Evaluate Your Situation against Four Industry Profiles

With the surge of tariffs across almost all countries and products, and unpredictable changes to those tariffs after they are first announced, what is a retailer to do in terms of sourcing strategies?

In a recent blog post, Gartner analyst Gerhard Grimm tries to answer that question, noting that “here’s the catch: reactive retailers will struggle, while proactive ones will thrive.”

Supply Chain Digest Says... Retailers with complex supply chains due to many SKUs should use technology and workforce readiness to mitigate tariff risks, Grimm says. What do you say? Click here to send us your comments

How so?

Grimm says Gartner research shows that leading supply chain organizations that have already implemented three out of five key characteristics outperform their peers in all aspects of business. That means, Grimm adds, that to outsmart tariff volatility, retailers must prioritize these five key characteristics in their supply chains:

• Agility

• Resilience

• Regionalization

• Integrated Ecosystems

• Enterprise Strategy Alignment

See the graphic below for a summary of the attributes:

Beyond those attributes, Grimm says that even though each retail situation is different, retailers can structure their supply chains according to one of four profiles to build resilience to changing tariffs, as discussed below:

Design: Innovating Business Models to Reduce Tariff Exposure

Grimm says retailers focused on innovation and transforming their business models can proactively minimize tariff exposure by integrating product design tactics. This includes modifying materials, components or manufacturing locations to reduce duty classifications.

Source: Gartner

He adds that these retailers might also negotiate bulk purchasing with suppliers to benefit from currency devaluation, reducing overall landed costs.

Durability: Strengthening Supply Chains for Long-Term Viability

For retailers prioritizing sustainability and long-term risk management, durability is crucial, Grimm notes, adding that “tariffs can complicate these efforts, making ethically sourced or eco-friendly products pricier.”

Grimm also observes that companies should focus on alternative sourcing and risk mitigation rather than abandoning sustainability goals.

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Deferment: A Strategic Pause to Navigate Uncertainty

Retailers in tariff-sensitive sectors, Grimm says, often take a strategic pause when facing new trade barriers. Instead of immediately restructuring supply chains, he notes, they focus on cost optimization and flexible sourcing contracts to manage trade uncertainty.

For example, a big-box electronics retailer importing from China might delay new product launches, optimize inventory buffers and slow rollout strategies until long-term policies are clearer.

Government liaison teams are also crucial here, as retailers lobby for tariff exemptions on essential products

Decision: Leveraging Technology and Talent to Navigate Complexity

Retailers with complex supply chains due to many SKUs should use technology and workforce readiness to mitigate tariff risks, Grimm says. More specifically, they need to focus on real-time analytics, AI-driven forecasting and digital twins to model trade scenarios and optimize sourcing strategies.

Digital twin simulations help outline disruptions and implement contingency plans, ensuring smooth operations despite policy changes. Upskilling employees in trade compliance and rapid decision-making is crucial, as a trained workforce supports seamless execution of decisions on tariffs, sourcing and logistics.

What Actions Retailers Can Take Right Now

In conclusion, Grimm says that “retailers must align with a supply chain profile and take proactive steps to mitigate tariff risk.”

Any comments on Gartner’s comments on retail tariff trategies? Let us know your thoughts at the Feedback section below.