Hypebeasts, listen up: Lids just dropped a new website, just for drops.

The hat retailer will start with one exclusive drop per week, and expects to work its way up to two a week, Lids’ president, Britten Maughan, told Retail Brew.

• It’ll release 40+ products (ranging from $45–$50) online over the next few months.

“We couldn’t drop enough hats to appease the collectors with a brick-and-mortar model,” Maughan said. “If you drop tons of different fashion hats every week, over time you’re going to be left with the smallest sizes, largest sizes, and your store’s going to get muddy real quick. And so we needed an answer for that.”

Hat trick: Finding that answer began all the way back in October 2020, when Lids decided to try the strategy.

“It was obvious that we had lost touch with the headwear collector. We had really gotten to be a lot of core styles in store that were safe and appealed to the masses, which is obviously where the bulk of the dollars are,” Maughan explained. “It’s not a bad thing, and I think we’re capturing a lot more business that way than we previously had, but it came at the expense of the headwear collector who buys hundreds of hats a year.”

As a store-first retailer, that’s where Lids went first: In March 2021, the retailer rolled out one of its initial major drops, a series of custom-made, fitted hats, with a goal of dropping one major release a month. Things quickly took off.

• Lids’ undervisor release last summer, for example, sold out across all of its ~1,100 stores, noted Lawrence Berger, partner and co-founder of Lids’ parent company Ames Watson.

Amid the success, the company was figuring out how to duplicate it online—from collabs, designs (that alone took a year), frequency, and building the website itself, Berger told Retail Brew.

“Lids went from hardly any exclusive product to now, over a quarter of the product in the store is essentially exclusive to us in some way,” Berger said. “This is a way for us to do stuff in a really timely fashion online and engage [customers] on a weekly basis. That’s obviously easier to do online than it is in brick-and-mortar stores.”

The big picture: Success—as with most drops—isn’t just about sales. That’s top of mind for Lids. “It’s far less about revenue, and it’s much more about brand engagement with the customer base,” Maughan said. “We want the customer to be following us on Instagram and email, salivating for the next drop.”—KM

Inflation may be on the rise, but so is consumer spending. US retail sales jumped 3.8% in January, per the Commerce Department yesterday.

• And compared to 2021, the figures were up 13% YoY.

But, but, but: Ted Rossman, senior industry analyst at Bankrate.com, suggests to take that number with a grain of (pricier?) salt.

“While the 13% year-over-year gain is respectable, it’s actually the lowest year-over-year increase in 11 months,” he wrote in an email. “Looking through that lens, January 2022 sales weren’t as good as they initially appear, and December 2021 sales weren’t as bad.”

By the way: What is looking good? Walmart. The retail giant reported Q4 earnings today that topped estimates—total revenue hit $152.87 billion and net income was $3.56 billion—and offered a peek into how shoppers are reacting to inflation.

“We know that consumers are focused on inflation, and we’re continuing to watch key item pricing to ensure that we help them through this,” Walmart EVP and CFO Brett Biggs told CNBC. “This type of environment plays to our strengths.”—JS

Until this week, Saks had been pulling an elder millennial and refusing to learn the dances for TikTok. But now, it’s whipping out the old iPhone and downloading the app. Saks debuted its @saks account and announced its first content series on the app on Tuesday.

For the channel, Saks will be enlisting influencers, celebs, and fashion insiders to promote its wares. Its first videos show creators embracing popular TikTok trends—like the shoe flip transition challenge and #GRWM (“get ready with me”)—to model loungewear, eveningwear, and cosmetics.

Kids these days: It doesn’t matter if you’re a fast-casual chain like Chipotle or a luxury fashion house like Gucci, if you want to reach younger consumers, you’re on TikTok.

• According to a 2021 Adweek-Morning Consult survey, 15% of all adults and 36% of Gen Z have made purchases based on the app.

“Gen Z is looking for inspiration. Focusing on product, product, product is not going to be enough. And if you want to go after this generation, you absolutely have to be [on TikTok],” Hana Ben-Shabat, founder of research firm Gen Z Planet, previously told Retail Brew.

Trending: In other online moves, Saks recently introduced an online Wellness Shop and expanded its livestream virtual-events platform over the holiday season. TikTok, it appears, is its next e-frontier.—JG

Today’s top retail reads.

Egging on: Egg brands like Vital Farms and Consider Pastures are emphasizing messaging with design to indicate their products’ premium quality, elevating the old-fashioned plain styrofoam to “opulent” cartons. (Fast Company)

Runaway: An interactive look at how the shift away from Western brands in Chinese consumers’ spending has unseated the likes of Nike and Adidas as the country’s top-selling sneaker companies. (Bloomberg)

Street cred: With childrenswear sales outpacing adult apparel, retailers are targeting millennial parents with kid-sized streetwear styles. “Whether it’s Yeezy or The Hundreds or Fear of God, the creators themselves are reaching that middle age where they’re thinking about what their kids want to wear,” StockX senior economist Jesse Einhorn said. (Modern Retail)

The big number that you need to know.

For many regions, Covid numbers in the US these days look encouraging: As of February 16, the daily average for new reported cases nationally was down 68% from the two weeks before, while Covid-related hospitalizations over that same period were down 39% and deaths down 13%.

But if you’re in the business of making masks and other Covid-related safety equipment, those numbers look a bit more…complicated.

• 3M reported on Monday that, as Covid cases decreased, it expected mask sales to slip—unlike their snug-fitting N95 masks—causing the company to project that its overall organic growth will fall by ~2% this year.
• Sales of N95 and other masks for 3M hit the glasses-fogging total of $1.5 billion in 2021, slightly up from 2020 ($1.4 billion) and way up from pre-maskne 2019 ($600 million).

Every breath you take: Honeywell is also adjusting to the fact that you’re less inclined to breathe heavily on their offerings, blaming diminishing sales of masks and other Covid-related products for a 3% drop in revenue in the last quarter of 2021.

Altered states: Another surge (or variant) could be around the corner, of course, but in the meantime, one thing likely to keep mask demand lower is the pace at which governors are lifting statewide mandates. Those mask requirements are now in only five states, plus in Washington, DC, and Puerto Rico.—AAN

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

• Cannabis bev maker Cann drinks in $27 million in funding
• What’s “metail”? Joel Bines will explain
• A reading list of how the pandemic has impacted the retail workforce