Best Buy launches new loyalty program! "Fancy ways to attract" members!

Best Buy is tweaking its loyalty program to attract potential members, as demand for non-essential items weakens and e-tailers scramble to grab market share, according to foreign media reports.

The company said Thursday that starting June 27, its membership will be divided into three tiers. The program will also have a new name: My Best Buy memberships. The new program is built on the basis of the paid loyalty program Totaltech and is designed to better match different levels of audiences and meet their needs.

Best Buy first launched its membership program, TotalTech, in the U.S. two years ago. As of late January, the program had grown to 5.8 million members and annual revenue of nearly $1.2 billion.

As part of the new membership program, Best Buy's TotalTech will become the highest tier, but with a different name, My Best Buy Total. Its price will also drop from $199.99 per year to $179.99. The top membership program includes 24/7 technical support, up to two years of product protection and a 20% discount on repairs, among other benefits.

The second level of Best Buy's membership program is "My Best Buy Plus," which costs $49.99 per year and provides members-only prices, exclusive sales channels, free two-day shipping, and extended return and exchange time.

The first level, “My Best Buy,” is free and only offers free shipping and fast checkout.

Patrick McGinnis, senior vice president of membership at Best Buy, said the new plan will meet the different budgets and needs of different customers, but he declined to disclose the total number of updated members or the renewal rate of the plan.

We understand that Best Buy is struggling to cope with the challenges brought about by the decline in consumer demand. As the prices of food and necessities continue to rise, consumers are buying fewer and fewer electronic products. Some consumers prioritize spending on travel, dining and other services. In addition, in the first few years of the outbreak, many shoppers flocked to buy new laptops, home theater systems and kitchen appliances, and these people will not repeat purchases of such goods in the short term.

To cope with the challenges, Best Buy has also taken cost-cutting measures. It has carried out at least two rounds of layoffs, one in August and one in April. The company confirmed the layoffs but declined to disclose the number of people laid off.

The company said in March that it expected revenue of between $43.8 billion and $45.2 billion for the current fiscal year. The total would be down from $46.3 billion in the same period last year and $51.8 billion in the year before that. But it would be up from pre-pandemic levels (2019).

Best Buy Chief Executive Corie Barry told investors on a March earnings call that she expects consumer spending to rebound this year as U.S. households own record numbers of tech devices and look to upgrade or replace them, especially as vendors roll out innovative products.

Additionally, Barry said Best Buy is pleased with the results of its membership program. She said members shop more often, buy more categories and rate their experience higher than non-members.

Best Buy will report its first-quarter earnings later this month.

Editor ✎ Nicole/

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