Best Buy is jumping into Amazon and Walmart territory with a pilot subscription program that costs $199.99 a year, or $179.99 for those holding the company’s branded credit card, aiming to drive more loyalty and order value from its customer base.
Best Buy Beta is being piloted at select stores in Iowa, Oklahoma and eastern Pennsylvania, expanding later this month to Minnesota, North Carolina and Tennessee, for a total of 60 stores.
Members will get discounts, unlimited Geek Squad tech support, up to two years of protection on most product purchases, free standard shipping and delivery and free installation on most products and appliances. They also get access to a concierge service that provides 24/7 support by phone, chat, email or app.
Best Buy’s existing Total Tech Support program, which costs $200 per year and was launched in 2019, will be replaced by Best Buy Beta in the pilot areas, a spokesperson said.
“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,” said Allison Peterson, Best Buy’s chief customer officer in a blog post. “This pilot offers premium service, complete with support aimed at anticipating our customers’ needs.”
After driving out competition and owning the big-box home electronics sector, while also seeing success through expansion into appliances and other categories, Best Buy is looking to further its reach and ubiquity with this new program. It’s also looking to boost service revenue, which only represented 4% of Q4 sales.
The company certainly benefited from the pandemic as millions hunkered down, setting up home offices and remote learning centers. Same-store sales were up 9.7% last year, although revenue growth slowed from 23% in the third quarter to 12.6% in the fourth quarter.
Walmart+, its subscription answer to Amazon Prime, launched last fall after a few hiccups and has seen steady growth since. It had an estimated 7.4 million to 8.2 million members as of Jan. 30, according to Consumer Intelligence Research Partners. CIRP estimates Prime had had 142 million U.S. members at the end of 2020.
Target discontinued its subscription program in November, saying its customers wanted more flexibility in their fulfillment options, many opting for same-day delivery.
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