Despite their dominance in the news, tariffs are not new. Companies have seen them rise and fall across the globe in the past, always adjusting costs and margins in response. What is new, however, is today’s unprecedented rate of dynamic tariff movement—and the colossal tumult it is causing.
That means you need a dynamic pricing strategy to adapt to the uncertainty.
More from Sourcing Journal
-
Canada Cools US Trade Tensions By Drawing Down Retaliatory Duties
-
Walmart Says It Will Increase Prices on Some Goods Because of Tariffs
-
Why South Carolina's Textile Manufacturers Want to Talk To Scott Bessent
“When things are moving so fast and you don’t have a good, certain understanding of what’s happening, you need to be a little bit more responsive and agile,” said Ravi Rangan, chief technology officer of Centric Software, in the webinar Tariff Turbulence: Leveraging Technology and Pricing Elasticity to Thrive in 2025. “It’s a little bit like being caught in a fire in the theater. You don’t start analyzing what to do; you [just] run for the exit. But you want to be prepared.”
Market intelligence tools like Centric Market Intelligence are key to creating a macroeconomic context—providing information on external forces of the market, what’s happening, what’s trending, what are the competitive forces, not just in your category, but across the industry.
First step, noted Jade Huang, VP, strategy & market intelligence, Centric Software, is to set a pricing baseline. This entails examining and reaffirming your specific brand’s price positioning and strategy in relation to your competitors, as well as noting how competitive companies build out their respective pricing and assortment architecture, and what changes they might have made over time. How they managed significant disruptive events is especially pertinent.
Tracking the basic white T-shirt as an example across a variety of brands, Huang looked at pricing and assortment breadth to spotlight significant clusters and overall philosophy. She found, for example, that ASOS’ average price for a white T-shirt was $32.37, among 355 skus of shirts and tops. Gap, in contrast, focuses 52 percent of its white T-shirt assortment in the entry price point of $21 to $25, but with only 23 shirts and top skus (tighter, but still higher than Uniqlo’s highly rationalized nine). Meanwhile, H&M, with 71 shirts and top skus, focuses on mass appeal, with 44 percent of its white T-shirts priced between $6 to $10, with entry price point as little as under $5.
To understand the shift in prices and strategy over time, Huang then looked at price positioning from Q1 2020 to Q1 2025. This revealed that ASOS had diversified and spread out its risk by expanding white T-shirt price points across $16 to $35 today, instead of the strong $16 to $20 range focus from 2020, thus diversifying from a 41 percent single price point concentration.