‘Tariff Engineering’, Enhanced Loyalty Programs + More Strategies That Footwear Players Should Examine in the Next 90 Days
Retailers and brands need to rethink their competitive strategies in the wake of sweeping, reciprocal duties as rising trade policies reshape the global retail backdrop.
While moving away from high-risk areas like China and Vietnam might not be possible for many shoe manufacturers, the research firm suggests that companies also rethink their product designs as part of their supply chain strategy. Dubbed tariff engineering, the idea is to tweak product designs, material inputs or classifications codes as one way to lower duties.
It noted that tariffs on one product can have cascading impact across the supply chains for both upstream components and downstream demand. “Product design, scenario planning, policy engagement and stress testing can help firms uncover and prepare for second-order impacts,” the research firm said.
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Coresight also said firms need to have a multi-pronged strategy that includes selective price increases and strategic cost absorption. But companies first must consider their pricing power, customer sensitivity, market competition, and margin flexibility before they can determine the best game plan moving forward.
One last option to consider includes seeking legal relief through formal petitions or lobbying efforts, the research firm noted.
As for how footwear brands should rethink their strategies against the current tariff backdrop, Fionn Uibh-Eachach, vice president, global commercial services at e-commerce innovation firm ESW’s Dublin office, had some thoughts about how U.S. tariff policies are shaking up the landscape for footwear brands.
“DTC (direct-to-consumer) brands will need to be both strategic and creative in order to navigate the uncertainty and rising costs while keeping customer loyalty in mind,” he said.
Retailers and brands need to understand their manufacturing and shipping supply chains so they can conduct a tariff impact assessment, which would then allow them to frame any strategies or opportunities that might help to mitigate against an increase landed cost due to tariffs, he explained. “These strategies could range from using existing customs measures, such as drawback or bonded warehousing, to changes in the supply chains or business model, such as B2B2C type importing arrangements to maximize wholesale import values, or alternative fulfillment strategies,” Uibh-Eachach suggested.
The 90-day pause — which doesn’t currently include China — will give fashion brands the chance to look at options available to counter any potential changes. “They can then look to long term strategies to put business model or supply chain changes into place that will minimize the consumer impact of the tariffs,” he said.
Another point of advice is that shoe brands that have stock they can “quickly bring into the U.S. within the 90-day window can shore up their inventory in advance of [key] selling periods,” he said. “The tariff landscape remains uncertain post the 90-day holding period and brands should look to alternative modeling around manufacturing supply chains and bulk importing for inventory in the short term.”
And when it comes to DTC businesses, he said one way brands can optimize their customer loyalty is with “transparency around pricing. Educating consumers on why the prices may be rising is a good way to earn their trust.”
Fiona Stevens, director of marketing at loyalty platform LoyaltyLion, also believes that now could be a good time for shoe companies to invest in their customer loyalty programs.
“Footwear brands are being hit from all sides. Tariffs are pushing up costs, supply chains are in question, and customers are feeling the uncertainty. It’s not an easy landscape to trade in,” she said.
While brands are expected to consider raising prices to navigate the increased costs from tariffs, Stevens said that probably isn’t an ideal solution when there are other options that would allow shoe firms to hold on to their existing customers and give them a much stronger position to protect profit margins.
“That’s why loyalty is such a smart investment right now. It’s not just about giving away points or discounts. It’s about making your existing customers feel valued, building trust, and giving them good reasons to come back, even when they’re spending more cautiously,” Stevens said. “It is both easier and more cost-effective to retain and convert a loyal customer than it is to acquire a new one.”
She noted that even with new customers, it will be far easier to secure a second purchase when the brand has a compelling loyalty program to drive more spending from returning customers during a time when companies may be more reliant on discounts.
And for footwear brands that have loyalty programs that already offer free shipping and rewards, Stevens said new perks should center on what else the membership community might value. “That might be early access to new drops or sales, exclusive invitations to in-store events, or even something as simple as a birthday treat,” she said.
The marketing director said that perks that feel like surprises work well with consumers, and letting people collect points faster or allowing them to buy pre-loved as new items are ways to make them feel valued while giving them a reason to come back and buy more.
“Loyalty isn’t a plug-in or a campaign. It’s a mindset and done properly, it can drive reliable revenue, even during a time of economic uncertainty,” she said. “Brands that take the time to deepen those relationships now will be the ones that ride out a dip in consumer confidence with a stronger customer base.”
