SPENDING

Most likely to...

Trapper Keepers, erasable pens, marbled composition books—man, does that take us way, way, way back. 

All enjoyed the fun of being trendy back-to-school essentials. But that was then, and this is now: Laptops, tablets, and speakers are the modern-day must-haves. 

It’s electr(on)ic: The pandemic forced students to lean on tech last year, and even without Zoom School, that’s where a lot of back-to-school spending will go in 2021. 

• Spending on electronics is predicted to reach $12.9 billion this year, or $296 per household. That’s up from $274 per household in 2020, according to NRF.
• Spending on traditional back-to-school products is predicted to increase only 2%, compared to 37% on tech, per a July Deloitte survey.  

A new shift? Younger kids are getting smartphones, as opposed to just middle or high school students, Katherine Cullen, senior director of industry and consumer insights for the NRF’s research team, said during a July webinar. 

“This year we saw elementary school students are the most likely group to be receiving a smartphone. Maybe after a year at home, families want their younger kids to be able to stay in touch a bit more,” Cullen said. 

Location, location, location: Overall back-to-school spending is projected to surpass $37 billion this year, or $849 per household, a figure that has risen since 2007, when it was $18.4 billion ($563.49 per household), according to NRF. But where that shopping is taking place has evolved. 

• Parents of K-12 students plan on shopping at online retailers (49%) and dollar stores (41%) more than they did last year, per Deloitte. 
• 34% will use BOPIS and curbside pickup to facilitate their back-to-school shopping. 

“Last year in August, we saw notebook sales jumping almost 30% online,” Inna Kuznetsova, CEO of software firm 1010data, told Retail Brew. “Clearly, students haven’t started using 30% more notebooks. It just tells you more of the purchase shifted online.” 

Looking ahead: The uncertainty around the Delta variant may extend the back-to-school shopping season, but shouldn’t have an effect on overall spend, Katie Thomas, lead at the Kearney Consumer Institute, told us.  

“When I look at numbers around foot traffic, you're seeing an uptick for the first time in weeks, if not months, in terms of general avoidance of public places,” Thomas said. “It'll benefit the retailers who were able to make more longstanding changes...rather than just a Band-Aid trying to get through the pandemic.”—KM

M&A

Run for it

Adidas bought Reebok for $3.8 billion in 2006 to gain some muscle in the fight against Nike. Now, the German sportswear titan is going it alone.

It’s selling Reebok to Authentic Brands Group for ~$2.5 billion in a (mostly) cash deal.

“We’ve had our sights set on Reebok for many years, and we’re excited to finally bring this iconic brand into the fold,” Jamie Salter, founder and CEO of ABG, said in a statement.

• The licensing giant’s roster of 40+ brands includes Forever 21, Lucky Brand, and Brooks Brothers. The group filed to go public in July.

Dead weight: “Adidas is selling Reebok for far less than it paid for it which serves to underline the degree to which brand equity has been eroded,” Managing Director of GlobalData Neil Saunders said in a statement.

• Adidas restored Reebok’s profitability, he noted, but failed to build the brand into something distinct and meaningful to consumers—neither “the go-to brand for sporting professionals nor for those looking for athleisure fashion.” 

What’s next? ABG has gotten into the habit of rebuilding and restoring wounded brands. And so far, its track record looks good. Just ask Shaq, who owns shares of ABG. The longtime Reebok partner has been pushing for the sale.—JG

SPONSORED BY LEXER

Put The Holidays on Your Summer Reading List

The most wonderful time of the year is upon us. Well, not really. But if you don’t start prepping for the holidays soon, you won’t be doing the kind of business you should be doing when the sleigh bells start a-jingling.

To help you prep for what is traditionally the biggest promotional period of the year, the Lexer team threw together their nine top-performing holiday campaigns and wrapped them up in a neat little bow.

Lexer is the only CDP built specifically for retail brands, and they’ve helped drive sales growth for Quiksilver, Igloo, Supergoop!, and more. And when you open up this holiday campaign gift, you’ll find the secrets Lexer uses to propel big name brands to the top.

Learn how to craft a data-powered holiday campaign by downloading Lexer’s complete guide here.

RESALE

No second thoughts

This year, there’s been an avalanche of retailers getting into resale (Madewell, Harvey Nichols, Fabletics). The avalanche of clothes in our closets might be one reason why. 

Anotha one: H&M will introduce a resale site—H&M Rewear—to Canada next month. TBD if it’ll expand beyond the Great White North, but that’s a possibility if things go well, the company told Business of Fashion. 

You can already find plenty of H&M merch on platforms like Poshmark and ThredUp, but Rewear brings resale in-house (with the help of tech platform Reflaunt). 

With that, BoF noted, comes the opportunity to court new customers—and work toward the company’s sustainability goals, like sourcing everything from recycled or eco-friendly materials by 2030. 

• “What we’re not seeing in all of these announcements about circularity and resale is the work that actually needs to be done in the factories themselves that are producing these garments,” Maxine Bédat, founder of the New Standard Institute, told the publication. 

But, but, but: There’s more green on everyone’s mind. “It’s not just the right thing to do, it also makes money for the brand,” Pooja Sethi, ThredUp’s SVP and GM of resale-as-a-service, told Retail Brew during The Checkout last month.—KM 

WHAT ELSE IS BREWING…

• Job postings that require the Covid-19 vaccine have almost doubled over the past month. 
• Abercrombie & Fitch widens its reach with a Zappos partnership. 
• Hudson’s Bay will split its e-comm and in-store businesses. 
• Gopuff will acquire British startup competitor Dija to expand to Europe.
• Barneys' original department store is becoming a Spirit Halloween. 

SPONSORED BY DOTDIGITAL

Engagement: Whether marketing or marriage, it takes commitment. This dotdigital worksheet explains how to get down on one knee for your customers—i.e., polish up those marketing campaigns to optimize engagement and boost ROI. That means identifying key lifecycle stages, curating relevant content, triggering lifecycle automations, and never going to bed angry. Learn how to commit to engagement here. 

SWAPPING SKUS

Today’s top retail reads. 

Mountain Dew brew: A look into why PepsiCo believes a hard version of the soft drink is the right move. (Modern Retail)

Hard pill to swallow: Rite Aid acquired Bartell Drugs, a local Seattle drugstore chain, last October. Less than a year later, customers aren’t too happy. (The Seattle Times) 

The stopped game: Ryan Cohen became GameStop chairman mere months ago, but has quickly revamped one of the most talked-about retailers. (WSJ) 

ICYMI

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

• Startup Pure Culture Beauty on its first retail partnership 
• Etsy sellers eye a hot new accessory: vaccine card holders
• Plant-based bra cups land at Walmart

FRIEND OR FAUX?

Three of the retail stories below are real...and one is most definitely not. Can you spot the fake? 

1. An indie designer created a collection of Barilla pasta box-inspired purses.
2. Taco Bell is building a four-lane, two-story drive-thru.
3. Hershey is releasing a line of chocolate-flavored spiked seltzer.
4. A Supreme-wrapped subway train will travel through New York City this weekend.

Keep reading for the answer.

FRIEND OR FAUX? ANSWER

Hershey is sticking to Kisses, but we think we might be onto something.