Navigating tariffs: How to build a resilient fashion retail strategy

In light of U.S. President Donald Trump’s announcement of new tariffs targeting major trade partners triggering market turmoil and sending shockwaves across industries, fashion giants like Nike, LVMH, Burberry, and Tapestry saw sharp stock declines following the announcement, underscoring the reliance on U.S. consumer spending and globally sourced materials. With the U.S. importing a large share of its apparel and footwear components, and leading suppliers targeted by some of the biggest tariff rates, these changes are set to increase production costs, push up prices, and exacerbate inflationary pressure.
 
On April 9th, President Trump announced a 90-day suspension on tariffs, imposing a temporary 10% duty on all countries except China, which remains at 125%. While the move gave markets a short-term boost, the broader economic outlook remains uncertain, reinforcing that volatility is the new normal, regardless of the final outcome of the Trump administration’s tariff policy.
 
In this article we’ll explore the critical factors fashion brands must monitor today to protect profitability, strengthen strategic responses, and proactively minimize risk, ensuring you are prepared to navigate economic uncertainty brought on by tariffs and their volatile status, along with rapidly evolving consumer behavior.

Brands are bracing for impact, raising the question of how they can navigate rapid economic shifts and gain a better view of the market’s evolution, and its impact on prices. Furthermore, brands are faced with the decision of allocating these increases in costs, by taking on the cost themselves, or passing them on to consumers. Industry experts are indicating that it seems inevitable that prices across the industry will rise and ultimately fall on shoppers.

With consumer willingness to spend already being identified one of this year’s biggest challenges within the fashion industry as stated by Business of Fashion shoppers are likely to become even more cautious, trading down to cheaper alternatives. Fashion retailers must act fast, becoming increasingly aware of market dynamics and using competitor insights to adapt collections, pricing, and promotional strategies with precision.

Embracing Volatility with Real-Time Monitoring and Targeted Price Increases

To stay ahead, fashion retailers need real-time visibility into competitor pricing, assortments, sourcing, and discounting strategies. Are others absorbing costs or passing them on, and if so, how much and on which products? With rising production costs, brands must adapt pricing precisely to minimize margin loss and avoid alienating consumers. You can track competitor and market price levels to evaluate where your pricing structure stands next to competitors and next to the market average, in turn guiding smarter adjustments. 

Using real-time stock and price evolution data, brands can easily identify bestselling products that yield strong margins. This helps you optimize sell-through by reacting quickly in strategically increasing prices on high-demand categories and products, avoiding broad price hikes that may result in excess stock and weakened profitability. In a volatile market, real-time pricing data allows you to align more precisely with demand signals and will be the key to protecting your bottom line. 

Strategic Discounting and Inventory Management 

As brands face growing pressure on margins and diminished consumer confidence, poorly planned or non-data-driven discounting decisions can quickly erode profits. It is therefore critical to ensure every markdown is strategic. By closely tracking competitors’ discount depth and timing, brands can fine-tune their own promotional calendars, avoiding unnecessary markdowns and optimizing discount timing. 

Alongside this, monitoring stock levels gives you quick visibility into trend fatigue and slow-moving products, enabling your brand to confidently discount underperforming items. This in turn allows you to reallocate assortments faster and pull back on low-performing categories without compromising on your margins. With a real-time view of both competitor actions and your own stock performance, you can easily distinguish between categories where price increases are possible and consumers will respond well to, and those that require markdowns. This will ultimately help you manage inventory more effectively and minimize profit loss. 

Spotting Market Trends Early 

Another strategic response to today’s volatility starts with agile assortment planning, staying ahead of market trends and their fast-paced shift. Tariffs are likely to spark a wave of assortment rebalancing, clearing out inventory and pushing brands to prioritize what truly drives value. 

Tracking market trends allows brands to see how top-performing products compare to those of competitors and identify where your brand stands on trending, high-demand items. Real-time insights on assortment movements can show you which products to prioritize, facilitating faster time-to-market. By spotting market gaps, emerging trends and shifting demand in real-time, you can seize assortment opportunities and adjust your product mix confidently, ensuring that you minimize carrying underperforming stock. 

Expanding International Market Presence

To navigate the uncertainty brought on by tariffs, brands must localize their retail strategies to reflect the difference in dynamics of each market. Consumer price sensitivity and willingness to spend vary widely by region, and with the US currently seeing its lowest consumer confidence levels since the pandemic, brands heavily reliant on US sales or sourcing from high-tariff countries are likely to be more heavily impacted by tariffs. 

A one-size-fits-all approach to pricing no longer works in a fragmented global market. Instead, brands should leverage real-time regional benchmarks to fine-tune local pricing and strengthen positioning across markets. AI-powered market intelligence solutions like Retviews can also guide assortment spread decisions, ensuring category relevance in each region. By ensuring that both pricing and assortment are aligned with market conditions and regional demand, your brand remains competitive, is able to protect margins, and cushion the impact of global volatility caused by today’s high tariffs. 

Price Sensitivity and its Impact on Consumer Confidence

Fashion brands are facing heightened uncertainty following the announcement of new tariffs, with luxury players, among other brands, seeing shares drop as market volatility intensifies. Already having entered a slowdown in 2024 after years of sharp price increases, luxury is becoming vulnerable. Post-pandemic, the US became a critical growth engine for luxury as China’s sales weakened. With economic instability and tariffs, the question is if this momentum can last?

The aspirational shopper, a driver of luxury growth in entry-level goods, already having weakened purchasing power, is the most likely to pull back as tariffs drive prices even higher. Business of Fashion states that between 2019 and 2023, aspirational consumers alone accounted for 10-15% of luxury growth, where high and ultra-high spenders who drove 40-50%. Luxury players will be affected differently based on their reliance on the US market and those depending on aspirational shoppers will need to rethink their retail strategies to stay competitive. 

Investing in aspirational shoppers remains crucial. With their purchasing power under pressure, brands must adjust pricing to protect margins while still keeping them engaged. You can use real-time data to track how competitors are pricing their assortment, spotting where increases are possible and understanding how brands are catering to the consumer segment through value-driven pieces that do not price them out of the brand. 

Although ultra-high and high spenders are likely to remain resilient despite rising prices, they require increased differentiation and elevated experiences. Real-time data allows you to assess where your brand stands in terms of price elasticity and identify gaps where you could offer more exclusive products and capture high spender demand, where consumers are less price sensitive, but seek out a highly exclusive product mix. 

Real-time data also allows brands to stay alert to market changes and new product drops as tariffs reshape pricing strategies. In an uncertain market, data-driven agility remains key in staying competitive across every consumer segment and staying ahead of any prices that change as a result of newly imposed import tariffs. 

As market uncertainty deepens and Trump’s import tariffs loom over the fashion industry, brands are under pressure to remain resilient and safeguard profitability. In this high-risk environment, real-time, AI-powered market intelligence is no longer an add-on, it has become a necessity. Real-time data powered by AI market intelligence is one of the core ways brands today can mitigate risks. To stay ahead of economic uncertainty, brands need to become hyper-aware of how competitors are adjusting pricing and positioning themselves, using this data to better steer retail strategies. 

Access to a market intelligence solution like Retviews empowers fashion brands with the clarity and confidence needed to thrive in turbulent economic times. Whether you're looking to optimize your pricing strategies locally or cross regions, stay ahead of top-moving products, or fine-tune your assortment spread with data-backed insights, Retviews helps you move with confidence, not guesswork. Ready to see how? Book a session with one of our fashion experts to explore how Retviews can help your brand navigate market changes in times of uncertainty.