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Best Buy fights showrooming with new mobile-focused loyalty program

Best Buy has revamped its loyalty program with mobile playing a key role in improving the in-store experience and offering consumers exclusive deals.

The big box retailer has launched a new loyalty program called My Best Buy that places a greater emphasis on Best Buy’s iPhone and Android application. Previously Best Buy’s program was called Reward Zone, and all consumers with a Reward Zone account will automatically become My Best Buy members.

“As part of the ‘more mobile’ benefit with My Best Buy, customers will get bonus points for checking-in, so, My Best Buy members will receive bonus points for check-in via the Best Buy mobile app when they visit any Best Buy store,” said Jeremy Baier, spokesman for Best Buy, Richfield, MN. “Members will also receive special promotions exclusively through the Best Buy mobile app.

“The launch of My Best Buy is the first step in our journey to make shopping with Best Buy as rewarding as possible,” he said.

Upping loyalty initiatives
The My Best Buy program has two mobile components within the company’s mobile app: An in-store mode and exclusive deals.

In July, Best Buy updated its mobile app to include a new feature that only shows up when a consumer is inside a store. In exchange for checking-in to a geo-fenced Best Buy location, consumers could receive 10 Reward Zone points (see story).

This app update is playing a critical role in how Best Buy is positioning its new loyalty program as an in-store component for shoppers.

Best Buy has now rolled out a second app update to its iPhone and Android app that make the My Best Buy program more prominent at the top of the screen.

The app also now lets consumers view their points, past purchases and learn more about the benefits of a loyalty program membership.

The app also includes a call-to-action with a member’s telephone number and account number, which makes it easier for consumers to quickly view the details associated with their account.

Best Buy claims that its Reward Zone program has 40 million users, all of whom will now be transferred over to My Best Buy.

Points from existing Reward Zone memberships will automatically be applied to My Best Buy accounts.

Best Buy’s loyalty program will continue to offer consumers one point for each dollar that is spent.

My Best Buy is divided up into two levels of membership: Elite and Elite Plus. As consumers spend more money, they unlock additional rewards, such as free shipping or extended dates for in-store returns.

For example, Elite members have 30 days to return purchases in-store, and Elite Plus members have 45 days.

Members of the new rewards program will also gain access to special in-store events and promotions.

Best Buy’s new app

In-store opportunity
Playing up loyalty is one of the key ways that mass merchants such as Best Buy are keeping consumers from showrooming in-store.

Best Buy’s new loyalty program is rolling out right as marketers are gearing up for holiday shoppers, when consumers are often looking for the best deal.

Additionally, the loyalty tie-in with the new in-store mode is a smart move for Best Buy since the app taps into different shopping contexts.

“The advantage of receiving loyalty benefits on mobile versus desktop is the ability to do location-based targeting,” said Marie Ng, vice president of client solutions and innovation at Millward Brown, New York.

Ms. Ng is not affiliated with Best Buy. She commented based on her expertise on the subject.

“Being able to capture consumer attention while they are in close proximity to the store, provides a timely, relevant way to encourage visitation,” she said.

Although in-store modes do offer significant opportunities for big-box retailers, there are not many taking advantage of the feature.

In fact, a recent report from EKN Research found that only one in 10 retailers offer in-store modes within their apps (see story).

Brands that are betting on in-store modes of apps include some of Best Buy’s biggest competitors: Target and Walmart.

For example, Target recently rolled out an app update that focuses more heavily on the in-store experience with location-based circulars and a beta shopping list feature (see story).

“In-store check-in is great because it enables the customer to declare when they are in-store, and in turn gives the retailer the chance to serve up a more personalized in-store product and service experience,” said Scott Robinson, senior director of loyalty consulting and solutions at Maritz Loyalty Marketing, Toronto, Ontario, Canada.

Mr. Robinson is not affiliated with Best Buy. He spoke based on his expertise.

“We certainly see tremendous benefit for mobile in a loyalty context in retail, not only for capturing purchase activity after it happens, but more importantly for influencing a potential purchase right before it happens,” he said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York