Best Buy Follows Prime and Walmart+ with Its Own Membership Pilot

Best Buy has started testing a membership program, Best Buy Beta, which will initially be found in about 60 of its 1,000 U.S. stores. In addition to free shipping with no minimum purchase, Best Buy Beta will offer free installation on most products and unlimited technical support—including a concierge team available 24 hours a day, special pricing, up to two years of protection on most purchases, an extended 60-day return window and a 10% discount on subscription services. The program is currently available at select stores in three states—Iowa, Oklahoma and Pennsylvania—and will expand to Minnesota, North Carolina and Tennessee later this month. In a statement, chief customer officer Allison Peterson said the support options in particular are about anticipating customer needs. “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,” she added. But, at $199.99 a year—or $179.99 for Best Buy credit card holders—it’s $80.99 more per year than Amazon Prime and $101.99 more than Walmart+. And the product selection is arguably more limited. The target audience Analysts, however, say this shouldn’t be a huge roadblock for Best Buy’s core audience. For starters, in a 2020 study, Clarus Commerce, a company that creates loyalty programs for retailers, found 38% of shoppers would be willing to join a membership program for “entertainment,” or electronics like TVs, sound systems and computers. And by offering perks that continue after tech purchases are made, Clarus Commerce CEO Tom Caporaso said, “Best Buy will attract consumers that hate dealing with setup of their new products—many consumers would rather pay a fee to avoid it altogether.” Caporaso also noted warranties on electronics like iPhones can run $100 or more through other sellers, so the Best Buy program can pay for itself quickly—and spur enrollees to make additional big-ticket purchases while they’re in the program. The value-add For his part, Allen Adamson, co-founder of marketing and product consultancy Metaforce, called Best Buy Beta “a really smart idea.” That's because it provides some differentiation in the consumer electronics market, which is otherwise just about finding the lowest price online and is more or less impossible with “the two gorillas in the category.” (That would be Amazon and Walmart if it wasn’t clear.) “I think the game has shifted where consumers have so much technology in their house … and the tech problems are consuming more and more time, especially with people living and working at home,” Adamson said. “When you're at the office, there's often the hope of a tech person showing up and helping you. But when you're at home, that person is you.” It’s also appealing to “families whose youngest kid just went to college,” Adamson added. “When that kid leaves the house … then you've got Mom and Dad lost in the dark.” And for customers who don’t want to pay for Best Buy Beta, the retailer still offers some benefits—like free shipping and extended returns—through its free loyalty program, My Best Buy Benefits, Caporaso noted.

Retail News

Best Buy Follows Prime and Walmart+ with Its Own Membership Pilot

But will customers pay $200 a year for another program?

Lisa Lacy

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