POS/PAYMENTS

Glitch affects Starbucks pricing

BY CSA STAFF

A computer error caused Starbucks to overcharge some customers and forced the coffee giant to disclose a planned price increase.

In a brief statement released on the retailer’s corporate blog at about 8 p.m. ET Friday, July 1 and updated about 11 a.m. ET Saturday, July 2. Starbucks said a price adjustment was prematurely entered into the POS systems of U.S. company-owned stores. As a result, some customers were overcharged by as much as 30 cents for their beverages.

According to Starbucks, the error had been rectified as of the morning of July 2. The company is requesting any customer who believes they were overcharged contact its customer service department to rectify the situation.

Starbucks did not specify how long the error was in place or how many customers it thinks may have been affected by premature price increases. The company also did not elaborate on what products would have higher prices, or what the new prices will be. The blog post only stated that on July 12, Starbucks is planning a “small price increase on select beverages.”

Starbucks deserves kudos for directly admitting to the error (although the timing during the long July Fourth weekend may or not have been coincidental). Between the company’s honesty and the small amount of the overcharging, it is unlikely any lasting negative brand impact will occur.

What is of more concern for Starbucks is that both customers and rival coffee retailers now have advance notice of an upcoming price change. Small errors can have big consequences, and in an age of automation and connectivity, more small errors can happen more quickly than ever before, to enterprises of any size.

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FINANCE

Survey: Back-to-school spending increases — but not across the board

BY CSA STAFF

Parents are opening their wallets for the upcoming academic year, but being selective in what, where and how they buy.

According to a new survey of parents of children in grades K-12 and children entering their freshman year of college by The Rubicon Project, more than a third of all parents (34%) and nearly half of college freshman parents in particular (49%) — have already started back-to-school shopping. Sixty-one percent of all parents plan to spend more than they did last year, spending approximately $917 per child on average. Freshmen parents plan to spend $1,378 per child, almost twice the $684 the average K-12 parent plans to spend.

This year, parents plan to spend the bulk of their increased back-to-school budget on tech-related items. While school supplies and apparel remain top priorities, the biggest budget item for both K-12 ($343) and college freshmen parents was technology ($470). For K-12 parents, apparel ($233) was the second-largest spend, while dorm supplies ($324) were second-biggest expenditure for parents of college freshmen.

For the first time most parents plan to skip brick-and-mortar outlets for their tech purchases picking Amazon as their go-to retailer for technology-related items. Sixty percent of all parents surveyed plan to use mobile devices for some back to school shopping — 30% plan to do at least a quarter of their total shopping on mobile devices.

When it comes to how they will shop, more than half of parents surveyed plan to shop for technology and telecommunications online, while apparel, school supplies, and food and beverage remain primarily brick-and-mortar shopping purchases.

Amazon claimed the top spot for technology as parents increasingly turn to the online retailer for major purchases such as laptops, tablets and other devices. Wal-Mart remained the top retailer for apparel (66%) and school supplies (77%). For K-12 parents, Amazon has moved ahead of Staples as the third-most-popular destination for school supplies compared with 2015, when Staples accounted for 39% and Amazon 38% of spend in this category.

Nearly one-third (30%) of parents surveyed will do at least 25% of their back-to-school shopping on a mobile device, with parents of college freshmen (42%) significantly outpacing K-12 parents (25%). Dads outpace moms in mobile purchasing as 41% of dads said they will do at least a quarter of their online shopping on a mobile device, compared to just 24% of moms.

Not surprisingly, retailer mobile applications are becoming increasingly popular as almost half of parents surveyed (47%) have the Amazon mobile application and 40% of college-bound freshmen parents utilize at least three shopping apps. Seventy-one percent of parents plan to use retailer apps before they make a purchase. Sixty-six percent use mobile apps to compare prices while 64% use them to find out about sales.

Parents are also becoming increasingly comfortable with in-app purchases, with more than a third of all parents allowing their children to make them.

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REAL ESTATE

This big-box retailer is still expanding

BY Marianne Wilson

PGA Tour Superstore is growing its retail presence even as many other big-box stores downsize.

The chain will open a 45,500-sq.ft. store at Woodlands Shopping Center, Houston, in a former Sports Authority location, this fall. It’s the first Houston location for the company, whose controlling owner is Arthur Blank, co-founder of Home Depot.

The new store will be staffed with PGA of America teaching professionals and feature up to 14 state-of-the-art swing simulators and hitting bays, and an expansive putting green along with an in-house club making and repair facility. Along with equipment and accessories, PGA Tour Superstore offers an extensive selection of men’s, women’s and juniors’ golf apparel and footwear.

“Houston represents a premier market for our expansion and the Woodlands is an ideal location to introduce what we believe is the best experience in golf retail,” said PGA Tour Superstore president and CEO Dick Sullivan. “We are coming off of a record-breaking grand opening in Minnetonka, Minnesota, and we know that our focus on experiential retail with huge assortments and passionate people will continue to allow us to grow. We are redefining golf retail, and we are being opportunistic about selecting key new locations around the country.”

In addition to the location at Woodlands, PGA Tour recently took over another Sports Authority location, in Glendale, Arizona, which will open in 2017. New stores in South Carolina and Florida are also slated for next year.

“We couldn’t be more bullish about our future and we will continue to focus on inspiring our customers to love the game as much as we do,” said Sullivan.

PGA Tour Superstore is operated by Golf & Tennis Pro Shop, Inc., a subsidiary of AMB Group, headquartered in Roswell, Georgia.

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