technology to work, go to school and pass the time at home during the Covid pandemic. Sales online and at stores open at least 14 months grew by 9.7% in the most recent fiscal year, which ended Jan. 30, compared with the prior year. However, growth of those sales declined sharply from 23% in the third quarter to 12.6% in the fourth quarter.
The retailer expects the pace of growth to slow further, particularly after a year of unusually high sales. Chief Financial Officer Matt Bilunas said same-store sales will range from a drop of 2% to a gain of 1%. He said Best Buy anticipates more people will spend money on dining out and traveling again.
With the membership program, Best Buy hopes to drive sales beyond the pandemic and win more of customers’ wallets. It is following the playbook of competitors including Amazon and Walmart. Walmart launched its own program, Walmart+, last year with perks like unlimited grocery delivery and discounts on fuel. It costs $98 a year. Amazon Prime has gained more than 150 million paid members around the world over the past 15 years with free, fast deliveries and a huge library of TV shows and movies. A Prime membership is $119 per year.
Best Buy’s perks are tailored to tech. Customers who join the membership program get unlimited tech support from the Geek Squad, round-the-clock concierge service, exclusive member prices on merchandise, and free installation of many appliances and products. They also get two-year warrantees on most purchases, including Apple products like iPhones.
“As we look to evolve our membership programs, the goal of Best Buy Beta is to create a membership experience that customers will love and to leave them feeling confident throughout their relationship with Best Buy,” Allison Peterson, Best Buy’s chief customer officer, said on the company’s website.
Source: Business - cnbc.com
