Retailers in the US are rethinking their supply chain and business strategies amid rising pressure from tariffs, according to data from e-commerce protection provider Signifyd.
Over three-quarters of respondents (76%) increased their prices to mitigate the financial impact of tariffs as they deal with the headwinds from new trading policies.
This aligns with the current landscape of the retail market; for example, Nike announced that it would be raising its prices to offset the cost of tariffs.
Mike Cassidy, head of storytelling at Signyfyd, said: “It isn’t surprising that retailers are taking dramatic action in the face of some pretty dramatic tariffs that have been implemented and proposed.
“What surprised me was the big number of retailers that are significantly adjusting critical operations and strategies this early in the game.”
According to data from the survey, over half (51%) of e-commerce retailers are passing down the additional costs from the newly instated tariffs.
The respondents have adjusted to mounting pressure from tariffs by downsizing, reducing their store fleet, shifting production from the country, and restructuring their inventory.
Recently major retailers, including Walmart and the parent company of J.C. Penney, Catalyst Brands, have laid off part of their workforce in an effort to mitigate tariffs.
Supply chains are changing as a result of tariffs, with over two-thirds (71%) of retailers choosing suppliers from countries with lower tariffs.
Retailers are also choosing US-made goods to mitigate the impact of tariffs, with over seven in ten (72%) replacing inventory subject to tariffs for US-sourced inventory and 71% limiting inventory for sale that is subject to tariffs.
Additionally, to maintain profit margins amid the financial pressures, three-quarters (75%) of e-commerce professionals are decreasing the number and size of promotions and discounts.
Meanwhile, a recent survey revealed that executives are experiencing temporary relief and cautious optimism as a new proposal of tariffs being capped at 10% was announced.
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