A Wren Says

Full price strategy. Price increases. In this economy? Yes, and with their whole chests.

Brands are unashamedly moving forward with full and higher price strategies despite this uncertain economic climate. Many consumers have become more price sensitive, decreasing how much they spend as they brace for the impact of tariffs. In the face rising food costs, they have to make hard decisions, and that means dropping those unnecessary purchases. They simply don’t have the disposable income to deal with it. In spite of this brands are keeping prices high. Why? Because those aren’t the shoppers they’re worried about.

On the other side of the economic tracks, the rich and wealthy have stable incomes. They felt no need to decrease their spending. They have the room in the budget for these extra purchases. These are the trusty consumers that brands can depend on right now. So they are marketing to them. But how long will that last?

For luxury brands, that strategy works. It means catering to their perennial consumer, instead of those who were coming in for a one-off splurge purchase. But for the mall brands, that depend on foot traffic, whose customer profiles include a mix of income levels, will this strategy work? Do these brands risk losing their core champions in pursuit of a dollar today?

In this economy, brands are also struggling to see profits. They are also facing higher prices for their raw materials. They, too, are being impacted by tariffs. Higher prices are going to become an inevitably in this situation. But how high should you go? Or rather, how high can you go before turning off too many of your loyal customers?