Prices keep going up and shoppers aren’t down with it. Consumer spending slumped in May, up just 0.2%—the smallest monthly increase this year—per Commerce Department data released last week.

While the dip may seem marginal, unyielding inflation and a possible looming recession are fueling concerns around what will happen if costs keep rising and consumers keep spending less.

“When the prices initially go up and inflation hits, people don’t know how long it’s going to be around for…They haven’t adjusted their behaviors,” Jonah Ellin, chief product officer at 1010 data, told Retail Brew. “But the second time it happens, you start to worry. At which point, you start looking at, ‘How do I change my behavior? How do I change my habits to not end up with the same results?’”

Hard hitting: The first retail categories affected in those cases are “recurring” ones, or everyday essentials, Ellin said. “They’re going to try to penny-pinch on the needs, so that they can afford the things that they want,” he explained.

• Ultimately, shoppers will start looking for lower-priced replacements and make trade-offs, Ellin added, whether that be switching to private-label brands or “downgrading from the top tiers to the mid tiers, and from the mid tiers to the low.”

What consumers are likely willing to spend on, Ellin noted, are experiences like traveling and sticking to self-care routines (after spending so much time at home). 

• Premium retailers too, should be insulated since the category is a “step below where people start really looking at it and trying to economize,” he said.

Zoom out: While rising costs seem to be out of everyone’s control, there are some things retailers can do to brace for impact—starting with understanding customer preferences, Ellin said.

“There are the products that you can raise prices on, where there’s elasticity in the market, and there’s products where if you change the price, you’re going to seriously impact your price perception,” he said. “Retailers need to be very focused on, ‘What is the overall basket price, and how does it feel to the consumer at the shelf in terms of the way they perceive your pricing?’ Those who really focus on that price perception and put the customer first will come out ahead in this game.”—JS

If you’ve ever binge-watched Stranger Things, one thing you’re not a stranger to are all the products on the series. From Eggo (obviously) and Nike, to Coca-Cola and Burger King, and many more, Marketing Brew’s Kelsey Sutton recently dug into how all those brands made it onto the show—and why it is harder than it might seem:

“Everything that happens on Stranger Things is led by creative,” said Erin Schmidt, chief of product placement at BEN, which has worked to place 22 brands—including KFC, Oreo, Gap, Dunkin’, U-Haul, Milk, Dr Pepper, and Hardee’s—into the series throughout the years. “It’s not dictated by brands. And it’s not dictated by Netflix.”

The potential for brand integrations with Stranger Things became evident after Season One, after Eggo was depicted as the snack of choice for Eleven, played by Millie Bobby Brown, or when she crushed Coke cans with psychokinetic powers.

“After Season One, every phone call I got was, ‘I want to be in Stranger Things!’” Schmidt recalled.

Product placements are left to the discretion of the Duffer Brothers, the show’s creators, and there are no paid integrations, Netflix told Marketing Brew. To try to get onscreen, BEN works directly with the showrunners and prop masters to identify where there are opportunities for brand integrations, before determining what kinds of resources brands can provide to the set.

Click here to read the full story on Marketing Brew.—GT

Today’s top retail reads.

Hanging on: Some dry cleaners that survived the pandemic are now finding they have to raise prices to keep their businesses afloat. “Do I think I’m going to have to do another increase? I know I’m going to. I just have to go with what the market is doing,” said Missouri-based dry cleaner Tonya McCrea. (the Wall Street Journal)

On trend: The new essentials for luxury stores. (Business of Fashion)

Limited coverage: Why sunscreen in the US is so behind its counterparts across the world. (The Atlantic)

Lights, camera, Brew: Morning Brew is on YouTube! Our shows cover the tech, trends, and companies you care about—and don’t worry, we’re not jargon people. Watch here.

What happened in the world of retail this week in…1872 and beyond? Retail Brew takes you way, way, way back.

This week, grab your swimsuit and dive in:

• On July 5, 1946, a piece of fashion history was made: the debut of the bikini.
• Also on July 5, but in 1994, an unknown Jeff Bezos would start an unknown e-comm site that sold books called Amazon. And, well, we know where things stand now.
• And on July 9, 1872, John F. Blondel was granted a patent for his spring-loaded donut cutter, which made it easier to cut the hole out of our favorite morning treats.

Catch up on the Retail Brew stories you may have missed.

• Four experts on what excites them about the evolution of sustainable materials
• How shoppers plan to spend on Prime Day—and the rest of the summer
• A roundup of June’s major retail exec moves

Introducing Retail Brew’s newest debut ::drumroll:: The Sku: A Retail Brew Summit. FOMO is real, friends.

Here’s what’s on the agenda:

• Meeting demand and maximizing profit
• Managing your organization across channels
• Creating omni-channel engagement with customer journeys
• Sustainability: who is doing what and how?
• Using technology to drive sales

Early-bird pricing ends soon! Register now to save your seat (and some $$). Only $499 for a limited time!