Import costs are going through the roof as the U.S.–China punitive tariff crisis escalates. In fact, tariffs on Chinese goods have surged into triple digits, effectively choking off trade and squeezing margins. In apparel alone, the average import duty more than doubled from 14.5 percent in 2024 to 30.6 percent in 2025—that’s an extra $26 billion in costs hitting retailers’ bottom lines. This tariff turbulence is forcing fashion and retail companies to make tough choices on pricing, sourcing and inventory amid unprecedented cost volatility.
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Amid these headwinds, price elasticity has become a critical tool for guiding strategy. Unlike price sensitivity, which reflects perception and is qualitative, price elasticity reflects behavior and is a quantifiable measure of how demand responds to price changes. If a small increase in price causes demand to drop sharply, demand is elastic. If sales remain steady despite a price hike, demand is inelastic. Understanding how sensitive demand is to price changes—and how it differs by product and consumer segment—is now mission-critical for protecting revenue.
Understanding elasticity helps retailers answer hard questions with clarity. Should a 10 percent cost increase be passed on—or will it cause demand to collapse? Which categories can support higher prices, and which risk losing volume? How does elasticity vary across product, consumer segments or economic environments?
The key is marrying elasticity insights with market intelligence. By monitoring competitive shifts, watching for consumer strain and adjusting in real time, retail teams strike the right balance between price and profitability—while staying aligned with customer expectations.
Register for “Tariff Turbulence: Leveraging Technology & Pricing Elasticity to Thrive in 2025” on May 8, 2pm ET to learn how to translate elasticity metrics and AI market intelligence into real-world pricing, forecasting and sourcing decisions that directly safeguard margin, revenue and customer retention. Speakers include Ravi Rangan, chief technology officer, and Jade Huang, VP, strategy & market intelligence, both of Centric Software, and Kate Nishimura, senior news and features editor, Sourcing Journal.
Watch for the webinar to learn:
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How to detect early signs of substitution risk, sourcing pressure and competitive price shifts
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How to model tariff cost impacts in real time using AI-powered Market Intelligence and elasticity metrics
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How “what-if” scenario simulations guide smarter inventory and buy decisions under volatile conditions
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The difference between elasticity and sensitivity—and why that distinction matters for pricing strategy
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How elasticity varies based on product type, brand positioning, income trends and market signals
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Why elasticity is not fixed—and how to adjust pricing with confidence as consumer behavior evolves