Dive Brief:
- On Thursday, Best Buy introduced a revamped membership program. Starting June 27, the retailer’s membership program will have three tiers – My Best Buy, My Best Buy Plus and My Best Buy Total.
- Each level includes a range of benefits, including deals, access to exclusive events and free shipping, the company said in an announcement.
- The My Best Buy tier is free, while My Best Buy Plus costs $49.99 per year and My Best Buy Total costs $179.99 per year.
Dive Insight:
Retail’s consumer electronics segment continues to feel the pressures of an economic environment where people are less inclined to make discretionary purchases.
At the height of the pandemic, when an unprecedented number of people transitioned to remote work or school, sales of consumer electronics surged as consumers spent more — bolstered by pandemic relief money — on devices to outfit their home office and study spaces.
But federal health officials announced this week that the pandemic emergency is now over. And for many people, the realities of work, school and day-to-day life had returned to normal months ago.
But the consumer electronics industry continues to be affected by the macroeconomic environment, Best Buy CFO Matt Bilunas said in a March earnings announcement. The company’s Q4 revenue fell to $14.7 billion, down nearly 10% from a year ago.
Best Buy is looking to capitalize on the higher engagement from loyalty program members to drive sales and growth.
"We’ve learned a tremendous amount from our members over the last couple years, especially that different customers value very different benefits when it comes to their technology,” Patrick McGinnis, Best Buy’s senior vice president of memberships, said in a statement. “Creating these new membership options allows us to be there for all of our customers in the ways that are most important to them.”
Best Buy’s existing membership, Best Buy Totaltech, launched nationwide in 2021. That membership program will become My Best Buy Total next month.
That tier includes 24/7 tech support through the company’s Geek Squad program, regardless of where a device was purchased; occasional promotional service offers like discounted in-home installation; and 20% off repairs. Totaltech members will receive their existing membership benefits through the end of their renewal date.
The middle-level loyalty program, My Best Buy Plus, includes member-only prices on thousands of items, two-day shipping with no minimum purchase and an extended 60-day return period on most products.
The My Best Buy membership includes free shipping with no minimum purchase, access to online order tracking and quick checkout. These services are also included in the other membership tiers.
CEO Corie Barry said in March that Best Buy was also moving away from a one-size-fits-all approach to its store footprint. Instead, the retailer is developing a portfolio of formats designed to serve specific markets.
This change includes absorbing some selling floor square footage into the backroom. Barry said that move would enable the company to provide better support for in-store pickup and online buyers. Bilunas also said then that the company planned to “evolve our membership program and realize benefits from our cost optimization efforts.”
