Best Buy Co. is cutting the price of its top-level membership plan by $20 and introducing a cheaper option for customers who want fewer frills.
(Bloomberg) — Best Buy Co. is cutting the price of its top-level membership plan by $20 and introducing a cheaper option for customers who want fewer frills.
The highest-tier membership plan will cost $180 a year, down from $200, starting June 27, the consumer-electronics retailer said in a statement Thursday. In addition, the company will debut a new “Plus” plan for $50 that will include less service support but still offers members-only pricing and free two-day shipping.
“We wanted something for members who didn’t want all the benefits,” Patrick McGinnis, Best Buy’s senior vice president of memberships, said in an interview.
Best Buy is trying to broaden the appeal of a program designed to build closer relationships with shoppers, a core strategic goal for the company along with expanding online sales and building health-related offerings. Best Buy has 5.8 million top-tier members, up from about 4.6 million a year ago, Chief Executive Officer Corie Barry told analysts and investors in March. She said at the time that the company was weighing a “more value-oriented” option.
In addition to lowering the price of its elite membership, Best Buy is replacing standard installation services with periodic promotional offers. Installation isn’t as important to many customers as other benefits, the company says. The top membership will still come with comprehensive product protection, extended returns and enhanced free shipping, as well as price discounts.
The company will also continue to offer a free membership plan that includes streamlined checkout and free shipping without the two-day guarantee. That program has about 100 million members, of which 40 million to 45 million are active.
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