Sales of “nice-to-own” products like handbags are among the products likely to be hit hardest by tariffs leading to higher prices, the study found, while men’s and women’s underwear will be affected by higher tariffs. The potential impact is relatively much lower.
According to a new report from the NPD Group, “Navigating Pricingina Post-Tariff World”, purchasing decisions are more likely to be affected by household income or costs. Reduction, more impact will come from products considered as “necessities”, and some items may also be the most severely affected, such as bicycles, luggage, watches, game consoles, TVs, headphones, etc.
Market researchers stated that the report has observed a decrease in sales in some product categories following the introduction of tariffs in 2018.
The United States has imposed a new round of tariffs on another batch of imported goods from China that will take effect on September 1, 2019, which means that China’s goods worth approximately US$31 billion Goods sold to the United States (list Batch 4A: textiles, ready-made clothing and home textiles) will be subject to an additional 15% tariff. This new round of tariffs will cover 92% of China’s garment products exported to the United States and 52% of footwear products.
The remaining US$160 billion of Chinese exports to the United States in batch 4B of the list, including US$4.7 billion of textiles, ready-made clothing and home textiles, will be affected by an additional 15% tariff. Will take effect on December 15, 2019.
The study surveyed more than 2,500 consumers and found that sales in categories such as women’s bras and underwear, men’s underwear and baby products responded to price increases. Fewer because shoppers view them as necessities.
The study also found that the average selling price of goods in this category cannot estimate the announced consumption potential, based on the impact of price increases on sales.
Marshal Cohen, NPD chief industry advisor, explained: Consumer perceptions will determine the impact of tariffs on overall spending and the economy. Consumers will adjust the price and value of goods to their preferences and needs, spending less or delaying unnecessary purchases. Marketers should observe price trends and analyze sales impacts to estimate the impact on their product portfolio.
