With inflation, tariffs, and economic uncertainty putting pressure on both consumers and businesses, retailers are facing a perfect storm. Costs are rising, supply chains are strained, and shoppers are cutting back. But despite the gloom, opportunities still exist—if you know where to look.
Based on insights from How retailers can grow sales during a recession, this episode breaks down five smart, actionable strategies retailers are using to navigate the downturn. From smarter supply chains and strategic discounting to loyalty-driving experiences and hyper-targeted advertising, we explore what it really takes to win over customers in an era of tightened wallets.
What You’ll Learn in This Episode:
A) The Economic Reality Facing Retailers
- 72% of U.S. companies report rising costs from tariffs
- 8 in 10 shoppers are actively changing spending habits
- Consumer sentiment is declining, with growing fears of recession
B) How Consumer Behavior Is Changing
- Increased focus on affordability and essential purchases
- Shift toward cheaper brands, fewer purchases, and delayed spending
- Higher credit and buy-now-pay-later usage, especially among those living paycheck to paycheck
- Surprising loyalty to American-made goods—even among budget-conscious consumers
C) The 5 Strategic Responses from Retailers
1. Boost Supply Chain Resilience
- Improve inventory visibility and reduce dependence on fragile overseas networks
- Explore re-shoring, near-shoring, and friend-shoring strategies
2. Double Down on Customer Experience (CX)
- Use frictionless experiences to build loyalty when product differentiation and pricing are squeezed
- 59% of consumers say CX is a key driver of brand loyalty
3. Use Strategic Discounts
- Don’t discount everything—be targeted
- Use bundles, shipping thresholds, and margin-smart markdowns to increase order value
4. Invest in Targeted Advertising
- Focus efforts on high-value customers who are still spending
- Segment messaging to appeal to differing financial realities
5. Shift From “Want” to “Need”
- Make products feel essential or emotionally irreplaceable
- Offer quality and uniqueness to justify purchases during leaner times
Key Takeaways:
- Retailers face a dual challenge: higher operational costs and more cautious customers
- Consumers are making an average of five adjustments to their spending behavior
- Strategic adaptation is key: optimized supply chains, smart discounting, and personalized CX are critical levers
- Targeting the right customer segments and delivering perceived “value” is more important than ever
- Brands that feel essential—either emotionally or functionally—are better positioned to thrive
Subscribe to our podcast for expert insights on retail strategy, economic resilience, and shopper trends. Visit The Future of Commerce for in-depth research and guidance. Share this episode with retail leaders, marketing teams, and anyone preparing for what’s next in the economy.
