Best Buy's Getting Creative Amid Slumping Sales — But Expert Warns the Strategy Has a Major Flaw Consumers stocked up on electronics at the start of the pandemic — and they're not interested in buying more right now.
By Amanda Breen •
Best Buy enjoyed a big sales boost at the beginning of the pandemic as consumers loaded up on electronics to get them through quarantine — but those days are over.
Now, the electronics retailer is revamping its membership program to include three different levels and lower-priced options on June 27, CNBC reported.
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The current membership program TotalTech, which debuted two years ago and cost $199.99 per year, will become the new program's top tier My Best Buy Total; soon-to-be priced at $179.99 annually, it provides 24/7 tech support, up to two years of product protection, 20% off repairs and additional benefits.
The second tier, priced at $49.99 per year, includes members-only prices, free two-day shipping with no minimum purchase and an extended return policy; and the third tier, part of a free loyalty program, offers free shipping with no minimum purchase.
In March, Best Buy CEO Corie Barry said the company would close or remodel some of its larger stores and launch smaller-scale outlets selling used and refurbished electronics to entice customers on a budget, Reuters reported.
But Joe Feldman, a retail analyst for the Telsey Advisory Group, told CNBC that Best Buy's membership program has a weak spot due to the decrease in demand for new devices: "[The program] often gets associated with a purchase, so some of it is chicken and egg. It makes it a challenge."
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The retailer declined to share a current membership total and the program's renewal rate, per the outlet.
