Tariffs may dominate headlines. But for retailers, they're part of a broader pattern of trading uncertainty that shows no signs of slowing.
Talk with any buying or merchandising team right now and you'll find people wrestling with the same questions: What if our costs spike or transportation lags? Should our prices change? Do we need new sourcing strategies? And what are the downstream impacts of each decision we make? The pressure to answer these questions faster and more confidently is causing many retailers to fundamentally rethink how planning gets done. According to Accenture, more than 75% of supply chain executives expect higher disruption in 2026, with 85% planning to increase AI spending in response.
To understand what's at stake, Retail Dive spoke with Matt Hopkins, product marketing executive for Retail and Supply Chain at Board. He explained that the real issue isn't any single cost variable — it's the complexity of managing all of them at once, something most retailers are still struggling to do.
More than a tariff problem
Tariffs are one variable in a much larger intake margin challenge that includes shipping, freight, customs fees and currency exchange. What makes retail particularly vulnerable to cost volatility is timing. Volumes are committed, factories get booked and costs are assumed long before anyone knows what the tariff environment will look like at the time of landing.
"Retailers are uniquely exposed in a way that other industries aren't, because they have to make that buy decision so far out — often 12 to 18 months in advance," Hopkins said. "When you add tariffs into the mix, that makes that day job even harder for a buyer and a merchandiser. There's a significant commercial impact from getting sourcing and buying decisions wrong, especially for new seasons or products."
When cost assumptions miss the mark, the damage runs downstream into pricing, promotions and even the customer relationship.
"If your brand promise is that you're going to give customers really good trend-driven assortments, freshness and a decent price, that's going to be almost impossible to deliver if you're reacting to market volatility when it's too late," said Hopkins. "You're going to disappoint both the customer and probably your CFO when it hurts your margins."
The gap between adjusting and confident decisioning
The planning infrastructure most retailers rely on wasn't built for a volatile, signal-rich environment. Historical data sits in disconnected systems, and the connections that need to happen in near real time are instead happening slowly, if at all. IHL Group estimates $1.73 trillion is lost annually through retailers carrying too much of the wrong inventory and too little of the right — a direct consequence of planning that can't keep pace.
Yet the challenge goes beyond making timely adjustments. It's about confident decisioning — knowing precisely what to adjust so that it has the desired impact, including where to invest to get the right returns.
"Having that context around the tariff change gives retailers the ability to say: is this a short-term thing I can mitigate by moving stock, cutting my exposure, or changing my product mix? Or is it something fundamental where I need to revisit my whole sourcing strategy?" said Hopkins. "Those are very different types of decisions."
Making the shift to next-gen planning
The ability to leverage data has always separated leading retailers from those that fall behind. In the case of next-gen planning, internal data like sales history and inventory positions must combine with external signals like tariff schedules, supplier lead times, consumer sentiment and competitor pricing. A unified planning platform is what makes that possible, especially now where AI acts as an intelligence layer.
"Once you've got a signal and need to make a change, AI is really good at bringing together all those connected decisions," said Hopkins. "It can pull through other predictions and forecasts telling you what might happen 18 months out and consolidate that view from many different sources. Normally that's a huge manual job for a planner or buyer. AI can drastically reduce that time and lead to more accurate insights."
But the payoff extends beyond efficiency. "Traditional planning involves lots of detail, but it's quite difficult to get to a level where you can make more macro type decisions," said Hopkins. "AI is dealing with high volume and strategic decisions concurrently, which is quite unique."
For an industry defined by the constant pressure to balance what customers want today with what the business needs tomorrow, that's the shift that matters.
When cost volatility moves faster than planning cycles, Board Merchandiser Agent helps retailers connect signals, scenarios and merchandising decisions. To learn more, visit Board Merchandiser Agent | AI for Retail Merchandising Planning.