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Tariffs on imports from Canada and Mexico are disrupting retail, forcing major eCommerce players to adjust their strategies. From price hikes to supply chain shifts, retailers are bracing for the impact.
In this week’s edition, we explore how businesses are navigating these changes and preparing for potential fallout. Get the latest insights on pricing, supply chains, and what lies ahead for eCommerce in 2025.
ECOMMERCE NEWS
How U.S. Tariffs Are Shaking Up Major Online Retailers
As the U.S. imposes 25% tariffs on Canada and Mexico, major retailers are adjusting their strategies—some factoring in the impact, others waiting for clarity. With uncertainty looming, retailers are balancing supply chain shifts, pricing strategies, and profit margins.
🔹 Retailers Brace for Higher Costs – Best Buy and Target reported earnings just as tariffs took effect, leaving them little time to adjust projections. Bath & Body Works, Foot Locker, and Gap have included tariff impacts in their outlooks, while BJ’s Wholesale and Lowe’s are waiting to see how things unfold.
🔹 Tariffs May Lead to Price Increases – Best Buy’s CEO warned that these tariffs will likely lead to higher consumer prices, as manufacturers pass costs down to retailers. Costco and Macy’s are working to minimize price hikes.
🔹 Supply Chain Shifts to Avoid Tariff Fallout – Target cut its reliance on China from 60% in 2017 to 30% today and aims for less than 25% by 2026. Abercrombie & Fitch, Gap, and Macy’s are also diversifying their sourcing to mitigate risks.
While the tariff landscape remains fluid, the eCommerce industry is gearing up for potential higher costs and supply chain adjustments in 2025.
SPONSORED BY SWAP COMMERCE
5 Ecommerce Growth Strategies for the Age of Tariffs
Global tariffs are changing ecommerce…and fast. Is your business prepared? Swap surveyed 100 ecommerce executives on the current state of global retail with an alarming 83% of those surveyed expressing concern that new regulations could threaten their business.
How can you stay ahead and stay competitive?
Download Swap Commerce’s “5 Ecommerce Growth Strategies for the Age of Tariffs” for insights and future-proof tips including:
The hidden costs that could disrupt your business
How to protect margins and prevent shipping chaos
Tips to get ahead of uncertainty
Swap is the EcommerceOS for Shopify brands, consolidating global shipping, returns & exchanges, package protection and cross-border logistics under one roof, saving brands upwards of 30% on their ecommerce tech stack.
ECOMMERCE TRENDS
The Pricing Strategy of Temu Sellers
Temu’s rapid rise in eCommerce isn’t just about low prices—it’s also about the psychology of discounts. By showing massive markdowns, Temu sellers boost perceived savings and drive conversions.
🔹 Deep Discounts, Higher Perceived Value – A study found that big discounts trigger emotional responses, making shoppers feel they’re getting an unbeatable deal. 65% of Temu products are discounted, some by as much as 98%, compared to Amazon’s max of 67%.
🔹 Unbranded Lookalikes, Not Brand Names – Omnisend found that 96% of Temu’s listings resembled Amazon products but were generic versions with altered packaging or blurred logos. For truly identical items, Temu’s pricing matches Amazon’s.
🔹 Quality vs. Savings Trade-Off – Temu sellers manipulate three key dials: Quality, Savings, and Value. By turning up perceived savings, they make buyers more accepting of lower-quality products.
While deep discounting drives conversions, it can also lead to doubts about product authenticity. The takeaway? eCommerce merchants must balance discounts, quality, and perceived value to maximize long-term success.
ECOMMERCE DIGITAL PAYMENTS
Pay-by-Bank Gains Traction: Lower Cart Abandonment, Higher Security
Pay by bank is emerging as a game-changer in digital payments, with early adopters seeing lower cart abandonment, improved security, and reduced transaction costs.
🔹 80% of businesses using pay by bank report better data security and higher consumer engagement. Retail, grocery, ridesharing, and telecom sectors are seeing the biggest benefits.
🔹 Lower costs compared to traditional payment methods – Businesses spend 4% to 10% of revenue on credit card processing fees, fraud, and chargebacks. Pay by bank offers a more cost-effective alternative despite initial setup expenses.
🔹 Incentives drive adoption – 95% of businesses considering pay by bank are willing to offer cashback rewards, while 68% would offer purchase discounts (around 2%) to attract users. Fraud protection is another major incentive, with 79% of businesses ready to provide it to encourage adoption.
With cost savings and security advantages, pay by bank could become a mainstream payment option—especially as businesses look for alternatives to high card fees and fraud risks.
ECOMMERCE TECH
Klarna Eyes $15 Billion Valuation in Upcoming IPO
Klarna is reportedly days away from filing for its $1 billion initial public offering (IPO), with plans to list on the New York Stock Exchange at a valuation above $15 billion, according to Bloomberg.
🔹 IPO expected in early April – Klarna confidentially filed with the SEC in November 2024 and aims to price its IPO next month.
🔹 BNPL continues to thrive – Klarna’s core buy now, pay later (BNPL) service is growing in popularity, even among financially stable consumers. Flexible payment options are shaping how shoppers approach spending.
🔹 Tech IPO momentum – Klarna’s move could revive public listings for other fintech firms like Chime and Zilch, following a slow period for tech IPOs.
Meanwhile, Klarna’s CEO Sebastian Siemiatkowski predicts SaaS industry consolidation, revealing Klarna has dropped 1,200 third-party SaaS providers in favor of in-house solutions.
Klarna’s IPO could mark a turning point for fintech valuations—and a potential boom for BNPL adoption as consumers seek smarter ways to manage their spending.
ECOMMERCE TECH
eBay Enhances Search for Faster Shipping & Local Deals
eBay is making it easier for shoppers to find fast-shipping items and local listings with AI-driven Search updates.
🔹 Fast delivery visibility – Search item cards now display delivery range estimates for all fast-shipping products.
🔹 New “Shipping and Pickup” filter – Shoppers can now filter results to find items with quick shipping or local pickup options.
🔹 Smarter delivery estimates – eBay invested in AI-powered models that factor in location, shipping service, seller history, and real-time data to improve delivery predictions.
🔹 Germany’s “Top-Service” badge – A new quality assurance badge highlights items from trusted sellers offering fast, free shipping and returns.
With these upgrades, eBay is sharpening its competitive edge against Amazon and Etsy, improving its user experience to drive more sales.
Signing off,
The Merchant @CartHustle