ASK THE EXPERT: STEVE PRUITT ON WHAT TO EXPECT FROM TARIFFS

Q: I sell luxury goods, and customers so far have accepted the higher prices from European vendors, but now I am hearing about new tariffs that could come next year. I’ve already bought most of my inventory for Spring ’25, but what advice do you have for Fall ’25?

A: While we still don’t know what tariffs, if any, will be placed on Europe or other countries that we source from, it’s good that you are thinking ahead.

Even if Europe doesn’t face new tariffs, consumers are likely to be paying more for everything else if widespread tariffs are put into place. In fact, the National Retail Federation estimates that tariffs could cost consumers an extra $78 billion annually.

If we start to see some price pushback, you might consider opening a slightly lower price point, if you do not already offer it. So, if you have jackets in the $800 to $1200 range and the $2000 to $3500 range, consider opening a $500 -$700 offering.

The rich always seem to get richer, so we don’t want to eliminate the higher-end offerings, but we may want to consider if we’re missing customers in other price points.

Another question we should really be thinking about is: “What compelling stories and products do we have that will make our customers willing to pay a bit more?” The good news is that great merchants ask this question every year and usually rise to the challenge.

Yes, prices may be higher, but we can give customers more options to buy, and compelling stories that get them to the register.

Image, at top, generated by ChatGPT.

Steve Pruitt is founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Email: steve@blksretail.com.