It seems that Amazon has always been ahead of its time. The e-commerce giant has been reaping the benefits of Amazon Prime, its membership-based service, for nearly 15 years now, and it continues to dominate today's online market. In fact, it has become such a success story that other companies are now looking to start their own enrollment programs in hopes that they can tap into their potential as well.
One such company is Best Buy, which recently announced that it would be launching its own pilot program called Best Buy Beta. For $199.99 a year, members can enjoy exclusive perks such as free shipping, same-day delivery, special discounts, 24/7 tech support, concierge service, and extended warranties on various products. Currently, it has been rolled out to 60 stores across the U.S. and it plans to keep expanding in the near future.
As good as those benefits may be, there are a couple of cost-benefit considerations that consumers will be taking into account before they sign on the dotted line. Firstly, Beta's $199.99 annual membership fee is markedly higher than that of other similar services like Amazon Prime ($119/year) and Walmart+ ($98/year), and it doesn't help that its product offerings are pretty much limited to mostly electronics. Secondly, most consumers nowadays are already enrolled in at least one or more membership-based services, so it will be challenging for Best Buy to convert those consumers into Beta customers.
That said, there are two markets that Best Buy Beta could potentially attract: the start-up market and the work-from-home market. Due to the ongoing pandemic, both markets have seen a notable rise as of late as the workforce begins to shift to less traditional arrangements.
The former market, in particular, saw a 25% increase in 2020 alone, with the number of new businesses in the U.S. growing from 3.5 million to 4.3 million according to PYMNTS.com. While several start-ups fizzled out due to financial pressures, others swooped in to take their place, ushering in a new economic era that seemingly favors the up-and-coming. Luckily for Best Buy, these new start-ups are going to need a whole lot of tech to grow their business, and that's where Beta would come in handy.
The latter market, on the other hand, could also benefit from Beta's unlimited Geek Squad service perk. Not only does it provide tech support 24/7, but it also gives free installations and 20% discounts on various advanced services. Considering that a 90-minute Geek Squad visit normally goes for $49.99, subscribing to Beta may be worth it for those who use the service frequently.
Allison Peterson, Best Buys' chief customer officer, summed up the Beta program best in a recent company release: "This pilot offers premium service, complete with support aimed at anticipating our customers' needs." Only time will tell whether or not people will actually give the program a shot.
