As reported by Retail Insider, Best Buy Canada introduces a new laptop subscription service which enhances the customer experience with discounts, exchanges, and service. This insight discusses the implications of the subscription service on revenue generation, customer engagement, and customer acquisition.
Table of Contents
What Is Best Buy Canada Laptop Subscription Service?How Is The Laptop Subscription Service Good For Consumers?How Is the Laptop Subscription Service Good For Best Buy Canada?EngageAcquireOnboardMaintainOther ConsiderationsFinal Words
What Is Best Buy Canada Laptop Subscription Service?
Many consumers buy laptops and use this for years. While they would rather get a new model every couple of years like they could with a mobile phone, the high initial laptop costs deter most from doing so. Enter Best Buy Canada with a new laptop subscription service that promises to reduce friction on laptop replacement, assists customers with their computing needs with the latest products, and enables to save money in the process.
This is how it works in a nutshell, instead of paying the entire amount of a laptop. Customers can join a subscription service for two years with a monthly no interest payment. The month payment amount is calculated the (Total Cost of the Product – Product’s Buy Out Value) / 24 Months).
At the end of two years, customers can pay the product’s buy out value and keep the laptop or trade it in for a new laptop of their choice and restart the process. If the customer decides against buying a new laptop, they can return it in good condition to a nearby Best Buy Canada location.
Best Buy Canada’s New Laptop Subscription Service (Example taken from bestbuy.ca). Note that qualified customers will pay an administration fee of $50+tax to start the subscription service (waived for Best Buy Members) and are responsible for the Environmental Handling Fee and taxes on the laptop at the initial purchase.
How Is The Laptop Subscription Service Good For Consumers?
The new service benefits customers in five ways:
1. Save money – Customers pay a monthly charge at 0% financing over 24 months. This payment is reduced the buy-out value split over the same time period. In the example above, customers can save up to 20% of the total costs of the laptop.
2. Access to new technology sooner – Many technology adapters like to try new laptops when they are released. This new subscription service provides them an opportunity to trade their laptop for a new model after two years.
3. Reduce friction – While the buy-out value is likely lower than the marketplace price, working with Best Buy Canada reduces friction and time for consumers to list and sell the laptop in a public marketplace that may feature fraudsters and bad actors.
4. Gain flexibility – Customers has the flexibility to get a new laptop model from the same or a different brand every couple of years. They can also decide to keep the laptop by paying the buy-out price after two years. This arrangement gives customers time to get familiar with the product and decide on what to do next with less remorse.
How Is the Laptop Subscription Service Good For Best Buy Canada?
The new subscription services offers Best Buy Canada new opportunities to engage, acquire, onboard, and maintain customers. This is how:
With a laptop life expectation hovering at between four to five years or longer based on technology components, extended warranty arrangements, product quality, and software updates, customers have less reasons to visit Best Buy Canada often. The new subscription service changes this behavior by encouraging customers to visit, at a minimum, every two years to decide on a laptop’s fate.
Higher visit frequencies would give Best Buy Canada more opportunities to engage customers with new products and services ready for purchase or consumption.
In addition to more engagement touch points, the electronic chain can empower customers to buy another laptop at a shorter replacement cycle. This improves overall sales in the laptop category and help move inventory.
The service’s two-year cycle also creates some revenue smoothing over the year. With a potential fixed built-in discount through the buy-out value, consumers can buy a new laptop at any time of year instead of waiting for big sales like Black Friday.
Snowball effect – Whether the customer keeps the laptop or replace it with a new one, Best Buy Canada can encourage them to buy accessories or services. This creates a snowball effect on revenue generated that would otherwise be unavailable due to longer ownership.
Onboarding more customers with new laptops provides additional data points for Best Buy Canada to evaluate consumer tastes, satisfactions, and expectations. This might translate into how the retailer will procure future inventory on different products, impact promotion/marketing spend, and create meaningful content.
Beyond data points, Best Buy Canada can offer enhanced how-to programs and new product introduction through its blog, Geek Squad services, and social media channels in order to make the onboarding process more seamless and interactive.
Maintaining customer relationships and loyalty plays an integral part of Best Buy Canada’s strategy to innovate and serve the market. The new subscription service allows the retailer to understand and manage consumer needs on a more time and personalized fashion.
Computing requirements change whenever new use cases are introduced (e.g., virtual reality/augmented reality will need a mix of new hardware/software). This new subscription service allows the brand to build a better customer profile based on more frequent engagement, transaction history, and duty of care.
This new subscription service can be a big success for Best Buy Canada if they set up processes to manage the engage, acquire, onboard, and maintain components of the customer journey.
Given the newness and unawareness of the service, the retailer should use more resources initially to educate the public on the service’s merits with in-store showcases, social media posts, consumer facing media interviews, physical activations, and mobile application notifications, etc. Metrics should be collected to monitor awareness, adoption, intakes and satisfaction.
The goal is to build consumer trust and familiarity on the program. Beyond the channels mentioned above, brands have successes with contests to build awareness.
Employee training and empowerment will be important to ensure would-be subscription service customers are supported.
Quoting Retail Insider’s interview with Mat Povse, SVP Retail & Geek Squad Services, and Best Buy Business at Best Buy Canada,
“There’s a lot of great reasons why we think Monthly Subscription makes sense. First, we all love looking forward to our next piece of technology, whether it’s a new phone, or laptop or TV – it’s exciting! – and a Best Buy subscription makes it hassle free. It’s a great way for some customers to afford that “even-better” tech they really wanted and pay for it over the term rather than all upfront. Finally, we’re also really committed to sustainability, so the “bring it back” nature of subscription helps us give old tech a new home.”
These are exciting times for Best Buy Canada as the brands evolves into a more agile sales philosophy focusing on serving consumer electronic needs proactively rather than passively waiting for unpredictable demands to appear.
Would you be interested in Best Buy Canada’s new laptop subscription service? Comment below.
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