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🛍️ Best Buy: Best Membership?
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🛍️ Best Buy: Best Membership?
Best Buy Inc (BBY) is set to launch a new membership program to acquire new and retain existing customers as retailers shift to digital. (Tweet This)
Background: Founded in 1966, Best Buy is a multinational retailer of technology and entertainment products, among others. The company went public in 1985 and currently has a market capitalization of $29.9B and a workforce of 155k.
The evolution of consumer shopping behavior due to the pandemic worked best for the consumer technology sector. Long before the pandemic, Best Buy, with its big box stores that at once enabled shopping while providing extensive support services to consumers through extensions such as the Geek Squad, gained a loyal customer base.
As work from home took center stage in people's lives, the foundation was already built for Best Buy to support customers better than ever. The company had already rolled out a five-year plan to focus on services, e-commerce, and healthcare. Best Buy's membership program, Tech Support, was in play costing $200 annually before the likes of Walmart (WMT) and Amazon (AMZN) came in with their offerings.
Membership programs, in general, have become the new channel of customer acquisition and retention for retailers overall. A recent development is on the anvil for Best Buy as it works to stay ahead of the competition.
What Happened?: Best Buy Beta, which is already in the pilot stage in a few locations, is slated to expand nationwide this year. Best Buy Beta replaces Tech Support and will offer free installation services, deliveries, and unlimited technical support to its customers for the same price of $200.
Additionally, Best Buy plans to keep up with Amazon and Walmart in the consumer technology sector. Amazon's Prime membership program and Walmart+ offer similar services in consumer technology, with better distribution. Hence, Best Buy seems to be on its toes, offering a lot more, hoping to acquire new customers.
Moreover, Best Buy has forecast a reduction in sales for 2021 as life goes back to normal on the back of the US's successful vaccination drive. With the membership program, Best Buy hopes to maintain and grow sales beyond the pandemic.
As digital takes on, the methods and tactics may evolve, but competition remains the same. While Best Buy is not a giant, it seems ready to fight tooth and nail to hold its own in this sector.
Market reaction: BBY closed the day at $119.62, down 0.80%.
Company Snapshot 📈
BBY $119.62 - 0.97 (0.80%)
Analyst Ratings (29 Analysts) BUY 45% HOLD 41% SELL 14%
Upwards: S&P closes at record on tech boost as U.S. Treasury yields retreat (SPY +0.47%)
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