How Tariffs are Impacting Retailers and What They Can Do About It
Between China, Canada, and Mexico, 2025 has felt like tariff whiplash. While there are immediate implications for retailers, our take is an optimistic one.
Retailers are no strangers to navigating economic uncertainty and global change. Few industries were hit harder by the pandemic, yet those who moved quickly to shift online saw some of their strongest years, with global ecommerce sales surging 19% in 2020 alone.
We believe the same technology that fueled growth then is precisely what retailers need to soften the tariff blow now. In fact, it may be the life raft that keeps them afloat as they navigate longer-term adjustments to their operations and supply chain.
We’ve compiled a set of actionable use cases to help retailers respond quickly and focus on what they can control: their marketing. These are the four essential strategies every retail marketer should have in place to protect their margins and their customers from the fallout:
1. Reorient campaigns around discount sensitivity
In certain sectors, price hikes may be inevitable, but not all customers will react the same way. Some buyers will be highly sensitive to these increases, while others won’t mind paying more to continue shopping with the brands they love. The good news? You already know who each of these buyers are.
By segmenting full-price buyers from promo-only buyers, brands can tailor their marketing strategies to ensure that full-price shoppers continue to buy while discount-seekers receive the offers they need now more than ever to stay engaged.
How Bluecore customers do it
Discount affinity personalization has long been a conversion multiplier for Bluecore customers. One athletics retailer in particular uses discount affinity as one of the foundations of their site and email personalization strategy.
This retailer optimizes their onsite experience with personalized modals that automatically adjust according to what each shopper is most likely to engage with based on their unique discount affinity. Serving experiences that match the right offers to the right customers at every level of price sensitivity has increased conversions by over 73% compared to non-affinity based campaigns.
2. Put real-time product data to work
With tariff-driven inventory constraints, retailers will need to become even more strategic about which products they recommend and promote. This is where retailers can put their real-time data to work, from prioritizing in-stock items that aren’t exposed to new tariffs, promoting high-margin products, and even adding a tariff score to each SKU to prioritize products with less tariff exposure. All of these strategies can protect retailer’s revenue while maintaining the personalization needed for a great customer experience.
How Bluecore customers do it
When the CITY Furniture team first started working with Bluecore, they had one core goal — maintain their promise of unmatched customer experiences and bring the showroom to digital life. They wanted to catch every detail of their diverse product catalog to personalize to each individual shopper, so they started by channeling a combination of shopper signals and product data in their emails.
“Bluecore was a great fit to take all of those site, email and catalog interaction points, and turn that into ammunition to drive revenue,” said Justin Roisman, Managing Director of Digital Marketing at CITY Furniture.
Leveraging real-time product data for recommendations helped CITY furniture to achieve a 30% increase in AOV and a 500% increase in conversion rate compared to non-personalized emails.
3. Shield your highest-value customers with targeted promotions
In an increasingly price-sensitive market, customer acquisition becomes a less-than-profitable race to the bottom. While growing the customer base will always be necessary, retailers need to protect and retain the relationships that power their true profit engine: their existing customers. Offering exclusive incentives such as personalized coupon codes or early access to promotions helps shield loyal shoppers from price increases and reinforces their commitment to the brand.
How Bluecore customers do it
Understanding that loyal customers are the best customers, Lulu and Georgia leveraged Bluecore’s discount affinity model in emails and onsite personalization modals to drive conversions among their loyalists while preserving their margins, offering discounts or free shipping only to the customers who needed them to convert.
Lulu and Georgia also created a rewards trigger, which sends shoppers 1:1 credit reminders — including the dollar amount of the available reward — along with relevant product recommendations. This contributed to a 27% increase in revenue per email.
These strategies keep Lulu & Georgia customers coming back, with a 299% increase in repeat buyers in only nine months.
4. Reduce costs with channel-preference targeting
Eyeing increased costs, every retailer will need to do more with less, which makes certain high-cost channels, like SMS, a clear target for optimization. While SMS might be the highest-converting channel for one customer, it could go completely ignored by another. To maximize efficiency, retailers should take a personalized approach to reduce spend on channels that are unlikely to convert while increasing investment where it matters most.
How Bluecore customers do it
One Bluecore customer, a leading apparel retailer, benefits from having email and SMS in one place by experimenting with AI-driven models, like Channel Preference. This retailer layers predictive models-including Channel Preference, High Likelihood to Convert, and Predicted High PCLV-to decide who to target on SMS.
Instead of sending a batch SMS to the entire list, they target smaller segments for specific product drops or test sending an abandoned cart reminder as a second touch. This tailored approach has led to a 15% lift in reactivated buyers year-to-date.
Don’t lose sight of quick wins in pursuit of long term resilience
With tariffs expected to increase costs by over $800 per U.S. household in 2025, consumers will quickly become more discerning with their wallets. While reworking manufacturing, production, and operations are all important steps to take lower costs in the long-term, these pivots will not happen overnight.
Leaning on the technology retailers already have in place can help them build tariff resilience in the short-term while preparing for the long-term. Simple strategies, from personalizing by discount affinity to prioritizing high margin products in recommendations, will protect revenue without compromising customer experience.
And in a world where prices may increase for everyone, customer experience will continue to be one of the most important differentiators for any brand.
