Best Buy's sales boost strategy has a major flaw.
The Best Buy logo is seen on display at the Best Buy store on December 12, 2006, in San Francisco. Best Buy Co. reported that third-quarter earnings rose 8.7 percent to a net profit of $150 million, up from $138 million one year ago.
A retailer claimed that the e-commerce giant's membership program will no longer work. When the global COVID-19 pandemic began, Best Buy and other giant retailers offered big sales.
This is because many consumers want to purchase many gadgets just to help them get through quarantine. But, this is no longer the case since the world is already getting over the COVID-19 health crisis.
Best Buy's Sales Boost Strategy Has One Major Flaw
According to Entrepreneur's latest report, the days of the COVID-19 pandemic are over.
A sign marks the location of the Best Buy store on August 24, 2021, in Chicago, Illinois. Best Buy reported an increase in second-quarter sales of nearly 20% as consumers purchased electronics to adjust to lifestyle changes related to the ongoing pandemic.
Telsey Advisory Group Retail Analyst Joe Feldman explained that although Best Buy has a good sales strategy, it is in a very tough market.
"People just aren't buying electronics these days, and you're seeing it across the spectrum, whether it's Walmart, Target, Costco, Amazon," he explained via CNBC.
Feldman explained that gadgets and other electronics are no longer in demand, especially those big-ticket electronics.
Aside from this, Joe also pointed out the membership program of Best Buy, saying that it has not been a "Gangbusters success."
He added that the membership program might not become successful because consumers are no longer buying new devices.
Best Buy's Membership Program
The giant electronics retailer launched its TotalTech membership two years ago, which originally cost $199.99 per year.
Now, Best Buy plans to change this membership program to make it its top tier "My Best Buy Total." The membership program's new version is expected to offer cheaper service tiers to attract more consumers.
It will be divided into three categories:
- The first tier will cost $179.99 per year, offering 24/7 tech support, 20% off repairs, two-year product protection, and other benefits.
- The second tier will cost $49.99 per year, offering free two-day shipping with no minimum purchase, members-only prices, and other additional benefits.
- The third tier will be a free membership tier, offering free shipping with no minimum purchase.
Here are other stories we recently wrote about Best Buy:
In 2022, Best Buy's Prime Day version offered discounted "Super Mario" games and watches. Meanwhile, Best Buy's PS5 restock offered the "God of Ragnarok" bundle.
For more news updates about Best Buy and other giant retailers, always keep your tabs open here at TechTimes.
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