Ready your business and marketing for potentially increased costs and shifting shopping habits. 

In my role as Senior Director leading Attentive’s Voice of the Market, I’m constantly reviewing the latest market trends. This involves staying on top of recent news and listening to our customers’ concerns and interests. One concern that’s lately been top of mind for retailers working with Attentive is the ongoing discussions around the implementation of tariffs on imports into the US. 

While this is a fluid situation, I wanted to share what we know today and what we’ve learned from our customers who are getting ahead of these potential changes. 

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What we know: Talks of tariffs

In the US, there are talks of a proposed 10% tariff on Chinese-made products and a 25% tariff on imports from Canada and Mexico (and potentially other markets), which could significantly impact retailers. Higher tariffs would likely bump up the cost of goods, squeezing profit margins and potentially leading to higher prices for consumers.

Retailers relying on imports from China, Canada, and Mexico could face supply chain challenges and may need to seek alternative sourcing and logistics solutions.

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What retailers can do to mitigate the impact of the proposed tariffs

If these tariffs go into effect, we can anticipate a shift in how consumers shop. Almost one-third of US consumers would prioritize spending on essential items if tariffs increased the price of products. So, what does that mean for you? Here are some proactive strategies that can help you prepare now.

Refine your shopper segmentation

Targeting the right segment is one of the most important factors in driving conversions— especially when it comes to your price-aware customers. These shoppers don’t always act on the first marketing touch, so it’s smart to be strategic. It’s all about understanding their needs and preferences, and making sure your message really resonates with them.

Refine your segmentation strategy to offset these proposed tariffs by: 

• Using Attentive AI™ Pro to identify your budget or value-conscious shoppers
• Creating a “price conscious” segment that includes subscribers who only purchase during sales and/or with a discount or promotion 
• Matching product recommendations to users based on previously purchased price points
• Highlighting non-price-reduction incentives, such as free shipping or priority delivery at no additional cost

Lean into transparent communication

​​When it comes to communicating any price increases to your shoppers, transparency and empathy are crucial. 

Start by explaining the reasons behind the price changes in a clear and straightforward manner. For example, you might mention rising costs in the supply chain, tariffs, or other external factors that are beyond your control. Be honest about how these changes will affect the prices of specific products. It's also important to show any steps you're taking to reduce the impact, like finding cost-effective suppliers or offering discounts on other items. Finally, make sure to remind your consumers of the value they get from your product or services, and how that'll continue to be the case. 

By keeping your customers informed and showing that you value their understanding, you can maintain their trust and loyalty, even in challenging times.

Plan ahead with forward stocking

Give your business some time to evaluate other options by increasing your inventory of key products (or forward stocking) before these tariffs could take effect. By loading up on inventory before tariffs kick in, you can avoid the higher costs and keep your prices stable for a while. This helps you maintain your profit margins and keep your customers happy with consistent pricing. 

Diversify sourcing

A long-term strategy to offset cost increases is to explore alternative suppliers in countries not affected by the proposed tariffs. Instead of relying on a single supplier or country, spreading your supply chain across multiple regions can help mitigate the financial impact of tariffs. This way, if one country imposes higher tariffs, you have other options to fall back on. 

By building a more flexible and resilient supply chain, you can better navigate the unpredictable landscape of international trade.

Manage costs

When tariffs hike up your expenses, simply passing those costs on to customers might not always be the best move—especially if it risks losing them to competitors. Consider renegotiating supplier contracts or optimizing operational efficiencies to offset increased costs. It may come down to adjusting pricing, which is where clear communication with your customers comes into play to address these changes. 

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We’re going to continue watching how these policies evolve, and update this post with any new recommendations. If you’re an Attentive customer and want to discuss some of these strategies in more detail, reach out to your CSM.