Best Buy has adapted to competition from online players like Amazon by beefing up customer service and positioning itself as the expert in TVs, computers and other electronics. This membership offering is the latest example of the company’s approach to win customers, said Michael Baker, a retail analyst at Davidson & Co.
Best Buy is also looking for ways to add new revenue streams other than product sales. A membership is appealing because it can generate recurring fees from customers.
Best Buy currently has aanother, more limited membership program, Total Tech Support, that it launched in 2018. The new membership program will replace Total Tech Support in the the six states where it’s launching, and Baker expects to one day fully replace the prior concept.
“You need to keep making these subscription offerings more attractive to customers,” said Baker.
Best Buy is launching the membership after a strong year in the pandemic. The retailer saw a surge in sales of items from laptops to kitchen appliances as more Americans worked and cooked at home. During its latest quarter ending Jan. 30, comparable sales, or those at stores open for at least one year, increased 12.6% compared with the year prior.