Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Best Buy has launched a new $ 200 membership program to fight Amazon

Best Buy has launched a new $ 200 membership program to fight Amazon



The retailer said on Wednesday that it was piloting an annual $ 199.99 membership program with free device installations, concierge technical support and other benefits. The program, Best Buy Beta, will be available in about 60 Best Buy stores in six countries by the end of this month. It also includes free delivery without minimum orders, extended return time and exclusive sales.

Best Buy adapts to competition from online players like Amazon by improving customer service and positioning itself as an expert in TVs, computers and other electronics. This membership offer is the latest example of the company’s approach to winning customers, said Michael Baker, a retail analyst at Davidson & Co.

With the new membership, he said Best buy (BBY) is aimed at customers who “have more devices and technology in their home, but have trouble understanding everything and need help.”

Best Buy is also looking for ways to add new revenue streams other than product sales. Membership is attractive because it can generate recurring fees from customers.

Amazon (AMZN) popularized the model of retail membership with Prime, which currently costs $ 120 a year, and other retailers followed suit. Walmart (WMT) Walmart + debuted last year, a plan worth $ 98 a year that includes free delivery of items of $ 35 and up and same-day grocery delivery.

Best Buy currently has another, more limited membership program, Total Tech Support, which launches in 2018. The new membership program will replace Total Tech Support in the six countries where it launched, and Baker expects one day to completely replace the previous concept.

“You need to keep making these subscription offers more attractive to customers,” Baker said.

Best Buy started membership after a strong year in the pandemic. The retailer saw an increase in sales of items from laptops to kitchen appliances as more Americans worked and cooked at home. In the last quarter ending January 30, comparable sales or those in stores open for at least one year increased by 12.6% compared to the previous year.

Best Buy expects demand to slow this year, however. It is estimated that comparable sales growth will be from 2% to 1% in 2021.

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