Best Buy Pilots Paid Membership Program
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.
Total Retail's Take: The growth of premium (i.e., paid) loyalty programs is an emerging trend in the retail industry. The benefits to retailers offering them include consistent, quantifiable revenue streams; increased customer lifetime value; and an influx of valuable customer data that can be used to improve programs and bring more customers into them. For consumers, as the success of Amazon Prime and Walmart+ has proven, if they believe that a paid membership/loyalty program is providing them with value and enhanced shopping experiences, they're more than willing to pay an upfront fee to join. According to a recent report from Clarus Commerce, 70 percent of consumers not in a premium loyalty program would join one if their favorite retailer offered it and the benefits were valuable.
In the case of Best Buy, its paid loyalty program will be expected to offset some of the loss in revenue that's forecast after the company's record-setting sales in 2020, as consumers bought technology solutions to help them go to work and school from home.