TRENDS

The Old College Buy

With college campuses across the country introducing virtual learning, home goods retailers with a minor in dorm decor are trying to recalibrate—and fast.  

First up: Bed Bath & Beyond yesterday said it’s launching a dedicated “College From Home” e-comm experience for anyone feeling move-in day FOMO.

• B3 will silo its dorm decor and lap desks on one page, along with interior design tips for remote learning setups.
• A loyalty program, College Savings Pass, will try to drive repeat purchases with an unlimited 20% off discount through Sept. 30—aka the end of Bed Bath & Beyond’s typical back to campus season. 

Not all parents will pony up for new furniture in addition to remote tuition. But others may be willing to upgrade their kid’s gaming beanbag to a desk chair. 

• “On the education front, what took place in the spring was meant to be a temporary measure,” said Phillip Jackson, co-founder of FutureCommerce, “but as we settle in for the long haul we will need more permanent solutions, i.e. real, dedicated workspaces.” 
• Bed Bath & Beyond noted that searches for desks and office chairs were up 200% YoY in July. 

Promoting discovery is key. “Consumers are looking for easy decision making right now–having core products or product bundles served up to them directly will help to drive sales,” Katie Thomas, lead at Kearney’s Global Consumer Institute, told Retail Brew. “It’s important to consider what products [students] may need from home, and position those accordingly.”

Desk dominoes: I can see specialty retailers in the home goods space, like Dormify, positioning their dorm essentials as plain old home improvement to meet the WFH moment. 

Solve for why this matters 

The pandemic has shown us how disparate industries—retail and higher ed, for example—deeply influence one another. It’s also demonstrated that large retailers have an easier time adapting than small businesses. College commerce isn’t an exception. 

• Some college town businesses generate 70–80% of revenue from student shoppers, per Business Insider; when campuses closed ahead of cap and gown season, sales evaporated.  
• As students start their cram from home sessions, those hyper-local businesses won’t have the same opportunities to rebrand like larger retailers have.

Looking ahead…promising vaccine updates invite the possibility that students will one day have a reason to buy twin XL sheets again. 

But some former dorm brands may need to position themselves as general home goods retailers even after campuses reopen: “If the pool of traditional college-goers shrinks (some will shift to online, some will opt out, some won't be able to afford it) then long-term I sense a pivot for these particular businesses,” Jackson said. 

GROCERY

Mirakl on Market Street

Kroger’s going where no retailer so many retailers have gone before: the third-party marketplace model.

Kroger will stock 50,000+ third-party products in an online marketplace powered by Mirakl this fall. Kroger already generates $121+ billion in annual revenue, but it’ll rise further with this setup:

• More products = more ops to connect with customers (duh).
• Kroger will likely demand commission fees from its third-party sellers. 
• Eventually, Kroger could upcharge third-party sellers for premier ad spots within its marketplace, à la Amazon.

Put it in context: While Amazon and Walmart publicly battled for e-comm share, Kroger quietly worked on its own e-comm investments. The latest? Since 2018, Kroger’s worked with UK autonomous fulfillment tech company Ocado to build stateside distribution centers and speed up its delivery services. 

• Those autonomous centers could optimize fulfillment for Kroger’s new third-party wing alongside its house brands. 

My takeaway: Kroger won’t overtake its biggest competitors with a self-invite to the third-party marketplace game. But it will increase cart volumes when shoppers can access more products.

SPONSORED BY CORDIAL

Become A Cross-Channel Champ

We know you are basically the perfect retailer—as shown by your fine taste in retail newsletters—but we also think you could learn a thing or two from REVOLVE. 

REVOLVE? Like the clothing company? 

Exactly. REVOLVE is the brand making big moves with their cross-channel savvy, using proven email strategies to connect with customers through their mobile app.

Now you can learn how REVOLVE got started on their cross-channel journey (and gather advice from other mobile app experts) with Cordial’s Email Marketer’s Guide to Mobile App Messaging. Their guide is focused on how email marketers are uniquely positioned to bring value to mobile app messaging programs.

Cordial will help you become a cross-channel, customer-centric champ—something you can’t afford not to be.

Check out Cordial’s guide of champions here. 

EARNINGS

Sprechen Sie 'Logistics'?

Writing about German e-comm giant Zalando’s record-breaking Q2 results is…

1. An international e-tail lesson
2. The closest I’ll get to a European vacation this summer

Revenue at Zalando, Europe’s largest online fashion retailer, jumped 27% to 2+ billion euros in Q2. Operating profit reached 212 million euros, more than doubling YoY. 

More Q2 stats: Active shoppers on the apparel platform rose 20% to 34 million...and it signed 180 new retail partners for its fulfillment program, a proprietary logistics service.

Zalando’s Q2 gains came mostly from its burgeoning logistics unit—though a quicker post-coronavirus rebound in Europe and shoppers’ emerging preference for low-return items (sweatpants) helped. 

Right place, right time. As European retailers raced to tap the global e-comm surge, they piled onto Zalando’s fulfillment solutions platform. Turns out, shipping orders for other brands has stronger margins than making the merch to begin with. Bezos would know.

Bottom line: E-comm demand won’t evaporate anytime soon, so Zalando’s well-positioned to continue growing. CFO David Schröder said it best: “We have come out of the first wave of this pandemic stronger than we went into it.”

WHAT ELSE IS BREWING

• Stein Mart filed for bankruptcy today and will close most of its stores.
• Instacart scored its biggest grocery delivery partner yet: Walmart. 
• Saks Fifth Avenue laid off an undisclosed number of store employees. 
• Under Armour is reportedly launching a sub-brand fronted by Stephen Curry.
• Whole Foods is hosting virtual home ec classes.
• Sur La Table, one of 2020’s bankruptcy casualties, sold for nearly $90 million.

NOW TRENDING

Some pandemic-era trends have already dried up like so many neglected office succulents. But one is still climbing, according to Google Trends data.

Quartz

Which trend’s global search volume is repped by the graph above? Here’s a hint: Brands ranging from Madhappy to Moschino are selling their takes on it...but it’s also DIY-able. Keep reading for the answer.

SWAPPING SKUS

I rounded up some of the hottest retail takes since “paid isn’t dead.” Pick your rhetorical cocktail below, then let me know which side of the debate you’re on.

• Should all retail brands think like wellness brands? (Fast Company)
• Shopify says its e-comm tools “arm the rebels.” This epic essay suggests it’s more of a small biz overlord than an ally. (Not Boring)

ICYMI

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

• DTC Brands Are Rewriting the Retail Partnership Playbook
• What Makes a Launch “Successful” in 2020?
• E-Comm Distribution Centers Could Come to a Mall Near You

NOW TRENDING ANSWER

Tie-dye, natch.