Best Buy Embraces Retail Subscription Model with Beta

Need to Know

• Best Buy has unveiled a new subscription program, Best Buy Beta, that is designed to rival services such as Amazon Prime and Walmart+.
• The service will offer perks such as unlimited Geek Squad support, free installation, and exclusive member sale prices.
• The program will replace Best Buy’s services-focused program Total Tech Support in test markets, which include Iowa, Oklahoma, and eastern Pennsylvania.

Analysis

Best Buy is launching a new subscription program, Best Buy Beta, which will offer perks on service, installation, and exclusive pricing.

Best Buy Beta, which is priced at $199.99 for a full year (or $179.99 for customers who have a branded Best Buy credit card), is pricier than the services Best Buy is aiming to rival with the program, which includes Amazon Prime ($119/year) and Walmart+ ($89/year). The subscription program will give subscribers access to up to two years of protection on most purchases, free deliveries, and a 24/7 concierge service, in addition to free shipping with no minimums, a 60-day extended return window, and 10% off subscription services billed through Best Buy.

“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. “This pilot offers premium service, complete with support aimed at anticipating our customers’ needs.”

The program is launching at stores in test markets in Iowa, Oklahoma, and eastern Pennsylvania, and will expand to locations in Minnesota, North Carolina, and Tennessee in the coming weeks. Best Buy Beta will be available in 60 stores by the end of April. In these test markets, Best Buy Beta will replace Total Tech Support, the retailer’s services-focused subscription program. Best Buy says that Best Buy Beta may completely replace Total Tech Support across the U.S., but that will depend on the uptake of the new program.

According to a report in Bloomberg, services, such as tech support and installation, made up 4% just of the company’s U.S. sales, which was the same number as the previous year. With Best Buy Beta, the retailer is likely aiming to generate more services-driven revenue.

Best Buy has been working throughout the COVID-19 pandemic to pivot its customer experience to a digital platform; purchasing electronics has, traditionally, been an experiential experience, and the retailer was forced to rethink its online model in the wake of coronavirus lockdowns. This began early in the pandemic when Best Buy launched Blue Shirt Chat, a tool that connects online shoppers directly to in-store associates for free. The retailer also redesigned stores to focus on digital order fulfillment, including dedicated pick-up counters and expanding warehouse space to enable ship-from-store. The moves paid off: Best Buy’s digital sales grew 174% last quarter, marking the retailers second-best digital quarter of all time.

Subscription programs have become big business for retailers and brands, with companies including Coca-Cola, Forever 21, and Loblaw launching their own subscription services. Best Buy’s new program, however, directly competes with Amazon and Walmart, whose subscription services have spiked substantially in popularity in recent months. Walmart+ already has more than 8 million members—a small figure compared to Amazon Prime’s 150 million members, but significant for a service that only launched last September.