This Order Management Gurus discussion features retail technology executives discussing how omnichannel technology, order management systems, and supply chain optimization are critical tools for navigating the tariff crisis and trade policy disruptions in 2025.
Q: How are tariffs impacting retail technology investment in 2025?
A: Retailers are actually increasing technology investment despite tariff pressures, focusing on order management systems, warehouse automation, and supply chain visibility. Companies like Pet Value Canada and Spencer's Gifts are prioritizing fulfillment optimization and cost-to-serve reduction rather than cutting tech budgets.
Q: What is the tariff rate impact on retail imports from China?
A: Tariff rates on Chinese imports have fluctuated between 50% to 145%, creating extreme uncertainty for retailers. Spencer's Gifts, heavily dependent on Chinese manufacturing, is exploring nearshoring and bonded warehouse solutions to mitigate cost impacts.
Q: How are Canadian retailers responding to US tariffs?
A: Canadian retailers like Pet Value are accelerating "shop local" strategies, with 68-70% of Canadian consumers prioritizing Made in Canada products. Retailers are adding country-of-origin metadata to product pages and optimizing for "Canadian-made" search queries.
Q: What order management capabilities are critical during tariff disruptions?
A: Key OMS capabilities include: real-time inventory visibility across networks, dynamic order routing, split shipment handling, cost-aware fulfillment decisions, and integration between planning and fulfillment systems for greater agility.
Q: How is AI being used to address tariff challenges in retail?
A: Retailers are implementing AI for scenario modeling, SKU-level tariff tracking, demand forecasting with external signals, cost optimization by region, and price sensitivity analysis to determine optimal pricing strategies.
Q: Should retailers pass tariff costs to consumers?
A: The strategy varies: retailers must calculate true landed costs first, then determine market price tolerance. Pet Value took an offensive approach, actually reducing private label prices by 15% to gain market share, while optimizing cost-to-serve elsewhere.
Q: What is nearshoring and why does it matter for retail?
A: Nearshoring means sourcing products closer to end markets (Canada, Mexico vs China) to reduce tariff exposure and shipping times. Retailers are exploring bonded warehouses in Canada and alternative sourcing corridors including Europe.
Q: How do seasonal retailers handle tariff timing issues?
A: Seasonal retailers like Spirit Halloween face unique challenges with 12+ month product development cycles. Timing ocean freight arrivals and managing inventory proximity to stores becomes critical when tariff rates change unpredictably.
Q: What technology investments help reduce retail fulfillment costs?
A: Key investments include: orchestration layer optimization, 3PL partnerships, automated distribution centers, smart routing algorithms, and just-in-time inventory management to reduce cost-to-serve from 10% to 8% or lower.
Q: How do loyalty programs help during economic uncertainty?
A: Loyalty programs drive customer retention and provide predictable revenue. Stored value wallets (like Starbucks) generate free cash flow, while targeted promotions and segmentation help maintain customer stickiness despite price pressures.
