Best Buy reportedly rolling out try-before-you-buy option
Best Buy is reportedly preparing to roll out a new try-before-you-buy program later this month, under which customers shopping its website for cameras, drones, audio equipment and fitness trackers, will be sent to a third-party site where they can rent the items on a trial basis and have a percentage of the rental price applied to an eventual purchase, Recode reports.
The third party involved is Lumoid, a San Francisco-based startup that uses items that were bought from Best Buy and later returned as rentals. Lumoid credits about 20% of the rental price back to customers to use as a credit if they purchase the product they rented, which also could be purchased at a discount because the products were previously owned.
Lumoid told Recode that roughly one out of every three customers that rents from Lumoid goes on to purchase the item.
Best Buy is trying harness something that's already common practice among consumers — the concept of buying something to figure out if you really want it, knowing full well there is a decent chance you will eventually return it.
It's perhaps a cumbersome way to find out if a purchase is really worth making, but it has become a culturally acceptable method. While convenient for consumers, it's incredibly costly for retailers because they can't sell such "open box" item as new at full price once iffy customers have been fiddling with them, meaning they are likely to be sold through the retailers or other parties as "previously owned," with price tags to match.
With a try-before-you-buy program, Best Buy is looking to divert that sort of activity, and convince a customer who normally would buy and return later to pay an additional fee to rent an item for several days to decide if they really want it. The retailer recognizes that such a fee might not be attractive on all products, and for now seems to be reserving it for a handful of bigger-ticket tech products.
The program could also help Best Buy capture a prospective customer's attention earlier in the buying process while they are still researching a purchase. Amazon has done very well in making itself essentially a shopping search engine to be used by consumers in the earliest phases of their product hunts, and Best Buy may feel it can get in on that action by enticing customers to try products without a full commitment.
This is overall a solid move by Best Buy to get a bit more aggressive and creative in how it woos customers at a time when it's showing some positive results on both the brick-and-mortar and e-commerce sides of its business. The only aspect of this that raises some questions is Best Buy's reliance on a third party to make it happen.
Perhaps its would prove costly and logistically tiresome for Best Buy to offer this program on its own, and it may just view Lumoid as a unique sort of after-market channel to help it clear some extra sale, but it's also probably safe to assume Lumoid is taking a cut on the sale of already-discounted products (Best Buy declined to discuss financial terms of the partnerships with Recode). Still, if Lumoid can turn a trial customer into a return customer for Best Buy, the retailer will feel it's a partnership that pays off.