Brands are being squeezed like never before. On one hand, federal trade policy is causing the price of just about everything to go up, thanks to tariffs and the resulting second-order effects. On the other hand, brands are under pressure to maintain steady prices on platforms like Amazon and Walmart. Then there are the consumers who are feeling spooked from all the uncertainty this creates.
All told, it’s safe to say most retail brands are feeling the effects of this whiplash. But not everyone is suffering equally. Some brands are finding ways to protect profits while maintaining consumer trust, all without angering major platforms and retailers. While there is no single, simple trick, there are some strategic takeaways that can help brands make better decisions in a volatile market.
Prioritize Predictability over Promo Codes
One of the simplest and most impactful things retail brands should immediately do to protect their bottom lines is slow down on discounting and promotions. In fact, our data shows that best-in-class brands have already been doing this since late Q1, when talk of tariffs first arose.
Intuitively, deprioritizing promotions and discounts while prices are rising doesn’t make sense. When prices go up, the natural instinct is to immediately reach into the promotions budget to avoid scaring away customers. However, aggressive discounting can squeeze margins, and because brands have a limited promotional budget available, they often exhaust this budget too quickly. It’s a short-term bandage that doesn’t stop the bleeding; it just hides it for a bit.
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The reality is that costs are likely to continue to rise, and retail platforms will continue to put pressure on sellers to keep price increases to a minimum. Stopping discounting now, or at least significantly reducing the size and number of discounts available, allows brands to preserve their margins and maintain a healthy P&L now — so if things get worse later, they’ll be in a better position to absorb the shock.
Alternatively, some brands are using the savings from pausing discounts to offset some portion of their cost increases, creating more stability in consumer pricing and building trust with shoppers. From a consumer perspective, getting a discount might be an immediate win, but it’s even better to know that a roll of paper towels will cost the same a week from now as it does today. Reallocating the discount/promo budget toward price stability makes brands stand out when everyone else is increasing prices and leveraging more discounts.
Optimize Operations to Offset Rising Costs
Every business wants to operate as close to full efficiency as possible at all times. The reality typically falls far short of that goal: during good times, efficiency gets deprioritized for growth, and during bad times, it tends to look more like panic than a methodical, point-by-point practice. For example, it might be easier to arbitrarily lay off 10% of a workforce than to find 10% in savings across every operational motion, but there are only so many employees a company can cut before the entire team is three people trying to do the jobs of 100.
The traditional move during uncertain times was to parking-lot every other initiative and lock senior management in a room with the books until they found every fraction of a percent of efficiency they could. Are there software or services that can be replaced for less or cut entirely? Can packing or shipping lines save a few seconds per parcel by changing the layout or adding a new piece of equipment that has a relatively short ROI?
Now, with agentic AI technologies, brands can move faster and with greater precision rather than relying on leadership to perform manual audits and make gut decisions. AI agents can monitor operations, identify inefficiencies and even act autonomously to make improvements.
Doubling down on operations pays off twice: first by offsetting price hikes with new savings now, but also later by positioning the business for greater profitability once the economy settles.
Lead with Transparency, Keep Customer Loyalty
Traditionally, many of the brands we’ve worked with and observed have been hesitant to discuss pricing or share their strategies with customers, at least outside of the context of discounts and sales. Those days are over, and oversharing is the new best practice for successful sellers.
Consumers know that big things are happening in global trade — they see news reports, get social media updates and hear about every tariff and retaliation in conversations. So when a seller doesn’t address how tariffs are affecting pricing head-on, it becomes a source of potential anxiety, just like any “elephant in the room” situation. Anxiety reduces shopping, breaks consumer trust and erodes brand equity.
The answer, as smart brands have figured out, is to become part therapist, part analyst, part consultant and part oversharer. Here’s what that means:
- Reassure consumers that things will be OK while acknowledging that their feelings and worries are real and valid.
- Contextualize what’s happening in a way that makes complicated policy simple and easy to relate to.
- Provide insight and forecasting as an expert to help them plan their purchasing decisions.
- Give more information rather than less, and be honest and transparent to a fault.
In practice, this looks like providing early warnings about price changes as soon as possible, and being detailed and thorough in explaining what’s changing and why.
If a new policy is going to increase raw materials cost by 10%, but the company can absorb the cost, communicate that with a short update: “We’re expecting the cost of our raw materials to go up by 10%, but we’re going to try to avoid increasing prices as long as possible.” If prices have to go up, then that’s even more important to share, with as much detail as possible to explain why. Open, transparent, and timely communication will gain customers’ trust, and that will make them less likely to flee if costs go up and more likely to become loyal, long-term customers.
Navigating the Unknown
The thing about market uncertainty is that no one knows what’s coming next or when the uncertainty will be over. The current chaos is likely to persist for a bit longer and cause significant disruption for both sellers and consumers.
Sellers may not have the power to change that, but they do have the power to decide how they want to respond, and the power to build or hurt the level of trust their customers extend to them. Following the examples outlined here will help brands do a lot more building than hurting until tariff-driven pressure eases and international trade stabilizes.
Sai Koppala is Chief Marketing Officer at CommerceIQ, bringing over 20 years of marketing and strategy experience. Before CommerceIQ, he was Chief Marketing and Strategy Officer at SheerID and held leadership roles at Apigee (acquired by Google) and SAP. He holds an MBA from the Kellogg School of Management and a Master’s in Electrical Engineering from Arizona State University.
