The Playbook: Price Sensitivity, Tech Trade-Downs Are Changing the Game for Retailers

Two reports uncover shifting consumer behavior as shoppers prioritize affordability, weigh loyalty against price hikes and embrace retro tech amid economic uncertainty

This story is part of “The Playbook,” a weekly column that takes a deep dive into the future of business, management and technology, with an eye toward practical applications for fitness and wellness executives

Two recent consumer trends reports reveal a significant shift in the mindset of today’s shoppers, who are becoming increasingly price-sensitive. Aside from concerns over rising prices, a report from First Insight also showed the potential impact of tariffs on consumer loyalty to retailers and brands.

And research from Circana revealed an expected pullback in higher-priced technology products, which includes a shift toward more retro-style products.

In the First Insight report, titled “Tariffs & Trust: Why Retailers Risk Loyalty with Price Hikes,” researchers found that shopper loyalty comes with a cost. The study also showed a disconnect between how consumers feel about price increases and how retail executives will respond.

The study was based on a survey of 306 CEOs, CFOs and COOs from major retailers and brands along with 3,393 consumers in the U.S., U.K. and EU.

“The study reveals that, even though 68 percent of brand and retail executives expect a negative reaction from customers — and 73 percent of consumers confirm they would be frustrated by price increases — 83 percent of executives plan to raise prices anyway,” the report’s authors said. “Consumers say they’ll respond to retailers’ decisions with either increased loyalty or decreased trust: Nearly 80 percent would feel more loyal to brands that absorb tariff-related increases, while nearly three in four would abandon their favorite brand for a cheaper generic if retail prices rise.”

According to First Insight, however, customers’ trust and loyalty are “not solely a function of brands’ and retailers’ ability to preserve pricing when faced with market forces beyond their control.”

The study found that to maintain customer loyalty while navigating circumstances that put their margins at risk, “77 percent of surveyed executives have preemptively communicated price increases directly with customers.” 

And for those retailers and brands currently planning to issue blanket price hikes, The Playbook move First Insight recommends is that “they instead engage customers directly to gain insights on what they’d be willing to spend and what pricing would be a dealbreaker on products across categories. The resulting insights can inform more nuanced pricing strategies.”

Here are some of the key findings from the report:

• Consumer Sensitivity to Price Increases: Nearly one-third of shoppers (30 percent) say any price increase could prompt changes in their spending habits. Consumers are susceptible to even the smallest uptick in costs.
• Skepticism About Price Justifications: Only 24 percent of consumers polled fully attribute rising costs to tariffs, with many suspecting retailers and brands of using tariffs as an excuse. However, 54 percent believe that government policies are the root cause of price increases.
• Consumer Expectations of Retailers: Retailers that raise prices can maintain loyalty by taking two key actions: communicating transparently about why prices are rising, and offering programs to offset costs such as loyalty rewards or discounts.
• Brand Loyalty Tied to Absorbing Costs: Brands that absorb price increases stand to gain strong consumer loyalty, with 79 percent of respondents indicating that they’d remain most loyal to brands that shield them from higher prices.
• Holiday Shopping Shifts Expected: Retail executives foresee notable changes this holiday season, with 92 percent anticipating challenges such as reduced consumer spending (56 percent), shipping/logistics problems (53 percent) and product shortages (40 percent).
• Most Affected Retail Categories: Should price hikes persist, shoppers say they will first cut back on spending in the following categories: home goods and furniture (54 percent), apparel and fashion (53 percent) and electronics/tech (50 percent).

“We can hear shoppers’ voices loud and clear, and now is the time for retail executives to put what they’re saying to work,” said Greg Petro, CEO of First Insight. “While most retailers won’t be able to avoid raising prices altogether, unilateral price increases are a surefire way to lose customer confidence and trust.”

“There are more informed ways of approaching pricing strategies and offsetting the burden on customers,” he added. “Customers are forthcoming about what they’ll spend, what they’ll buy, and where they’ll tap out — retailers simply need to engage them and communicate what they’re up to every step of the way.”

Why Consumers Are Pulling It Forward

Even with decades under my belt as a journalist, I still learn new things each day. Today, I learned a new consumer behavior term: “Pull-forward” consumer purchasing. This refers to shoppers who buy products earlier than they normally would. It is usually a response to expected price increases or for a promotion not expected to last.

I learned the term in the Circana research report, which showed that pull-forward consumer purchasing “that supported revenue gains in the U.S. consumer technology market during the first half of 2025 has waned, and is expected to result in softer second-half results.”

While overall consumer technology retail dollar sales grew 1.5 percent in the six months ended June 2025, Circana said its latest “Future of Consumer Technology” report forecasts full-year sales revenue for the industry to finish just one percent above last year, “as the impact of early pull-forward purchasing is realized alongside a pull-back on spending by consumers.”

“Technology came to the forefront of consumer purchase decisions early in the year, with a big emphasis on IT products as the PC market is entering a refresh cycle,” said Paul Gagnon, vice president and technology industry advisor for Circana. “However, that early boost is likely to weigh negatively on the second half as the trade-down behavior seen already from cost-conscious consumers in some product categories expands its reach.”

The data revealed that there was a higher unit demand for tech products such as TVs and pricey electronics, but they were had at a bargain. Consumers “opted for lower price alternatives, resulting in a two percent increase in unit demand, but a three percent decline in sales revenue for the category.”

“However, innovation and new form factors gaining acceptance supported strong growth in categories like smart glasses and smart rings, to the tune of nearly triple or quadruple last year’s sales revenue,” the report’s authors said. “Similarly, demand for more retro products like digital point-and-shoot cameras contributed to dollar gains of more than 40 percent in the first half of 2025.”

Circana said consumers will prioritize spending if prices rise: “Products like soundbars and smartwatches will be lower on the priority list than others, resulting in expected spending declines in 2025.”

 “Economic uncertainty and persistent inflation will pressure consumer spending, but planned tech upgrade cycles are expected to underpin demand resiliency for many categories,” added Gagnon. “The consumer will be more focused on affordability, even if it means trading down more frequently to offset any individual product price increases.”      

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