Tariff Impact: Experts Stunned by Unlikely Economic Boost

Adapting to the New Reality

The Gamestanza team has been closely following the evolving landscape of tariffs and their impact on the global economy. Our latest research, in conjunction with the Collage survey findings, reveals a shift in consumer behavior as businesses navigate this uncertain terrain. With 76% of consumers expecting tariffs to impact prices, as per a Morning Consult survey for the National Retail Federation, Americans are already adjusting their shopping habits in anticipation of potential price increases.

The Collage survey illuminates these strategies:

• Switching to less expensive brands or product alternatives: 28% of consumers are opting for private labels and discount retailers like Aldi and Lidl, seeking value-driven options.
• Shopping at discount or bulk retailers more often: 24% are turning to Costco, Sam’s Club, BJ’s, WinCo, and similar stores for bulk savings and competitive pricing.
• Adjusting budgets to account for price increases: 24% are proactively modifying their budgets to accommodate anticipated price hikes, a skill honed over the past few years of economic volatility.
• Delaying major purchases: 23% are postponing significant expenditures like cars, electronics, and appliances, waiting for potential price fluctuations to stabilize.
• Stocking up before prices increase: 22% are strategically purchasing essential items in advance to avoid higher costs in the future.
• Buying second-hand goods: 16% are exploring pre-owned options to save money and reduce their reliance on new products.



The Emotional Impact

The uncertainty surrounding tariffs is not only impacting purchasing decisions but also generating emotional distress among consumers. Economic anxieties are high, and consumers are feeling the pressure of rising costs.

Collage’s Griffith aptly notes, “Tensions and resentment are high due to what many see as about to happen to the economy.” This sentiment is echoed by research findings, highlighting the potential for brand loyalty to be eroded when consumers perceive price gouging in the face of external economic pressures.



The Power of Value

In this climate of economic uncertainty, consumers are increasingly prioritizing value. They are seeking out deals, discounts, and products that offer the best bang for their buck. Discount retailers, like those mentioned above, are poised to benefit from this trend, as consumers become more price-sensitive.

Gamestanza advises businesses to respond to this shift by focusing on value-driven pricing strategies. Transparent pricing, highlighting cost-saving measures, and offering competitive value bundles can help build consumer trust and loyalty.



Strategic Navigating the Unpredictable

Mitigating the Risks

Navigating the complexities of tariffs requires a proactive and strategic approach. Businesses must anticipate potential disruptions, adapt their operations, and develop contingency plans. Gamestanza recommends the following steps:

• Diversify supply chains: Exploring alternative sourcing options can reduce reliance on single suppliers and mitigate the impact of tariffs on specific goods.
• Negotiate with suppliers: Open communication with suppliers can help explore potential cost-sharing arrangements, price adjustments, or alternative materials to minimize tariff-related expenses.
• Optimize inventory management: Careful inventory planning can help businesses minimize stockpiling of goods subject to tariffs and avoid potential losses.
• Explore government assistance programs: Staying informed about government initiatives and support programs designed to help businesses navigate tariff impacts can provide valuable resources and financial relief.



Pricing Strategies

Transparent pricing and clear communication are crucial in navigating the complex world of tariffs. Gamestanza advises:

• Clearly communicate price adjustments: Explain to customers the reasons behind any price changes, emphasizing the impact of tariffs and outlining efforts to minimize cost increases.
• Offer value-based pricing: Highlight the value proposition of products and services, emphasizing quality, durability, and long-term benefits to justify any price adjustments.
• Consider tiered pricing: Offer different pricing options based on product features, quantities, or subscription models to cater to diverse customer needs and budgets.
• Explore subscription models: Subscription-based services can provide a more predictable revenue stream and help mitigate the impact of fluctuating prices.

Building Resilience



Building a resilient business requires proactive planning and adaptability. Gamestanza suggests the following strategies:

• Diversify product offerings: Expanding product lines and exploring new market segments can reduce reliance on any single product or market vulnerable to tariff impacts.
• Invest in technology: Embracing automation, data analytics, and other technologies can improve operational efficiency, reduce costs, and enhance responsiveness to changing market conditions.
• Strengthen customer relationships: Building strong relationships with customers based on trust, transparency, and open communication can foster loyalty and support during challenging times.
• Develop a culture of innovation: Encouraging creativity, adaptability, and continuous improvement can help businesses navigate disruptions and seize new opportunities.