Navigating the tariff storm: Retailers, don’t guess, act now

The long-anticipated tariff escalations have begun, introducing significant challenges for retailers across all categories — from groceries and packaged foods to fashion, beauty, home goods, and electronics. This is no longer just about China; Canada, Mexico, India, Europe, and Asia are in the mix, and tariff levels and duration are a guessing game. Your business is exposed, and the clock is ticking.

You must confront tough questions head-on:

• What’s our real tariff exposure? Are we accounting for direct imports, wholesalers, distributors, and branded goods?
• How can we effectively mitigate impact through duty engineering, product design, or alternative sourcing?
• Will our customers stomach price hikes, or will demand tank?
• Will suppliers transfer their tariff burdens to us, and how do we push back against that?
• Can we strategically rethink our assortment, cut low-value SKUs, and better align with customer needs?
• How do we demonstrate control of the situation to investors and analysts? 

The stakes are sky-high, but you can take decisive action now to survive and even thrive: 

1. Assess your true exposure: Map every tariff impact now to understand your exposure.
2. Secure alternatives: Identify new sources, smarter designs, and duty workarounds.
3. Negotiate with strength and data: Ensure suppliers cannot impose their costs on you. Stand your ground.
4. Protect your margins: Pinpoint where price hikes won’t alienate customers.
5. Forecast ruthlessly: Model every scenario to avoid surprises.

AlixPartners has the capabilities and platforms to safeguard your bottom line:

• Tariff Exposure Analyzer: Our AI-powered engine reveals your total tariff exposure in 30 days—using our proprietary HTS code database and should-cost libraries covering 10,000+ items. Whether local or imported, our platform covers all scenarios.
• Global Trade Optimizer: Since 2017, GTO has delivered product and duty engineering, origin analysis, and strategic sourcing - built on our comprehensive database.
• Merchant Workbench: Used by over twenty-five retailers, this platform drives category strategies and profits. Using data and simulations in vendor negotiations, optimize assortment, pricing, promotions, and markdowns now, when it matters most.

Don’t wait for the next tariff wave to drown you. Contact your AlixPartners’ team or the authors of this column today. Act now—your margins depend on it.