Dive Brief:
- Best Buy will add a points system to its paid membership programs starting June 4, the company announced Monday.
- Members will receive 1% of their spend as rewards points, and members who pay with a My Best Buy credit card will earn 6%. Customers can redeem points for reward certificates, available in $5 increments, for use on future purchases.
- Members of My Best Buy Plus and My Best Buy Total will be able to track their points in a new digital membership hub on Best Buy’s website and app and view available rewards in their digital cart and at checkout.
Dive Insight:
Best Buy’s loyalty offerings have traditionally focused on immediate benefits, and the addition of a points system could add another layer to its value proposition.
Currently, both of Best Buy’s paid loyalty subscriptions offer members immediate access to features like free two-day shipping and exclusive promotional events. The higher-priced My Best Buy Total program adds 24/7 support and a discount on repairs, among other perks.
More than 80% of Best Buy customers say they want to earn points when they shop, according to the retailer’s data. The new points system aims to help it craft the experience its shoppers want.
“Our customers have been clear about what they want from us: reward points, convenience and exclusive benefits,” Jennie Weber, chief marketing officer at Best Buy, said in a prepared statement. “We’re bringing all of that together across our Plus and Total memberships to deliver even more value for them — in a way only Best Buy can.”
Loyalty points help retailers improve customer lifetime value, according to Dan Woods, global market leader for retail and e-commerce at Alorica. These long-term incentives work alongside short-term perks to build stronger overall engagement.
Brands ought to “offer immediate rewards then evolve the program to focus on loyalty and stickiness,” Woods said in an email. “Companies winning with their loyalty programs are intentionally layering their rewards.”
Brands can create a competitive advantage by linking every short-term interaction with a clear long-term path to value, according to Woods. A hospitality loyalty program, for instance, can offer extra points on a certain weekend, which is a short-term incentive. If those points also accelerate a customer’s progress toward the next loyalty tier, the promotion becomes a long-term loyalty driver as well.
Best Buy will also raise the cost of My Best Buy Total from $179.99 annually to $199.99 annually starting June 4. The price of My Best Buy Plus will remain at $29.99 annually.
