As fashion retail continues to face the turbulence of US tariffs, the end of the de minimis rule, and changing consumer preferences, the key to resilience lies in the agility, flexibility and accuracy of your assortment.
Discover the strategic and actionable tactics from the Shaping Resilience: Agile Assortment Planning in Times of Change webinar, with Style Arcade CEO and Co-Founder Michaela Wessels, and Lyndsay Houser Lees, an omnichannel merchandising executive with over 20 years of experience across e-commerce and retail, including Ann Taylor, Ralph Lauren, and Tory Burch.
“It’s about being agile. It's about being data-informed and having the right systems and people in place to make the decisions,” said Lyndsay Houser Lees during the webinar.
Here are the key strategies to manage pricing and profit shifts while maintaining brand integrity, practical assortment planning, and flexible inventory tactics, and how to maintain a customer-first approach during times of change.
1. Staying Positive
“As you become a leader in any industry, it’s very important to be able to stay positive and keep the people around you feeling good about what they're doing—whether it's the team of people that work directly for you or your cross-functional partners. You have to get people to buy in on whatever you want them to be focused on, and what your strategies are,” said Lyndsay.
- Remain optimistic to spot opportunities. Instead of responding with fear, remain optimistic and be transparent with staff to help them get through uncertain periods and start to see the opportunities, too.
- Calculated risks are important. Understand the different options and contingency planning opportunities that your business has.
- Trust your buyer's gut. Understand when your gut is telling you to follow a trend, or dig in further to something that is changing in your business.
“Some of the best decisions are made when you can tap into that intuition,” said Michaela. “And intuition is always backed by experience. So when you're using those two things together, it's incredibly powerful.”
2. Adjusting with future-focused solutions
- Go wide before you go deep. Harness customer and product data to diversify or broaden your assortment to better respond to rapidly changing consumer preferences.
- Cut the tail on unproductive items within your assortment. Reduce inventory and/or SKUs that are not important to the brand or seasonal story. If these items are not carrying their weight, they are merely consuming cost investments, floor and site space.
- Strategically plan price increases, ensuring they align with brand identity and are supported by past and current customer behavior data.
- Utilize a unit margin dollar high/mid/low model to plan for the different scenarios possible with price increases. Look at data within your current range or previous price increases taken in your business to determine which of the 3 will most likely occur.
- Offset margin pressure by optimizing product mix and enhancing the perceived value of core items through storytelling, innovation, or emotional engagement.
- This needs to align with trends you anticipate will continue within your product strategy, and additional marketing, visual/site merchandising support may be needed.
- Closely monitor competitors' pricing, merchandising, and marketing tactics to stay competitive and responsive to market shifts.
- Localize assortment, price tiering and distribution to reflect regional consumer behavior and market demand, avoiding cross-market price discrepancies.
- Protecting the allocation of your inventory to be in the right place at the right time is always important to ensure productivity. Even more so when you are applying a new strategy and need to be able to react quickly to the response of customers.
- Optimize product allocation by aligning inventory with high-performing regions and tailoring messaging to match local customer priorities and expectations.
3. Optimizing inventory
“I don't think all brands are going to be able to implement something like [surcharges], but it's definitely something that I think we're going to start to see in some places in the world,” said Lyndsay.
“Just thinking creatively about how you're managing the offset of the margin decreases that could potentially come with tariffs and protecting the story of your brand, what your customer expects, and the experience that your customer expects, is the key to success,” she said.
- Prioritize key products: Identify top sellers and core products critical to your brand identity.
- Stretch inventory: Plan allocations carefully to make limited inventory last longer in high-demand areas and shift products between channels/regions based on real-time demand.
- Channel optimization: Analyze which sales channels (retail, wholesale, DTC) are performing best and allocate inventory accordingly.
- Invest in predictive analytics: Use data to forecast customer behavior more accurately and create contingency plans for sudden changes in consumer behavior.
- Repurpose inventory creatively: Repackage core lines or slow movers for different seasons or events, or market to different demographics.
Additionally, you can minimize costs around inventory and supply chain management by considering:
- Locking in prices earlier by booking large volumes of greige fabric in advance.
- Reevaluating non-core elements, such as trims to cut costs without affecting perceived product value.
- Working with suppliers to share the burden of tariffs and cost increases creatively.
- Carefully implementing small surcharges if necessary, but clearly communicating them before the customer arrives at the checkout.
4. Maintaining profit
“Nobody is going to give you back your plan for the year at this point,” said Michaela. “You set a plan number, that's your benchmark. So when you are looking at that and thinking about how you're going to maintain that profit and the gross margin, I think it's important to focus on the dollars and not the rate.”
- Focus on margin dollars over margin rate by using category mix strategies and detailed financial modeling to maintain profitability despite shifting costs.
- Be comfortable running lean, agile operations by repurposing existing inventory, shortening lead times, and building flexible contingency plans based on customer response scenarios.
- Leverage data-driven decision-making alongside market intuition, using historical analysis and automated processes to respond quickly and strategically to change.
- Scenario plan for pricing and assortment shifts, modeling outcomes based on historical customer response to mitigate risk before making changes.
- Use COVID response as a blueprint to navigate customer expectations, operational changes and how you're investing and distributing your product.
5. Investing in technology
“Lean teams need smart tech, and smarter inventory decisions, and everything that we're doing now is inventory decision-making on a global scale and assortment planning across all sorts of different regions with new parameters,” said Michaela.
- Integrate advanced merchandising platforms to reduce costly human errors like misallocations or incorrect sizing by moving beyond manual spreadsheets.
- Use predictive analytics and forecasting tools to identify emerging customer preferences in real time and capitalize on unexpected demand more effectively.
- Leverage data visualization and intelligent insights to empower teams to make more informed and confident decisions at scale
6. Communicating with stakeholders
“If we're trying to build loyalty in a time like this, nothing better we could do than start to communicate with our brands,” said Lyndsay. “But the customer is your other partner in this. And the more you let them in and the more you connect with them, the more chance you have of building loyalty for the long term.”
Be transparent with customers
- Clearly communicate any price adjustments, delays, or product modifications before checkout—no surprises.
- Treat customers as partners, involve them in the journey by explaining external pressures (e.g., tariffs, supply chain shifts) in a way that fosters empathy and trust.
- Use transparency to build trust and reinforce your brand’s integrity
Empower all teams and partners
- Ensure store staff and customer service agents fully understand the reasons behind pricing or product changes.
- Provide concise, clear scripts or talking points so every team member delivers consistent communication to customers
- Regularly collect insights from these teams to gauge customer sentiment and refine your strategy.
- Share the "why" behind business decisions with your internal teams, from operations to marketing.
7. Getting creative
- Focus on the customer experience first. If you’re looking at price changes, leverage historical feedback and data to predict how you’re going to respond.
- Adjust category mix alongside price increases: Double down on high-performing categories (the 80/20 rule), protect core sales drivers, and use trend pieces or premium product lines with higher prices to offset rising costs.
- Distribution strategies: Hone your e-commerce strategy and house more of your product on your website versus shipping to stores to better react to changes.
- Invest in micro assortments: Audit the pricing architecture, color mix, core mix, fashion mix, and assess and re-evaluate. Focusing on assorting very particularly to your different sales regions in accordance with their levels of margin.
- Trial a 3PL: Test and learn the benefits of third-party logistics, which could be a key growth opportunity, alongside streamlining operational efficiencies and mitigating landing costs in particular regions.
“Make sure you focus on what your customer needs and wants,” concluded Lyndsay. “The customer experience at the end of the day is the most important part of your brand's success. If you're doing something that is not right for your customer or your brand story, then you're not going to be successful.”
Margin Calculator
Style Arcade’s Margin Calculator powers financial decisions by building real-time costing logic into range planning, for brands and retailers to visually quantify how tariffs, currency and supply shifts will affect margins. As retailers face greater pressure to protect profit margin, smarter and faster margin modelling gives retailers the visibility they need to stay ahead.
Main Image Credit: Archdaily
