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The urban legend in retail , membership warehouse clubs likeCostco, Sam 's Club, and BJ ' s manage to reduce their bottom line by selling merchandise, but make all of their money from annual dues.
Whether this is true or not, it seems that more and more retailers are rolling out paid subion programs in an attempt to both keep their customers coming back and earn a bit more money. silver.
The last to test it are Best Buy BBY and Urban Outfitters URBN fbs-ticker> but in addition to warehouse clubs, other businesses such as RH RH , Bed Bat BBBY h & Beyond and REI have all had paid programs for some time. Fees range from $ 20 lifetime at REI to what seems the most expensive, $ 199 at Best Buy.
Of course, the most grand membership program may be Amazon AMZN Prime which had around 142 million members last year and is expected to grow to 153 million by the end of next year. Members pay $ 119 per year to be a part of Prime, and while free two-day shipping is the big draw, a number of additional perks, including Amazon video streaming service and various freebies. on music, books and picture storage. (The warehouse club legend has since been extended to Amazon, by the way, with many observers believing it to be a prime source too.pale for corporate profits.)
All of these programs are separate and separate from the programs and clubs that many retailers operate that do not require an annual membership fee. All of them seem to have been spurred on by the loyalty programs that the airline industry ran decades ago and which have become entities on their own, often earning a lot of money for them.
Today, many retailers offer membership programs with a variety of benefits, all designed to encourage customers to buy from them more often. Supermarkets have become big supporters of membership and other well-known retailers with big programs include Starbucks SBUX fbs-ticker >, Target TGT fbs -ticker>, Nordstrom JWN , Ikeaand most drugstore chains. ShopRunner is the latest to adapt the membership model.
The Best Buy beta, which is currently being tested in select stores in Iowa, Oklahoma and Pennsylvania, is expected to expand this month to stores in Minnesota, North Carolina and Tennessee for a total of 60 locations by month-end, according to news reports. An existing program called Total Tech Support, also at $ 199 per year, remains available to customers outside of the Ram zones test program.
Buyers who have the Best Buy credit card get $ 20.99 off the base rate, and all members get free, unlimited tech support through the legendary Geek Squad service from the retailer, free shipping with no minimum and assorted goodies like longer warranties, free installation on most products and price offers on certain products. There is also a dedicated "concierge" service on call around the clock in the event of a problem with your washing machine at three in the morning.
"The goal of Best Buy Beta is to create a membership experience that customers will love," said Allison Peterson, CEO of the company, "and to empower them. trust throughout their relationship with Best Buy. "
The Urban Outfitters program, called UO UP and covering all company nameplates, including Anthropologie, Free People and Nuuly, was announced in an email to customers:" We Let's test our new membership program in your area (in this case Atlanta). Register early and take advantage. "
For $ 98, members receive an immediate $ 40 gift card, 15% off every purchase -" and yes, that's on top of promotions, sales and deals specials ”- and free shipping and free returns on all orders. There ishas a few fine print excluding a few premium brands, furniture deliveries, and orders from a handful of far-flung places. There are also "Members Only Benefits and Events", which have not yet been specified.
While this price is the highest of the array of paid membership clubs, Urban makes a point of saying that after the gift card it's $ 58 for the first year "which is a very good deal, to be confirmed " ("To be honest" for those who do not master the electronic language).
It is not known how extensive the testing of this program is, or if and when the retailer might expand it nationwide. "This offer is a test and we reserve the right to make changes at any time," he says, offering an exit option if it does not perform as the company hopes.
Many retailers will watch the Urban and Best Bu y programsto see how they are doing. RH and Bed Bath have expressed satisfaction with their programs, with RH saying members make up a very large percentage of the company's overall revenue.
Don't expect secret handshakes and obtuse passwords, but if these new entries prove to be successful, paid membership programs just might be the next big thing in the world. retail as more and more companies ... well join the club.