Navigating Tariffs: A Retailer's Imperative for Agility and Growth

In this article we discuss:

• Global Workforce Planning: From Shelf Stockers to Store Managers
• Visibility and Data Integrity: Seeing the Whole Picture, Globally
• Speed and Insights: Reacting Faster Than Your Competition
• Managing Workforce Volatility: Flexible, Scalable Staffing
• Retaining, Recruiting, and Onboarding: Your People Are Your Anchor
• Contract Management and Compliance: No More Tariff Bombshells
• Beyond the Firefighting: A Holistic, Future-Proof Approach

Written by Jennifer Johnson, Senior Industry Marketing Director, Retail and Hospitality

Today’s global landscape is highly volatile for retailers. Tariffs and trade wars threaten to squeeze already thin margins. Retail CEOs and COOs are scrambling just to keep the goods flowing, while CFOs are watching costs balloon, and CIOs are desperate for agile tech solutions. This isn't a drill; it's a full-blown crisis demanding immediate, strategic action. Caught in the crossfire of unpredictable trade policies, retailers are being forced to be more nimble and more precise than ever before just to remain competitive.

Global volatility is creating a domino effect, both in-store and online. Existing supplier agreements are being renegotiated with no guarantees, once-reliable international sourcing is now a constant guessing game, and carefully calculated cost structures are no longer reliable. Retailers are simultaneously battling rising import costs, facing unpredictable consumer spending, and navigating a patchwork of ever-evolving trade regulations, all while desperately trying to maintain competitive prices, keep their shelves stocked, and their customers and employees happy.

In order to not just survive but also thrive in the midst of such chaos, retailers need to dramatically shift how they operate, moving beyond gut feelings and embracing a new era of data-driven decisions and radical operational flexibility. This isn't about one department fixing things; it demands a fully integrated approach, weaving together workforce planning, financial forecasting, and operations into one cohesive, agile system.

Global Workforce Planning: From Shelf Stockers to Store Managers

The impact of these tariffs isn't just about the price tags; it's hitting staffing models directly, too. As sourcing shifts and potentially returns domestically, retailers need to strategically redeploy their talent across their store networks and distribution centers. This is where tools like Workday Adaptive Planning can help. 

Imagine being able to run real-time scenarios showing how a 10% tariff on imported denim will impact your apparel margins, and how to adjust staffing levels in affected departments or even consider retraining staff for handling domestically sourced alternatives. This level of predictive foresight on labor costs, identifying potential skill gaps in new sourcing regions, and optimizing workforce deployment across your footprint is no longer a luxury—it's the bedrock of mitigating the risks of today’s volatile trade.

Visibility and Data Integrity: Seeing the Whole Picture, Globally

In this chaos, uncertainty demands absolute clarity. You need a single version of the truth, a crystal-clear, unified view of your entire retail operation, from the distribution center to the point of sale. 

Workday offers a unified data architecture, and serves as your foundation for clarity, ensuring your HR data on staffing levels aligns perfectly with your financial data on cost of goods and your operational data on inventory flow and scheduling to demand. This end-to-end visibility empowers your store managers, operations, and executive teams to make rapid informed decisions based on accurate, real-time insights, instead of manual, inaccurate, outdated spreadsheets.

Speed and Insights: Reacting Faster Than Your Competition

In this lightning-fast landscape, speed is the ultimate competitive advantage. Workday Prism Analytics isn't just about pretty charts; it's about delivering actionable insights allowing you to proactively address potential issues before they become problems. By processing massive datasets on sales trends, supply chain disruptions, and even customer sentiment around tariff-impacted products, Workday Adaptive Planning helps you identify problems early, predict potential stockouts, and optimize pricing strategies in real-time. Adaptive Planning provides the capabilities to rapidly model various tariff scenarios, analyze their potential effects on your key financial metrics, and adjust forecasts dynamically. This enables you to proactively understand the implications and make informed decisions to mitigate risks and capitalize on any emerging opportunities.

Additionally, maximizing the power of AI on top of this clean, trusted data is a game-changer. Workday AI Agents can automate anomaly detection in your sales data, predict demand shifts based on tariff announcements, and even flag potential supplier risks, allowing your teams to respond to market changes with unprecedented agility and scale.

Managing Workforce Volatility: Flexible, Scalable Staffing

Staffing volatility is a direct consequence of the recent trade uncertainty. You might need to be able to quickly scale up staff in domestic distribution centers or bring in specialized skills for handling new product lines. This is where flexible workforce strategies become essential. Solutions like Workday Workforce Scheduling and Labor Optimization utilize AI to schedule your workforce with precision while also balancing worker preferences with business parameters, budget, compliance, and labor needs. 

Workday VNDLY allows you to efficiently manage contingent workers—bringing in temporary staff for peak seasons or specialized tasks without the long-term commitment of full-time hires. This agility to scale your workforce up or down as trade winds shift is a crucial tool in your arsenal for long term profitability.

Retaining, Recruiting, and Onboarding: Your People Are Your Anchor

Equally critical is your ability to hold onto your best workers, and Workday Skills Cloud allows you to see the full picture of skills at your organization to make smarter decisions about hiring, growing and deploying your talent. You have to double down on investing in your existing workforce, providing targeted training and development to handle new sourcing procedures or customer inquiries about tariff-related price changes. Simultaneously, your HR teams need to be hyper-efficient in attracting and onboarding new talent, especially in areas experiencing growth due to shifting supply chains. An integrated platform like Workday, with its robust talent management, skills assessments, and learning capabilities, allows you to manage your entire employee lifecycle seamlessly, ensuring you build a resilient and adaptable workforce that can weather any storm.

Contract Management and Compliance: No More Tariff Bombshells

Navigating the increasingly complex web of supplier contracts and ensuring you’re compliant with ever-changing trade regulations is a massive headache. Solutions like Workday Evisort and Contract Intelligence are no longer nice-to-haves; they're essential risk management tools. By automatically analyzing thousands of supplier agreements and identifying clauses related to tariffs and price adjustments, these AI-powered tools allow your legal and procurement teams to quickly understand contractual vulnerabilities. This accelerates the process of renegotiating unfavorable terms and adapting to new trade rules, minimizing potential financial and operational disasters.

Beyond the Firefighting: A Holistic, Future-Proof Approach

Workday offers the comprehensive, integrated platform you need to not just react to tariffs but to build a truly resilient and agile retail organization for the future. This includes but is not limited to:

• Talent management: To attract, retain, engage, and develop the adaptable workforce you need.

• Risk and compliance: To navigate the ever-changing regulatory landscape with confidence.

• Financial management and planning: To manage your financial operations, including planning, budgeting, forecasting, and reporting.

The global trade landscape is even more unpredictable than usual. But retailers who can master agility, leverage the power of unified data, and fully embrace integrated technologies like Workday will thrive in the midst of this turmoil and emerge stronger, more efficient, and more attuned to the needs of their customers. This isn't just about mitigating risk; it's about transforming uncertainty into a significant competitive advantage and securing your long-term success.

Discover Workday’s economic impact in retail.