Best Buy doubles down on membership program as sales cool
In this article BBY Follow your favorite stocks CREATE FREE ACCOUNT
A shopper exits a Best Buy store during Black Friday sales in Brooklyn, New York, November 26, 2021. Brendan McDermid | Reuters
Best Buy said Thursday that it will double down on its membership program as consumers buy fewer discretionary items. Starting June 27, the program will have three tiers, including a lower-priced option that offers perks like exclusive discounts and access to hot products, the consumer electronics retailer said. The program will also have a new name: My Best Buy memberships. Best Buy is looking for ways to make money and drive customer loyalty as it deals with a drop in demand. Consumers are buying fewer electronics as they cope with higher prices of food and essentials, and some prioritize spending on travel, restaurants and other services. Plus, during the early years of the pandemic, many shoppers sprang for new laptops, home-theater systems and kitchen appliances — the kinds of purchases that people don't often repeat in the near term. The company said in March that it expects revenue to range between $43.8 billion and $45.2 billion this fiscal year. The total would represent a drop from $46.3 billion from the year-earlier period, and from $51.8 billion the year before that — but a revenue increase from before the pandemic.
CEO Corie Barry told investors on a March earnings call that Best Buy expects this calendar year to "be the bottom for the decline in tech demand." She said spending will bounce back because U.S. households have a record number of tech devices and will want to upgrade or replace them, especially as vendors debut innovative products. In the meantime, Best Buy also has taken steps to cut costs. It has had at least two rounds of layoffs, one in August and one in April. The company confirmed the job cuts, but declined to share any numbers.
Best Buy leans into loyalty
Source: CNBC
