Tariffs Are Rising — But Your Margins Don’t Have to Shrink

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:

• Identify slow movers with high tariff costs — mark them down early, not after it’s too late.

• Use real-time sales data by region or channel to drive timing and depth of markdowns.

• Segment your markdown strategy by store type (flagship vs. outlet vs. online).

ROI-Boosting Tips:

• Leverage discount pricing models to test timing/depth of discounts.

• 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:

• A/B test price lifts on high-demand, low-elasticity products.

• Apply geotargeted pricing based on market-specific demand and cost structure.

• Adjust pricing in real-time based on competitor data and margin thresholds.

ROI-Boosting Tips:

• Build automation rules around margin floors.

• 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:

• Evaluate every SKU’s gross margin after tariffs.

• Cut low-productivity, high-tariff items.

• Refocus merchandising and buying on top performers.

ROI-Boosting Tips:

• Use tariff-adjusted scoring to rank SKUs by profitability.

• Track working capital tied up in low-margin items.

• 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:

1. Start with Markdown Optimization — it’s your quickest win and cash generator.

2. Apply Dynamic Pricing to adjust in real time based on costs, competition, and demand.

3. 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:

• Protect your profits now

• Improve your agility in a volatile market

• 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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