Best Buy Begins Offering Tiered Memberships

Best Buy has officially launched its new three-tiered membership program to entice cost-conscious shoppers.

Beginning Tuesday (June 27), customers can take part in one of three memberships: an existing free tier, a new, more affordable paid program priced at $49.99 per year, and a revamped version of its original paid tier that costs $179.99 per year, per a company news release.

“These three tiers create a powerful membership experience for our customers,” Patrick McGinnis, the retailer’s senior vice president of memberships, said in the announcement.

“We took what our customers told us they value most with their technology and membership, which includes perks like exclusive access to deals and member-only prices, and used it to shape our three tiers with great benefits and more flexibility.”

As PYMNTS wrote when the new tiers were announced last month, Best Buy says it has found that members of its paid tier engage with the company more often, purchase more products and report greater satisfaction rates.

“Also, members have taken advantage of benefits in noticeably different ways; for example, some of our members use member pricing and product protection more often, while other members more frequently leverage tech support services,” Best Buy said last month. “And all members cite free shipping as one of the most valuable benefits.”

And as noted here in March, retailers have seen that “value add” memberships are crucial to bringing shoppers to stores at a moment when inflation is causing many consumers to scale back their discretionary spending.

“With the right mix of rewards and exclusivity in place, the astute retailer can turn discretionary spending into non-discretionary spending,” PYMNTS wrote.

Best Buy could use that boost, as the company released earnings last month that showed consumers spending less at its stores, with quarterly sales down 10.1%.

“In this environment, customers are clearly feeling cautious and making tradeoff decisions as they continue to deal with high inflation and low consumer confidence due to a number of factors,” Best Buy CEO Corie Barry said at the time.

Meanwhile, PYMNTS on Tuesday looked at the tightrope companies must walk in offering loyalty programs, finding the need for retailers to establish a correlation between the rewards payout and desired behaviors. In doing so, these companies can keep their rewards program from turning into a cost center rather than a profit center.

“Customers do not hold equal value,” the report said. “To optimize loyalty and profitability, a company should prioritize its top-tier customers by providing them with the most value. This approach creates a mutually beneficial cycle.”

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