How Retailers Are Combating Tariffs and Inflation With AI-Driven Pricing Strategies
Now that the U.S. has imposed tariffs on three major trading partners, retaliations from those countries (China, Mexico, and Canada) are in the works. This will put extreme pressure on retailers looking to maintain sales and preserve margins while maintaining manageable inventory levels.
Many retailers and brands have been working on this problem since President Trump announced plans to impose tariffs last November. They’ve worked to mitigate the impact by shifting where they source goods. They’re also deploying new technologies to help optimize pricing, which not only helps with tariffs but can also address inflationary price trends.
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As a result, one solution provider, Invent.ai, said it is seeing growing success in its dynamic pricing, promotion, and markdown optimization solutions. “Designed to help retailers navigate today’s dynamic market conditions — especially in the face of rising tariffs and inflation pressures — Invent.ai’s solutions empower retailers to implement adaptive, data-driven pricing strategies that align with both revenue growth and customer demand.”
The company said by employing advanced AI algorithms, its solutions help retailers and brands optimize pricing, promotion and markdowns to drive growth, reduce markdown losses and unlock revenue opportunities. The company said its solutions “utilize real-time inventory insights, enabling retailers to respond with agility to external factors like tariff increases and changing market conditions. This enables dynamic price adjustments that protect margins while keeping prices competitive.”
Regarding the value proposition of its solutions, Invent.ai said retailers using its solution “can integrate tariff-related price changes directly into their pricing models, ensuring the right pricing adjustments are made in response to shifting costs and price elasticity to know the potential sales outcomes.”
The platform also allows for in-market KPI testing. “Retailers can simulate pricing strategies and validate KPIs like sales uplift before full implementation, ensuring decisions are data-backed,” the company said, adding that its single platform “combines pre-season planning with in-season adjustments, allowing for continuous strategy refinement.”
Invent.ai noted that a global fashion retailer client, which it did not identify, using its platform “has powered a 6.5 percent increase in markdown revenue and a 2.4 percent increase in overall revenue, all while reducing markdown losses by 2.1 percent,” the company said, noting that the retailer “now relies on Invent.ai’s predictive scenario testing to identify and execute profitable pricing strategies, even in uncertain conditions.”
“In today’s rapidly changing retail landscape, where external factors can have a significant need for change in pricing, our solutions enable retailers to be proactive,” said Tav Tepfer, chief revenue officer, Invent.ai. “We’re proud to offer pricing optimization solutions that not only adapt to market shifts, but also drive real, measurable results for our customers, ensuring that they stay ahead with competitive pricing strategies that balance revenue growth and customer appeal.”
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