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How Canadian retailers can thrive amidst tariffs: A 12-month roadmap

The recent tariff announcements by both the U.S. and Canadian governments are set to disrupt supply chains, increase costs, and challenge retailers. Retailers must act swiftly to not only survive but also prosper in this evolving economic landscape. These key strategies will walk retailers through the next 1, 3, 6, and 12 months to stay competitive and drive growth.

1. Assess the impact of tariffs on costs

Conducting a pricing impact assessment will help determine whether price adjustments are necessary and how they might influence customer demand.  

2. Optimize supply chains

Explore alternative suppliers, including domestic manufacturers or tariff-free regions, to reduce dependency on affected imports. Strengthening relationships with vendors and negotiating better terms can help keep costs at bay.  

3. Manage inventory strategically

If possible, consider stockpiling high-demand products before tariffs take full effect. Just make sure to avoid excess inventory that could lead to markdowns later.  

4. Communicate pricing changes transparently

If price adjustments are necessary, be upfront with customers. Providing clear explanations about changes while emphasizing product value and quality can help maintain customer trust.  

5. Listen to the voice of the customer

Customer expectations and purchasing behaviors will shift in response to tariff-driven price changes. Retailers should actively solicit their feedback through surveys, online reviews, and direct interactions to understand their concerns. Then, they can take those insights and make data-driven decisions on pricing, promotions, and product offerings.  

Mid-term adaptation (next 3-6 months)

6. Reshoring and nearshoring

Bringing production closer to key markets reduces tariff exposure and enhances supply chain resilience. While this transition requires upfront investment, it improves lead times, operational control, and long-term cost efficiency.  

7. Improve operational efficiency

Invest in AI-driven demand forecasting, automation, and process improvements to cut operational costs. Streamlining logistics and warehouse management can also enhance efficiency.  

8. Strengthen loyalty programs

As customers become choosier about where and how they spend, repeat business is more important than ever. Enhance loyalty initiatives with exclusive discounts, rewards, and value-added perks to help offset potential customer attrition due to price increases.  

9. Leverage BOPIS & omnichannel strategies

Encourage Buy Online, Pickup In-Store (BOPIS) and curbside pickup options to reduce delivery costs while enhancing convenience for customers.  

Long-term competitive advantages (next 6-12 months)

10. Expand private label offerings

Retailers can reduce reliance on tariff-affected brands by developing exclusive private-label products. Private labels provide better control over costs and pricing while enhancing brand loyalty.  

11. Focus on value-added services

Offering bundled services, extended warranties, and high-quality tech support can increase perceived value, softening the blow that comes with increased ticket prices.  

12. Advocate for industry support

Engage with industry groups and policymakers to stay informed about potential relief measures, government incentives, or trade policy changes that could benefit retailers.  

13. Strengthen e-commerce & digital transformation

Expanding online sales channels, investing in AI-driven personalization, and utilizing data analytics for targeted marketing will be crucial in sustaining growth in a changing market environment.  

Turn challenges into opportunities

While tariffs pose short-term challenges, proactive retailers can turn them into opportunities for growth by focusing on cost control, supply chain resilience, and enhanced customer experience. Implementing these strategies over the next 12 months will help businesses navigate uncertainty in the short-term while positioning them for long-term success.

Is your business ready for the tariff impact? Let’s talk! Contact us today to learn how we can help optimize your customer experience and business performance.