The retail and consumer packaged goods (CPG) industries are navigating a turbulent economic landscape. A significant factor is the unpredictability of tariff increases, which directly translates to potential higher costs for businesses. These cost escalations occur as consumers are becoming more value-seeking and cost-conscious, looking for lower prices and thereby less willing to pay more — in the same tariffs environment that is driving pressure for businesses to cut costs. Constant fluctuations in costs and tariffs require continuous management and analysis, highlighting the critical need for data transparency. A unified data foundation harnesses the capabilities of AI, giving businesses faster and more precise insights into everything from anticipated consumer behavior to predictive analytics based on their historical sales data to updated tariffs information. 

This blog will explore how data can help make sense of this volatility, enabling businesses to understand the actual and potential impact of tariffs on costs, predict consumer responses, assess overall business impact and evaluate various response options.

Making sense of the chaos with data

When destabilizing forces like tariffs strike, smart companies turn to data analysis to chart a path forward. And that’s where Snowflake’s AI Data Cloud can help understand what’s happening and plan next moves — so leading businesses can not just respond, but predict and even preempt challenges.

1. Getting granular with costs: For manufacturers and consumer goods companies, tariffs don’t hit all products equally. Only by carefully examining their bill of materials (BOM) can companies see exactly which components are affected and by how much. Snowflake makes this easier by allowing data from ERP systems to be combined with tariff information from the Snowflake Marketplace, helping companies gain a clearer picture of new cost structures across their product lines and at every level.

2. Understanding how customers will react to price fluctuations: When tariffs force companies to consider raising prices, they need to know how consumers will respond: Will they accept the increase? Will they look elsewhere? Will they forgo purchasing altogether? By bringing historical sales, pricing and promotional data into Snowflake, companies can predict customer behavior across different products, segments or regions through sophisticated machine learning models. These insights can help determine whether it is smarter to pass costs along to consumers or absorb them internally instead. 

3. Protecting margins through sophisticated simulations: Finance teams need to understand how tariffs will affect the bottom line — across products, customers and regions. By running complex margin simulations across millions of records on Snowflake, they can combine cost, revenue and pricing data to forecast impacts. These insights support critical decisions about pricing strategies, which products to keep or discontinue, and even how to approach negotiations with suppliers and customers.

4. Finding and evaluating new suppliers effectively: Sometimes the best response to tariffs is finding new suppliers in countries with more favorable trade terms — but this is far from simple. Such a move requires evaluating potential partners on cost, quality, capacity and risk. Snowflake helps by allowing companies to combine their procurement data with supplier information and logistics data, making it possible to run data-backed sourcing simulations across different geographies. 

5. Rethinking manufacturing locations: Tariffs often make companies reconsider where their products are made. Moving production closer to an end market, for instance, might help avoid duties and cut shipping costs. Snowflake supports these big decisions by bringing together external data (like labor costs, real estate prices and tax incentives) with internal operational information to create a complete picture of the potential benefits and drawbacks. 

Demo: How Snowflake makes a difference

In a world where trade policies can change overnight, Snowflake’s AI Data Cloud offers a solid foundation that allows companies to be agile. By breaking down data silos and enabling secure collaboration with partners, retail and consumer goods companies can respond to trade disruptions with confidence and speed.

Want to see how Snowflake can help your business weather the tariff storm? Check out our demo to learn more about: 

• Granular tariff impact assessment, down to specific products and suppliers
• AI-powered real-time predictions and recommendation refreshed with every data update
• Access to data insights through the intelligent assistant