Tariffs are dominating the economic headlines and are hitting American consumers in terms of actual price increases and fears of further price increases and the recession predicted by some respected economists.
As costs rise on imported goods, shoppers are responding quickly: cutting back, switching brands, and rethinking purchases across categories. For brands, this isn’t just a supply chain issue — it’s a consumer trust moment – and an opportunity for those who seize it.
Consumer data reflects how people are planning to adjust their purchasing habits in the wake of the tariffs:
- 83% of consumers say they expect to change how they shop due to new tariffs, with 60% cutting back on electronics and dining out, according to an InMoment survey via Investopedia.
- 78% of consumers plan to spend less or choose cheaper alternatives due to economic uncertainty, a PYMNTS Intelligence report found.
- 76% of voters are concerned about the effect of tariffs on prices — and 75% want policymakers to prioritize inflation control, according to a National Retail Federation (NRF) poll.
This environment creates a clear challenge — but also an opportunity — for brands to lead with empathy and personalization.
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Table of Contents
Understanding the Chain Reaction
If they don’t act prudently, brands can fall into a revenue and income draining funnel because of the tariffs. The tariffs will increase prices, resulting in lower demand for purchases. To attempt to counteract the decline in demand, many brands will discount heavily, but that leads to much slimmer margins and growing uncertainty about the future.
But brand marketers don’t need to settle for a race to the bottom. There is a better option.
Empathetic Marketing Helps Build Customer Relationships
The current price increases are causing consumer concerns about further price increases. While the knee-jerk reaction is to cut prices to maintain market share, the smartest merchants won’t reduce prices across the board. They will offer reassurance and empathy.
A CMS Wire blog notes that another time rife with economic (as well as other) fear – the Covid-19 pandemic – magnified the need for companies to be empathetic about their customers’ concerns. “Consumers became loyal to brands they felt were deeply and genuinely concerned with their needs and priorities.”
In a time of rising prices and an uncertain economy, it is important to help customers with transparency, value, and trust.
So, brands should:
- Be transparent about price increases and provide behind-the-scenes views on what the brand is doing (e.g., eliminating waste, working closely with suppliers to keep costs down) to help consumers.
- Use behavioral data to personalize promotions and avoid unnecessary communications that can feel tone-deaf. Sending too many messages can lead to marketing fatigue and reduced customer loyalty.
- Bundle products to offer customers saving without sacrificing perceived value – or offer loyalty-based rewards and early access.
One Size Doesn’t Fit All
Some consumers will be much more impacted by tariffs than others. Some are scaling back entirely, others are stocking up on non-perishable goods to get ahead of the tariffs, and others aren’t changing their buying habits. Therefore, it’s more critical than ever to finely segment customers and act accordingly.
This means doing more than simple segmentation (e.g., by age, family size, marital status). Instead use behavioral signals from customer interactions and purchase history to segment customers by customer journey.
This is where Positionless Marketing and state-of-the-art tools like AI-powered personalization make the difference. Platforms that offer real-time segmentation and journey orchestration enable marketers to quickly identify and react to shifting customer behaviors with targeted messaging and campaigns.
With the right, data-driven insights, brands can respond quickly with targeted actions. Data-driven insights enable marketers to:
- Identify which customers are likely to churn without outreach
- Recognize high-value customers who are still active, but are more price sensitive than others
- Create empathy-based campaigns that acknowledge uncertainty while still driving customer engagement.
Conclusion
Make empathy the strategy. Especially in times of economic tension, people remember how brands treat them and respond to their concerns and needs. Brand marketing leaders who recognize that their customers are just as anxious as they will have the edge during these trying times and in the future.
So, the message now can’t be simply: “Buy from us.” It needs to convey we see you; we’re with you – and here’s how we’re helping.
Empathy isn’t just a nice to have – it’s a necessary, winning strategy for trying economic times like these.
