Dive Brief:
- After piloting the initiative earlier this year, Best Buy is introducing its Totaltech membership nationwide, the company announced on Tuesday. Best Buy will upgrade current beta testers automatically.
- As part of the program, members will be able to access multiple perks, including Geek Squad support at any time, up to two years of product protection for most Best Buy purchases, member's only prices, free delivery and standard installation. They can also access Member Monday, an event series offering members exclusive tech deals, the company said.
- The Totaltech program, which costs $199.99 annually, will also provide members exclusive access to scarce tech goods during the upcoming holiday season, per the announcement.
Dive Insight:
Before the Totaltech nationwide launch announcement, Best Buy piloted the program in select stores Iowa, Oklahoma, Pennsylvania, North Carolina, Minnesota, and Tennessee earlier this year. With the national rollout, Best Buy now stands alongside other major retailers like Walmart and Amazon in providing a subscription service to entice consumers. Retailers have been eyeing subscriptions as a way to bring in customers as the coronavirus pandemic disrupts the economy, but these services might not be the most reliable revenue stream for every retailer.
"Technology plays an increasingly crucial role in our lives today, and each customer needs technology in a different way. That's why we created Totaltech, to not only meet all of these needs, but also to give them a heightened sense of confidence – in getting a great price, in using their tech and by knowing we have their back if something goes wrong," Allison Peterson, chief customer officer at Best Buy, said in a statement.
The electronics retailer is introducing this subscription service as it tries to find its footing during the unpredictable coronavirus environment. Earlier this year, The Wall Street Journal reported that the company cut jobs and working hours for some workers to pivot to e-commerce. In Q2, its U.S. revenue increased by 20.6% from last year, but its online revenue dropped by 28.1%. E-commerce as a percentage of revenue declined to about 31.7% compared to 53.1% in 2020.
"There has been a dramatic and structural increase in the need for technology. And we now serve a much larger install base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes, like hybrid work and streaming entertainment content," Best Buy CEO Corie Barry said during the earnings call. "Our unique omnichannel assets, including our ability to inspire what is possible across the breadth of CE products as well as our ability to keep it all working together the way customers want, truly differentiate us going forward in this new landscape."
