It looks like Bed Bath & Beyond may be trying to take a page out of Amazon’s playbook. The retailer recently announced that it will be testing a new loyalty program, Beyond+, that is very similar to Amazon Prime.
The retailer is testing a program in which customers pay an annual fee of $29 and, in turn, receive 20% discounts and free shipping on all orders.
Right now it is invitation only; a visit to the retailer’s website indicates that it is not currently available and they are “not taking sign ups” – whether this is worded incorrectly or in an attempt to make it seem as though it’s the “next great thing” that everyone is vying for is unclear.
So, the question is: Will this work? And, will other retailers follow suit? Is this the way of the future for retail shopping?
In short, I don’t think so. Amazon has something that no one can touch. They’ve built an ecommerce business that is impeccable when it comes to price, delivery, and service. They have fleshed out their Prime program in a way that it encompasses many benefits outside of discounts and free two day shipping. Jet tried to model themselves after Amazon, and, despite the fact that Walmart recently bought the company, they are still lagging behind.
Here are some reasons as to why this may not as successful for other retailers outside of Amazon:
- In the case of Bed Bath & Beyond, consumers are heavily tied to their 20% coupon. But, will they latch on to this new program? My initial thought is that many will, at least the regular customers since it seems like a pretty good deal on the surface. But, they may miss out on those sporadic customers who rely on the 20% coupon to get them in the door.
- If this model expands across multiple retailers, it will take a hit. Why? Consumers are perfectly fine having a Prime membership but shopping at other retailers as well. If the bulk of the retailers they do business do follow this model, it will be a lot of spend in annual fees – consumers may be more selective of the retailers they do business with, which may leave some retailers left out of the equation.
- Companies may lose money. In the case of Bed Bath & Beyond, a $29 annual fee for their program seems a bit low, especially if they are targeting frequent customers. If this were to happen, would they need to increase prices to keep it working? Similarly, if it’s not as successful as they hope, it may mean a drop in customer traffic.
As a consumer, I do like the idea of paying an annual fee for discounts and free shipping (I’m an avid Prime consumer) for some of my shopping, though I think if a favorite retailer would go the path of Bed Bath and Beyond, I would carefully consider joining yet another program like this. It doesn’t mean I would stop being a customer, but it may shift my purchasing habits.
What are your thoughts about this new loyalty program? Good idea, bad idea? Share your comments in the space below – we’d love to hear from you!
