Provide additional feedback

</p> <p> <button id="wpaicg_submitFeedback"><br /> Submit </button><br /> <button id="closeFeedbackModal"><br /> Close </button> </p> </p></div> </p></div> <p>The 2025 sales forecast compares with a 3.6% annual sales growth of $5.29 trillion in 2024. The NRF says this year’s forecast aligns with the 10-year pre-pandemic average yearly sales growth of 3.6%.</p> <p>“It’s the hard data on employment, income and tariff-induced inflation — not consumer sentiment — that supports our view of a slower trajectory for consumer spending,” NRF Chief Economist Jack Kleinhenz said in a statement announcing the projections.</p> <p>Deloitte’s “2025 US Retail Industry Outlook” made a similar prediction. Deloitte’s economist, Akrur Barua, projects consumer spending will grow by 3.1% in 2025. The report also says spending growth on durable goods should remain high at 4.7% in 2025.</p> <p>Much like the NRF, Deloitte’s outlook also mentions tariffs. It specifically states that a sharp hike in tariffs could lead to a broader economic slowdown and potentially contract consumer spending and GDP in 2026, which would, as you might imagine, negatively impact retail sales.</p> <p>Speaking of tariffs, let’s clarify how they work. The company importing the goods pays the tariff, not the country from which the goods originated. It’s an additional cost for the company, usually passed on to the consumer. Like any increased cost, tariffs pinch margins.</p> <p></p> <p></p> <h2 class="wp-block-heading" id="h-advertising-budgets-are-always-on-the-chopping-block">Advertising budgets are always on the chopping block</h2> <p>When margins are tight, advertising is often among the first things businesses cut as they try to balance spending money and encouraging sales.</p> <p>Marketers know this, as seen in last month’s IAB data, which said 94% of advertisers were concerned <a href="https://martech.org/94-of-advertisers-concerned-tariffs-will-lead-to-cut-in-ad-spending-iab/" target="_blank" rel="noopener nofollow">tariffs would reduce their advertising budgets</a>.</p> <p>Sixty percent of those surveyed by IAB expected their ad budgets to drop 6%-10%. Traditional media and social media advertising are expected to face the largest budget reductions, according to the survey, while CTV and online video may be more resilient.</p> <p>Advertising and retail spending are all connected. It’s a powerful flywheel that drives much of the U.S. economy. The advertising is used to sell goods and services. But consumers, of course, need income – and in some cases disposable income — to buy those goods and services.</p> <p><strong><em>Dig deeper: <a target="_blank" href="https://martech.org/94-of-advertisers-concerned-tariffs-will-lead-to-cut-in-ad-spending-iab/" rel="noopener nofollow">94% of advertisers concerned tariffs will lead to cut in ad spending: IAB</a></em></strong></p> <h2 class="wp-block-heading" id="h-what-does-recent-history-say-about-tariffs-retail-spending-and-ad-spend">What does recent history say about tariffs, retail spending and ad spend?</h2> <p>Over the past 25 years, there have been three major tariff episodes. In 2002, tariffs were placed on steel mill products from non-NAFTA countries, tires from China in 2009 and a trade war with China that lasted from 2018 to 2020. </p> <p>We will put aside the 2009 tire tariffs because it is a very narrow example.</p> <h3 class="wp-block-heading" id="h-steel-tariffs-of-2002-2023">Steel tariffs of 2002–2023</h3> <p>The tariffs caused U.S. steel prices to increase by about 30%, which led to higher prices for cars, appliances and other steel-made equipment. It’s estimated about $75 billion in additional costs were passed on to consumers. </p> <p>Steel-using firms trimmed discretionary spending, cutting marketing and hiring in particular. U.S. ad spending was already very low in 2002 as the country was recovering from a recession. Automakers did increase ad spending with incentives designed to spur demand, not as a sign of health. Overall, ad spending was down in the B2B and durable goods sectors as an atmosphere of caution prevailed.</p> <h3 class="wp-block-heading" id="h-u-s-china-trade-war-2018-2020">U.S.-China trade war, 2018–2020</h3> <p>Multiple rounds of tariffs occurred from 2018 to 2020, including a 25% tariff on $250 billion worth of Chinese imports, lower tariffs (7.5%-15%) on $110 billion more and global steel and aluminum tariffs.</p> <p>Consumer categories with heavy tariffs saw price increases of 1.7%-7%, retail spending growth slowed and the annual cost per U.S. household in 2019 was estimated at $400–$500.</p> <p>Auto ad spending fell 7%, and retail ads dropped by 5%. However, this was also a time when advertisers started to look more closely at performance-based campaigns, leading to cuts in broad brand campaigns in favor of strategies that allowed for optimization. </p> <h2 class="wp-block-heading" id="h-what-impact-will-tariffs-have-on-retail-and-advertising-in-2025">What impact will tariffs have on retail and advertising in 2025?</h2> <p>The most significant difference between these earlier episodes and 2025 is the breadth of the tariffs (as of this writing). There are some other points of concern as well:</p> <ul class="wp-block-list"> <li><strong>Inflation: </strong>Given the recent inflationary environment, consumers are especially sensitive to price increases.</li> <li><strong>Tight labor market:</strong> Low unemployment is good for supporting spending, but it’s bad for companies that need agility to make supply chain changes, for example, to avoid tariffs. They need people to execute those plans.</li> <li><strong>Geo-political tensions:</strong> There’s a lot of it, with the Russia-Ukraine conflict still front and center.</li> </ul> <p><strong><em>Dig deeper: <a target="_blank" href="https://martech.org/how-smarter-measurement-can-fix-marketings-performance-trap/" rel="noopener nofollow">How smarter measurement can fix marketing’s performance trap</a></em></strong></p> <h2 class="wp-block-heading" id="h-advice-for-marketers-worried-about-the-impact-of-tariffs">Advice for marketers worried about the impact of tariffs</h2> <p>What does all this mean for marketers?</p> <h3 class="wp-block-heading" id="h-you-have-data-use-it">You have data, use it</h3> <p>Your martech stack and the platforms on which you advertise are feeding you plenty of data. If you clean it up and analyze it, it will provide some clues to help you weather the storm.</p> <p>Companies that maintain a brand presence and fight the temptation to go completely dark recover faster from these disruptions. Find the channels delivering the best ROI and focus your efforts there. If your data says you’ve got your ICP right and those channels are effective, that might mean investing in more targeted channels.</p> <h3 class="wp-block-heading" id="h-watch-consumer-sentiment-and-adjust-your-message">Watch consumer sentiment and adjust your message</h3> <p>Trade tensions often lead to a drop in consumer confidence. When consumers are stressed, there’s a temptation to discount, but that’s challenging when the tariffs raise costs. </p> <p>Instead, consider value-added promotions like bundles and lean into loyalty points and discounts. </p> <h3 class="wp-block-heading" id="h-keep-a-close-eye-on-opportunities">Keep a close eye on opportunities</h3> <p>To this point, the tariff news had been a bit unpredictable. Opportunities will potentially present themselves in two ways:</p> <ul class="wp-block-list"> <li><strong>Government mitigation:</strong> Certain industries that are struggling might get help from the government to ease the pain.</li> <li><strong>Tariff changes:</strong> Exemptions for specific countries and/or goods might present opportunities to improve margins and pass deals to your customers.</li> </ul> <p>That all being said, this is uncharted territory for just about everyone. Hold on to your hats. </p> </div> <p><br /> <br /><a href="https://martech.org/how-tariffs-impact-retail-sales-and-ad-spending-and-why-2025-might-be-different/" rel="nofollow noopener" target="_blank">Source link </a></p> <div class="post-views content-post post-15439 entry-meta load-static"> <span class="post-views-icon dashicons dashicons-chart-bar"></span> <span class="post-views-label">Post Views:</span> <span class="post-views-count">5</span> </div> </div> <div class="blog-post-tag"> <div class="row"> <div class="col-12"> <div class="share-tag blog-share"> <div class="posts_nav"> <div class="post-left"> <a href="https://digitalinfowave.com/cd-player-brings-together-retro-aesthetics-with-modern-functionality/"><i class="fa fa-angle-left"></i>Previous post</a> </div> <div class="post-right"> <a href="https://digitalinfowave.com/a-comprehensive-list-of-2025-tech-layoffs-2/">Next post<i class="fa fa-angle-right"></i></a> </div> </div> </div> </div> </div> </div> </div> <div id="comments" class="comments-area"> <div id="respond" class="comment-respond"> <div class="bottom-title"><h2 class="comments-heading">Leave a comment <small><a rel="nofollow" id="cancel-comment-reply-link" href="/how-tariffs-impact-retail-sales-and-ad-spending-and-why-2025-might-be-different/#respond" style="display:none;">Cancel reply</a></small></h2></div><form action="https://digitalinfowave.com/wp-comments-post.php" method="post" id="commentform" class="comment-form" novalidate>All fields marked with an asterisk (*) are required <div class="row comment-form-wrap"> <div class="col-lg-4 col-md-4 col-12"> <div class="form-group"> <input type="text" placeholder="Your Name *" name="author" id="name-cmt" required="required"> </div> </div> <div class="col-lg-4 col-md-4 col-12"> <div class="form-group"> <input type="text" placeholder="Your Email *" name="email" id="email-cmt" required="required"> </div> </div> <div class="col-lg-4 col-md-4 col-12"> <div class="form-group"> <input type="text" placeholder="Your Website " name="url" id="website"> </div> </div> </div> <p class="comment-form-cookies-consent"><input id="wp-comment-cookies-consent" name="wp-comment-cookies-consent" type="checkbox" value="yes" /> <label for="wp-comment-cookies-consent">Save my name, email, and website in this browser for the next time I comment.</label></p> <div class="row"> <div class="col-12"> <div class="comment-message"> <textarea placeholder="Your Comment " name="comment" rows="6" required="required">