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Is Service Subscriptions, The Next Big Thing For CE Retailers

As Australia comes out of lockdown and with record purchases of consumers electronic goods and appliances, the big question is whether retailers selling these goods should follow US retailer Best Buy’s lead and move to invest in developing tech support membership programs and closer relationships with their customers.

Technology is not getting simpler, it’s becoming software complex, and a vast number of consumers won’t admit it, but many are confused and above all don’t understand how to fix problems that in most cases are software related on a new hardware device they have recently purchased whether it be a new mobile or cloud-based service on a device.

After an extensive trial Best Buy is launching a new tech-support membership program nationwide, offering subscribers services such free installations and discounts on repairs as the big-box retailer looks to move beyond just selling gadgets.

They claim that they will be there to answer customers questions, but there is a cost, $275 for an annual subscription.

The new Best Buy Totaltech plan is being rolled out after a pilot program that began in April, the company said in a statement last night.

In Australia JB Hi Fi boss believes the concept has merit and is worth investigating.

“We are not asking people to pay for a service, we are already delivering value at The Good Guys with our Concierge service which offers Gold Service benefits for our customers”.

Priced at $275 a year, the Best Buy program also includes exclusive pricing, as much as two years of protection on most purchases and free deliveries, among other perks.

The retailer is looking to generate more sales from services — and keep pace with competitors such as Amazon and Walmart subscription services which are taking off in the USA as consumer become time poor and are quite prepared to pay an annual fee for service.

The concept was first pioneered by Amazon with perks such as free and expedited shipping and other benefits.

Today Amazon has a booming Amazon Prime business with millions of consumers quite happy to pay a monthly fee for benefits such as TV content.

Best Buy originally offered its pilot program, called Best Buy Beta, at about 90 of its more than 900 U.S. stores. Members of that program are now being folded into Best Buy Totaltech, as will customers in the company’s “Total Tech Support” and “Geek Squad Tech Support” plans.

Darren Simmons the CEO of Acer told ChannelNews that he believes that there is a big market in Australia for paid services.

“Consumers will pay for services and a premium benefit. Price in most cases is not an issue all a consumer wants is a problem fixed or a benefit as part of a package”.

He said that the ideal market for such a service is consumers aged between 40 and 80.

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