Igor Rikalo is President and COO at o9 Solutions.
If the past few years have been any indicator, it’s no longer a matter of if market uncertainty impacts your business and supply chain—it’s a matter of when and to what extent.
So far in 2025, market uncertainty remains palpable as tariffs continue to evolve and impact numerous industries. With consumer confidence at a 13-year low, people are making purchasing decisions with more discernment.
Traditionally, when companies incurred increased business-related costs, they would raise the price of their end product sold to consumers. However, as consumer-facing industries continue to navigate numerous headwinds with no sign of slowing down, strategies and technology will play a critical role in how they manage their pricing strategies going forward.
Here are four ways companies can evolve their pricing strategy to compete in a volatile economic environment:
1. Create consistent customer value.
As enterprises—especially those in the consumer products space—seek out ways to allay rising operational costs, product promotions can drive up customer sales over a few weeks or months. However, this approach may backfire as a long-term strategy as it likely undermines the product’s price position and brand perception, which damages long-term product profitability.
To mitigate the increased cost of doing business without sacrificing brand pricing, companies should instead focus on aligning pricing with the brand’s or product’s perceived customer value over other similar products. This approach helps build customer loyalty and maintain long-term profitability.
2. Embrace cross-functional collaboration.
When implementing an effective pricing strategy that will yield long-term benefits, collaboration across all revenue growth management (RGM) verticals and planning functions is critical.
To ensure cohesive cross-collaboration across all teams, leadership should develop a framework, metrics and key performance indicators (KPIs) that align with business goals, which will then be shared across teams to inform pricing decisions across brand portfolios.
This type of collaboration allows teams to benefit from a fully connected, systematic approach to the RGM planning process. Key stakeholders will gain greater visibility into the impact of specific decisions and planning activities, which provides greater insights into the mid- and long-term effects on product and brand portfolios.
3. Adapt pricing strategies with technology.
Economic factors like tariffs and inflation that significantly impact how businesses price their products are likely to stay in flux in 2025. Businesses will have to become more nimble in implementing pricing strategies. It’s no longer a once-a-year occurrence, as businesses that have navigated prior inflationary cycles have had to adjust their pricing multiple times during a fiscal year.
To optimize the pricing adjustment process, the teams involved will have to consider several factors for each product and brand, including which products are in demand (segmented by customer group and region, etc.), competitor pricing, market trends and—probably the most important factor right now—what price customers are most inclined to pay for a product.
Teams will also need to determine which brands/products within their portfolio have the strongest customer demand and are most profitable, and then prioritize these items in the overall pricing adjustment strategy.
For these goals, AI and analytics tools can help navigate current economic headwinds. They allow vast amounts of disparate data to be collected, connected and analyzed quickly and efficiently to provide granular insights across sales data, promotional dynamics, price elasticity and consumer purchasing preferences.
Additionally, analytics tools can be used to help teams better understand the perceived value of specific products and brands through analysis of shopper demographics, product preferences and purchasing behavior. Real-time market intelligence can help inform tactical pricing decisions, especially in dynamic environments.
4. Drive effective change management.
Effective change management is also a key aspect of making sure all teams are aligned in using new technologies and processes. Leadership and key stakeholders will need to set a clear vision, develop a well-designed roadmap for how RGM strategies will align with value generation and develop clear roles and responsibilities to produce tangible results.
Additionally, implementing compatible technology platforms and tools across teams to establish a single source of information and creating a common language to avoid inter-departmental jargon are also essential in creating buy-in among cross-functional teams.
Conclusion
Volatility appears to be the new normal for businesses today. By strategically building long-term brand value and profitability instead of focusing on short-term promotional gains, companies can maintain a strong position now and in the future.
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