Technology rapidly changes. High tech items like computers, tablets, and mobile phones are being outdated every 2 years. Consumers are more frequently feeling a personal drive of wanting the newest technology. The question becomes how often should one upgrade; will consumers buy as rapidly as technology changes? Best Buy is betting customers will upgrade more rapidly, hence the buyback program. For a predetermined price, customers can enroll in the program which outlines a tiered value of depreciation within a two year window for most items. While Best Buy attempts to meet a demand for the changing market, it does not go the distance to meet consumer’s needs.
Best Buy, in an effort to turn around a 30% fall in operating profit for Q2 2011, is taking advantage of a market penetration opportunity by providing services that address the need for the changing market. Hopefully for them, this strategy will strengthen the relationship with the recipients of this program by insuring repeated business. However, most people will not find this to be the best economical choice. Often times, the fee associated with the program is more than the amount returned in a reasonable time. It may only benefit customers who upgrade to the latest technology extremely frequently. For instance, the average middle class consumer will not buy a $2,500 television to have it exchanged within the first six months, making the fee for the program more expensive than the return. There is no gain, except paying an exorbitant disposal fee. For others, it makes sense to upgrade cell phone devices more frequently than two years, thus making the buyback program a no brainer.
Best Buy is trying to meet the needs and concerns of people trying to stay a step up on technology but doesn’t quite go far enough to really address the problem. The only value in this “Future-proof” program to consumers is on the more disposable, easily upgradable hand held devices we’ve fallen in love with, the mobile phone. For other high tech items, Best Buy’s “head in the clouds” program will not work.
