At a time when the product refresh cycle has left most Americans with a stockpile of outdated and broken devices and gear, the nation’s largest electronics and appliance retailer has rolled out a new plan to easily and responsibly dispose of this household waste.
In announcing its new at-home Haul-Away service, Best Buy said it is the first national retailer to come to customers’ homes to pick up and recycle unwanted products — even those it didn’t sell — ranging from laptops to washing machines.
“We feel we have an important role to play in helping our planet, including being there for the entire lifecycle of a product — from the time a customer starts shopping until that product is responsibly recycled,” Tim Dunn, Best Buy’s head of environmental sustainability, said in the company’s official announcement, which also highlighted the added convenience for customers.
The one-time cost for the standalone pickup service is $199 but is being offered at a 20% discount of $159 as an added perk for members of Best Buy’s new “TotalTech” subscription plan, which it is actively trying to grow.
While the Haul-Away program limits removal to two large items, such as console TV, refrigerators and outdoor grills, the company will also remove unlimited amounts of smaller items like cellphones, video games, cables, cords, cameras and more.
Selling Sustainability
The new and expanded at-home service will augment existing programs that allow the retailer’s customers to have a similar product removed when they buy a new one, such as a dishwasher.
In addition, the Minnesota-based operator of 1,000 retail locations in the U.S. and Canada currently allows customers to drop off up to three electronics per household, per day at its stores via what its calls its “everyday recycling program.” It also operates a trade-in program for items that may not be ready for disposal that gives consumers gift cards for the unwanted goods.
“Sustainability has been at the core of what we do at Best Buy for decades,” the company’s announcement said, noting its ongoing effort to improve its environmental performance as well as past results that it said has helped customers “recycle more than 2 billion pounds of electronics and appliances since 2009.”
The Subscription Challenge
While there’s no disputing a need exists in the marketplace to professionally remove these bulky items from people’s homes and to keep potentially harmful materials out of landfills, the new service announcement — and its subscription-linked discount — comes at an interesting time for companies looking to secure recurring revenue streams.
While many companies, such as Netflix, are facing increasingly discerning customers who are questioning the value received from their monthly subscriptions, retailers like Best Buy have already been actively trying to evolve and grow this facet of their business.
During its fourth-quarter earnings call six weeks ago, Best Buy Chief Financial Officer Matt Bilunas told analysts and investors that while the company’s new Total Tech $199 annual subscription model was causing a degree of cannibalization from its existing, lesser-priced service plan, its long-term benefits would ultimately pay off.
Read more: Best Buy Faces Higher Costs, Says Tech Has ‘Changed Every Aspect of Our Lives’
“TotalTech is a near term investment to drive long-term value,” Bilunas told analysts on the March 3 call. “The thesis is that over time, we will capture incremental product sales from our members that will lead to higher operating income.”
While the standalone membership was profitable at its price-point at the time, Bilunas said it was far more costly to run than the legacy program due to the breadth of benefits and the cost to fulfill them, such as installation and extended warranties.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More