One-Size-Fits-None

Note: What’s your decision-making framework for post-tariff responses right now? What considerations are you thinking about the most? I’m curious how all brands are approaching this situation. Would love to hear from you.

My wife, Nikki, runs marketing for a DTC nursery furniture brand, Nurture&. They sell a high AOV product that’s a considered purchase for a specific use case.

Like most brands, they’re trying to figure out the best path in a post-tariff environment. One of the things they did, though, was send an email letting their email list know that despite tariffs they would keep prices low for April. That campaign’s success was higher than some of their BFCM campaigns. 

For Nikki and many brands, this is a fantastic outcome. And while this aligned with some of my advice in a previous newsletter, I’m realizing that the current “situation” isn’t one-size-fits-all. I’ve been diligently consolidating ideas and tips in response to the question, what best practices are you seeing from other brands? 

Now I’m walking some of that back, all this to say – it depends.

The email Nikki’s brand sent is a perfect illustration of why. While it was a great outcome for her brand in their current situation (it likely pulled a whole bunch of demand forward and some of that demand was probably incremental to the brand), it could be, potentially, a not-so-great outcome for another brand. Say, for example, one that has limited pre-tariff inventory.

There are, of course, knock-on effects from all of this, and when you start to explore them, you begin to see how dynamic the situation is right now, and why the tactical advice I shared last week isn’t a one-time, set-it-and-forget set of tactics to employ.

If we just continue using this email as an example, we can set the context for the market by segmenting brands in the category into four positions, using this two-by-two matrix that Taylor Holiday from Common Thread Collective shared on a webinar with Drew last week:

• High pre-tariff inventory, strong cash

• Low pre-tariff inventory, strong cash

• High pre-tariff inventory, weak cash

• Low pre-tariff inventory, weak cash

Taylor’s framework here is really, really good. What it shows is that brands in one segment are going to have different immediate responses available to them than brands in another segment. And when those brands are in the same category or have the ability to pull consumer spend from another category? That has the makings for a very dynamic environment.

The email my wife’s brand sent, for instance, likely pulled a good amount of category demand forward. It might have created incremental demand for them. For a brand that has the inventory on hand, getting those purchases in a profit-maximizing time frame is probably a great thing. But it does create two questions: 

• For brands like Nikki’s, what do they do in, say, three to six months when there’s less demand in the market, since they (and likely others) have pulled forward so much of it? This feels like a forecasting question more than anything.

• If you’re a brand that can’t pull forward demand (because you have low pre-tariff inventories), what do you do in that same three to six month timeframe? This feels like a marketing tactics question more than anything. 

And if the latter responds with keeping prices lower for longer (because of either a strong cash position or the belief that those who didn’t buy sooner couldn’t afford to), it creates a natural countermeasure from the former: Do they, too, lower prices? Or do they try to protect margins, knowing they won more share in the short term?

You could game theory the whole thing and run through a bunch of different situations, but the takeaway here is that every move by a brand of some scale will have an impact on both the consumer and your direct and indirect competitive sets. 

Or you could take the approach of doing the exact opposite of your competition – when they zig you zag. They raise prices in response to tariffs, you lower yours to ruthlessly capture market share.

At a minimum, it probably is accurate to say that all players involved are more interconnected than they were a few weeks ago. 

Which brings us back to that list of tactics I shared last week. 

There is no universal, one-size-fits-all order in which to execute on these tactics (though you could probably map a general guidance for each of the segments Taylor’s framework creates). What is universal, though, is that each of these tactics will come into play for everyone at some point. And when they do, the need to stick with them will only grow, since more brands will be changing their status quos as their situations change, too.