Emotion

It’s been quiet on the ‘tariff talk’ front for a while, but that’s starting to change. And I’m wondering what that means in advance of Holiday (and then beyond).

This month alone, there’s been coverage in places like the Wall Street Journal, Barron’s, New York Times, CNN, NBC News (the list goes on) have been talking about whether prices are rising because of tariffs and whether tariffs will have an impact on Black Friday/Cyber Monday.

Some retailers, like Walmart and Home Depot, have even said they’ve been absorbing tariff-related price increases, but will need to start asking consumers to do that instead. And Goldman Sachs published a report that said consumers will absorb 2/3 of tariff-related price increases by October.

That’s a lot of news in a really short period of time. Especially when it sort of felt like it was fading to the background.

While I’m not interested in arguing about whether all of this talk is right, it is interesting to me that, in the midst of all this talk, that DTCCI data has shown present spending from consumers plunging.

Are the two things related? I don’t know.

But it certainly feels like consumers are hearing that things are going to get more expensive for them. And that, I think, is really the most important part: the emotional and psychological effects of fear around rising prices. Those two things can change consumer behavior before anything else.

If I were running a brand, then, I’d really want to understand a good amount from my customer about where I fit in their lifestyle. Am I a luxury? Am I a candidate for trading down? Am I a better value buy in the future if my competitors are forced to raise their prices and I’m not?

There’s a bunch of other pieces, too, but if I can start to understand if I’m a value buy or a brand buy for my customers, I can do a lot to adjust my merchandising efforts and incorporate levers that protect my base and, hopefully, expand my base by finding the right levers to pull around value and brand.

And, like a change in consumer emotion might precede a need to actually change behavior, a brand’s ability to precede the change in consumer emotion better positions the brand to win when that happens. This feels like it would be a good time to do that.