Will access to hard-to-find gifts make Totaltech-heads out of Best Buy’s customers?
Photo: Best Buy

Will access to hard-to-find gifts make Totaltech-heads out of Best Buy’s customers?

Best Buy is launching a nationwide rollout of its Totaltech subscription program. Membership offers a host of service and purchasing benefits including unlimited technical support from the retailer’s Geek Squad, VIP service with access to dedicated phone and chat teams, exclusive pricing, free standard shipping of online orders, extended 60-day return windows, installation of most appliances and consumer electronics purchases at no extra charge as well as free haul-away on most products being replaced.

The program was successfully piloted as a “Best Buy Beta” beginning in April in designated store locations in Minnesota, North Carolina, Oklahoma, Pennsylvania and Tennessee. Best Buy is offering Totaltech memberships for $199.99 a year.

“Technology plays an increasingly crucial role in our lives today, and each customer needs technology in a different way,” said Allison Peterson, chief customer officer at Best Buy. “That’s why we created Totaltech, to not only meet all of these needs, but also to give them a heightened sense of confidence — in getting a great price, in using their tech and by knowing we have their back if something goes wrong.”

Totaltech members are also being promised deals ahead of the holiday season. The retailer said members will gain access to products expected to be in short supply in the lead-up to Christmas.

Subscribers will also be able to take advantage of Member Monday, a series of special events with exclusive deals on some of the hottest tech available through the chain. Member Monday kicks off on Oct. 18 and will pop up on select weeks throughout the season.

Best Buy said that all current members of its Best Buy Beta, Total Tech Support and Geek Squad Tech Support programs will be automatically upgraded to Totaltech membership in the coming days. The chain will send members an email welcoming them to Totaltech once their upgrade is completed.

The retailer is rolling out the program during the same period that it has kicked off a new branding campaign intended to demonstrate to consumers that Best Buy and its associates are there for them where and whenever it is needed.

The new spots focus on the chain’s customers and how they can turn to Best Buy’s blue shirts and Geeks for expert advice and to make the most of the technology it sells.

BrainTrust

"Best Buy is paving the way for rethinking the customer experience, increasing brand loyalty, and offering services that will set them apart from their competition."

Liza Amlani

Principal and Founder, Retail Strategy Group


"The biggest challenge in this area will be handling bots that buy up limited edition products before real humans can."

Kim DeCarlis

Chief Marketing Officer, PerimeterX


"Bottom line is that subscriptions need to be compelling as there are so many of them now and consumers won’t pay for loads of them unless there are very solid advantages."

Neil Saunders

Managing Director, GlobalData


Discussion Questions

DISCUSSION QUESTIONS: Will Totaltech increase the sense of loyalty that Best Buy’s customers feel for the chain? Will the combination of Totaltech benefits and Best Buy’s new branding campaign complement one another to drive product and subscription sales heading towards Christmas?

Poll

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Neil Saunders
Famed Member
2 years ago

Having access to hard-to-find products sounds like a nice benefit. However I wonder how this will work in practice. If there is a shortage of stock and Best Buy prioritizes members, then it worsens availability for everyone else and potentially drives those people elsewhere. If stock is very short and it can’t guarantee availability for members, then it potentially disappoints them and weakens the benefit. That said, I think other parts of the scheme such as special deals, technical support and so forth do have merit. Bottom line is that subscriptions need to be compelling as there are so many of them now and consumers won’t pay for loads of them unless there are very solid advantages.

Liza Amlani
Active Member
2 years ago

Best Buy is paving the way for rethinking the customer experience, increasing brand loyalty, and offering services that will set them apart from their competition.

The combination of benefits plus a new campaign is timely and subscription services are a smart reoccurring revenue model that will offset some of the supply chain disruptors crippling bottom lines.

Melissa Minkow
Active Member
2 years ago

I could see this being an intriguing deal for gamers or someone who has a frequent and ongoing need to interact with the brand, but otherwise, this strikes me as expensive and unnecessary. The perks are strong, but the need for a program like this has to exist at a higher level than I think it does.

Bob Amster
Trusted Member
2 years ago

If properly marketed and publicized, this would allow Best Buy to lead a sector of their already loyal customers into a new experience that those customers are sure to enjoy. Let’s wait and see how it plays out. I think this program will constitute an incremental piece of business.

David Spear
Active Member
2 years ago

$200 per year is pricey, but the program covers a wide range of tech-related equipment in your home. And let’s face it, nearly every device you buy now – computer, phones, watches, TVs, appliances, thermostats, HVAC – has between one and 10 computer chips in it. So, Totaltech has significant upside and if marketed and executed properly, this program will be very successful. It also has the opportunity to create an annuitized series of revenue streams for the company. The next move I’d consider is to extend this program into the health and wellness products that Best Buy offers, primarily targeting aging Boomers.

Gene Detroyer
Noble Member
2 years ago

This is Amazon Prime for Best Buy customers.

I would sign up today, except for multiple bad experiences with Geek Squad. If they fix that, they got my $199.

Ben Ball
Member
2 years ago

This sounds great — if I consistently buy two or more tech or appliance items a year and need the service aspects. But it seems a bit pricey to maintain multiyear loyalty among the customers who buy one new tech item a year and maybe an appliance every five or 10. I’m not sure it has broad enough appeal to sustain itself longer term.

David Slavick
Member
2 years ago

$200 a year, really? Has anyone experienced the Geek Squad service to date? Free shipping, no charge on delivery and takeaway on appliances. Special pricing when the business is controlled by MAP pricing during certain time periods. Any bets on the over/under for renewal rate year over year? How often will members realize enough benefit to offset the $200/year? What will be the attrition from Year I to Year II? 50% or greater is my guess. This is a horrible idea and clearly an attempt to shoehorn various services and get paid for it.

Way back when as in 25 years ago, BBY launched Reward Zone. It was a PAID program for $19.95 — in turn you got emails and cash back rewards at a decent funding rate. Over time, they dropped the paid program and today the value proposition for white label or integrated with their co-brand card is weak. Rule of thumb: give back 2x to what you charge. Do you think annually a consumer can realize over $400 in value to encourage renewal?

This program will die in two years from rollout. You heard it here. Thoughts?

Kim DeCarlis
2 years ago

Two interesting points about this:

First, is the ongoing trend from businesses of all types to move to a subscription model. This can help boost loyalty as Best Buy becomes the first stop for customers to address their home tech and service needs, and this financial model provides great visibility and predictability to Best Buy’s revenue.

The second interesting point is about members gaining access to products expected to be in short supply during the holiday period. The biggest challenge in this area will be handling bots that buy up limited edition products before real humans can. It will be important for Best Buy to figure out how to eliminate bot-driven disruptions during promotional and limited-release sale events. Equally important will be managing expectations: it is likely that Totaltech subscribers will quickly outnumber limited edition product inventory, setting up potential disappointment for those who subscribe and those who do not. Handling this well will be important to all Best Buy customers.