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What Best Buy’s new membership program means for shoppers

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Best Buy launches new membership program to rival Amazon Prime. Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi discuss the details.

Video Transcript

MYLES UDLAND: Brian Sozzi wants a bit of the membership game. Best Buy getting in the mix now, and the other stock that has the ticker extremely close to Best Buy-- third B in there, BBBY-- Bed, Bath trying to get in the game as well.

BRIAN SOZZI: Yeah, so Best Buy taking the internet by storm. Actually, this is trending today on Google News. It caught our attention-- Best Buy Beta. Best Buy Beta, a new subscription service at a Best Buy now in pilot form, 199 bucks a year. And I'd say it's pretty compelling. It's being tested in Iowa, Oklahoma, and Eastern Pennsylvania-- soon it will be in Minnesota-- that's Best Buy's home, where they are based-- North Carolina, and Tennessee.

But a couple of interesting items here to this subscription plan. You get exclusive member pricing. You have unlimited Geek Squad support, two years of protection for most products, and free standard shipping. So this is a pretty compelling offer that Best Buy put together here. And it really reflects a couple-- really, two things here and why you have seen this now from Best Buy. Also, Walmart Plus launched late last year. And to your point, Bed, Bath and Beyond has Beyond Plus. You pay $29, and you get off 20% off your purchases and free shipping.

One, it's recurring revenue. Retailers are all looking to drive recurring revenue like Amazon Prime. So they're trying to get on that game. Use that-- get that recurring revenue in, and then go spend it elsewhere, likely on tech improvements to go compete with Amazon and Amazon Prime. And then also, two, keep in mind, a lot of retailers like a Best Buy, like a Walmart-- Target does not have a subscription plan. I wouldn't be surprised that they're working on it. But they have gained a lot of customers, a lot of new customers over the past year of the pandemic. They want to keep these customers. And a great way to do it-- launch a subscription service and make them pay for something every single month.

JULIE HYMAN: I think we should introduce a subscription or a membership, but it can be free. And all people need to do is tweet at us to get to become members of the show.

BRIAN SOZZI: Oh, we do.

JULIE HYMAN: You, too, can become a member of the Yahoo Finance 9:00 to 11:00 AM show, everyone. Just tweet at us. No?

BRIAN SOZZI: We do have a subscription.

JULIE HYMAN: Think we should charge--

BRIAN SOZZI: It's Yahoo Finance Plus. Yahoo Finance Plus, Julie. It's tremendous.

MYLES UDLAND: I knew, Sozz. I knew, Sozz.

BRIAN SOZZI: You knew it was coming.

MYLES UDLAND: Sozzi is a good company man. I knew he was--

BRIAN SOZZI: You teed it up, and I'm hitting a home run. There we go. That's what I do.

MYLES UDLAND: We should-- I mean, look. We should have, like, stickers or something. And we can send people stickers if they tweet about the show three times a week or, you know. I mean, this is, like, basic 101, how you build, like, a newsletter marketing type platform. So maybe we could think about something like that.

You know, Sozz, on the Best Buy story, though, we were just chatting about this before we came live. I was at Bed, Bath recently, and I saw, when I walked in the store, a $29 annual-- I don't know what they were calling it-- Beyond membership, I guess, something like that. I should have looked at the sign more closely. And you get 20% off every purchase. Now, Bed and Bath is notorious for sending everyone across America 20% off coupons all the time.

But I thought that was an interesting idea. I don't know if they've announced this nationally, how Bed, Bath is thinking about rolling this out. I should note this location is, like, a mile up the road from Bed, Bath international headquarters down in Union. So maybe they're trying it locally. But it does seem to be the way that every business wants to go.

BRIAN SOZZI: Well, go sign up, Myles. I know you're now living that suburban life. Need to pack out that big giant garage of yours with more than just very fancy weights. Go out there and buy some pillows and sheets. But I will say this, Myles. If you launched your own subscription product, I hear that you will give out your first 200 free stock picks. And I'm signing up for that, baby.

JULIE HYMAN: You get--

MYLES UDLAND: Well, you are--

JULIE HYMAN: Did he get a Series 7 without us knowing about it?

MYLES UDLAND: Well, look, if I'm just selling it on the internet and I'm saying none of this is officially investment advice, then I don't need to have a Series 7, you know? All you got to do is--

BRIAN SOZZI: Good point. Very good point.

MYLES UDLAND: All I got to do is put the disclaimer, which, I mean, we can talk about stockpicking newsletters another time.