Dive Brief:​

• Best Buy on Tuesday announced that it is piloting a paid membership program called Best Buy Beta, according to a company announcement.

• Membership costs $199.99 annually, or $179.99 for Best Buy credit card holders, and is currently available at select stores in Iowa, Oklahoma and eastern Pennsylvania. This month it will expand to some stores in North Carolina, Minnesota and Tennessee.

• Membership comes with a number of perks, including concierge service, member pricing, free standard shipping and delivery, free installation on most products and up to two years of protection on most purchases. Additionally, unlimited Geek Squad technical support will be provided on all technology in a members' home, regardless of whether it was purchased at the retailer.

Dive Insight:

Amazon has Prime. Walmart has Walmart+. Now Best Buy has Best Buy Beta.

Retail is ramping up membership programs, and three of the biggest players are providing extra services in exchange for loyalty — and an annual fee. Amazon Prime membership saw increases during the pandemic, with those customers purchasing more frequently, according to CFO Brian Olsavsky. Furthermore, data about Walmart+ indicates that, as of February, the company garnered between 7.4 million and 8.2 million members, with those customers spending an average of around $1,000 at Walmart.com per year.

"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," Allison Peterson, Best Buy's chief customer officer, said in a statement.

The membership program is the latest announcement from a retailer that is in the midst of consolidating efforts and ramping up a digital-based selling environment. In February, CEO Corie Barry said the company had cut 5,000 mostly full-time positions and added 2,000 part-time jobs. "[W]e are intent on rescaling and retraining employees wherever possible, so we can retain our people and employees can flexibly work across all our channels," Barry said at the time, stating that employees had worked across different parts of the business, including virtual sales, chat, phone and remote support. 

Additionally, Best Buy has plans to close more large-format stores and is in the midst of testing new store formats that limit SKU assortments and reduce shoppable areas to allow for pickup and ship-from-store operations.

The retailer has seen a digital and omichannel surge during the pandemic, with online comparable sales increasing 144.4% in the 2020 fiscal year.