Retailers, take note: The latest round of tariff hikes is squeezing margins — especially in apparel and footwear. But here’s the good news: You don’t have to just absorb the hit.
At Brandivio, we believe in fast, data-backed actions that protect your bottom line today — not months from now. That’s why we’re sharing 3 powerful strategies you can start using right now to fight back against tariff pressure and defend your margins.
🕒 Time to Impact: 0–3 Months
📈 ROI Potential: High to Very High
Let’s dive in.
1. Markdown Optimization: Smart Discounts That Work for You
Markdowns often feel like a necessary evil. But when executed strategically, they’re a margin-recovery weapon.
What You Should Be Doing:
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Identify slow movers with high tariff costs — mark them down early, not after it’s too late.
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Use real-time sales data by region or channel to drive timing and depth of markdowns.
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Segment your markdown strategy by store type (flagship vs. outlet vs. online).
ROI-Boosting Tips:
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Leverage discount pricing models to test timing/depth of discounts.
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Track contribution margin — not just sell-through — to evaluate success.
Why It Works:
✅ Fast to implement
✅ Frees up working capital
✅ Reduces inventory carrying costs
💡 Retailers using smart markdown tools have seen up to 15% margin improvement vs. static markdown cycles.
2. Dynamic Pricing: Boost Margins Without Losing Customers
Tariffs are changing your costs — dynamic pricing lets you change your prices to match.
What You Should Be Doing:
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A/B test price lifts on high-demand, low-elasticity products.
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Apply geotargeted pricing based on market-specific demand and cost structure.
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Adjust pricing in real-time based on competitor data and margin thresholds.
ROI-Boosting Tips:
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Build automation rules around margin floors.
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Ensure price transparency across channels to maintain trust.
Why It Works:
✅ High margin impact with minimal risk
✅ Enables testing and learning at scale
✅ Responds to market shifts instantly
📊 Retailers using dynamic pricing have reported 3–7% margin lifts without volume loss.
3. SKU Productivity: Double Down on What Sells
Not every product deserves a place on your shelves — especially if tariffs are eating the margin.
What You Should Be Doing:
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Evaluate every SKU’s gross margin after tariffs.
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Cut low-productivity, high-tariff items.
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Refocus merchandising and buying on top performers.
ROI-Boosting Tips:
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Use tariff-adjusted scoring to rank SKUs by profitability.
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Track working capital tied up in low-margin items.
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Eliminate duplicates or items cannibalizing others.
Why It Works:
✅ Streamlines inventory
✅ Improves merchandising clarity
✅ Supports stronger allocation decisions
🔍 Optimizing SKUs can cut 10–20% of assortment cost while improving overall margin.
The Power of Combination
Here’s how to make these strategies sing:
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Start with Markdown Optimization — it’s your quickest win and cash generator.
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Apply Dynamic Pricing to adjust in real time based on costs, competition, and demand.
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Refine your SKU Productivity to create a leaner, more profitable assortment.
Final Takeaway: Margins Are Worth Fighting For
Tariffs aren’t going away. But with these fast-acting strategies, you can:
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Protect your profits now
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Improve your agility in a volatile market
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Set up your team for long-term success
💡 Want the full playbook?
Explore our Tariff Resiliency Matrix and Tariff Strategy ROI for deeper guidance on long-term margin protection.
Ready to take control of your pricing, assortment, and profitability?
Let’s talk. At Brandivio, we help retailers thrive — even in tough times.
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