Tariffs and Retail’s New Negotiation Mindset: Navigating Today’s High-Stakes Environment
“Right people/right product.”
From my beginnings in retail, that was the mantra I always heard. Everyone knew it was the winning formula for retail. And I remember it being exciting and challenging as the merchant and store operations teams worked together to steer us towards common goals and consistent execution.
Reflecting back on it now, it’s clear that things were so much simpler then.
Early in my career I worked for a traditional men’s and women’s clothing retailer called g.Briggs. The chain consisted of six large, mid-box stores in the Baltimore, Columbia, and Annapolis, Maryland, markets, each averaging 16,000 square feet. I was the director of stores, representing the “right people” side of the business, and my peer Melanie Jolles (still one of my closest friends) was the director of merchandising, representing the “right product” side. We both reported directly to the owner and president, Skip Briggs.
Melanie and I worked together closely and partnered during the big buying trips to New York. My focus was on how we would position, train (on product knowledge), and support Melanie’s buys. In return, she and her merchant team supported the stores during floor sets, large markdowns, promotions, and the peak holiday season. It was a highly collaborative pairing.
Today’s environment is, to put it mildly, more complicated and complex for stores and merchants alike. The right people and right product sides of the business face new challenges that are frankly harder to solve and, in many cases, out of their control. In particular, the return and continuing fluctuation of tariffs has hit retail hard, and not just at the cash register. Merchants, buyers, planners, and allocators are feeling the pressure daily. What was once a fairly predictable buying cycle now feels like a moving target. Cost projections shift weekly, and suppliers, already stretched thin, are passing those pressures along.
As one retailer said recently, “We used to plan six months out. Now we’re reforecasting every six days.”
The ripple effect is real: tighter margins, shorter lead times, and relentless pressure to maintain competitive pricing — all while keeping customers loyal in a value-driven market.
The Changing Role of the Retail Merchant
Today’s retail merchants are finding that their job has expanded in some pretty dramatic ways. With the expectations placed on them now, they’re required to think more like financial strategists, global economists, and diplomats.
They must:
- Balance cost pressures with brand integrity.
- Pivot rapidly when tariffs or sourcing shifts upend plans.
- Reassess vendor relationships with both firmness and empathy.
- Collaborate cross-functionally to protect margin and maintain trust.
- Navigate the impact of environmental, social, and governance (ESG) issues on negotiations.
This new landscape requires not just technical skills but a new kind of mindset, one that blends data, diplomacy, collaboration, and disciplined negotiation.
That last bullet point, by the way, is a big one. Investors, regulators, and consumers are increasingly holding retailers responsible for ESG performance. Environmental covers the sustainability footprint of the products, services, and supply chains you negotiate for — for example, sourcing from suppliers who meet carbon-reduction or renewable energy targets, reducing packaging waste, or using recyclable materials and tracking emissions and water usage across your supply chain.
Social relates to the “right people” side of business. In retail this often includes fair labor practices and wages in factories; diversity, equity, and inclusion (DEI) in supplier networks and community impact; and ethical sourcing (e.g., no child labor). Each of these areas brings their own set of challenges in today’s environment.
Governance, meanwhile, is all about the structures, policies, and ethics behind operations. In practice, retailers and suppliers are expected to maintain transparent reporting and anti-corruption controls, comply with trade and immigration laws, and ensure strong board oversight and accountability.
The upshot of all of this is that buyers and merchants now have to factor not just price but also ESG criteria into vendor selection and contract terms — adding clauses about sustainability targets into supplier contracts, auditing factories for labor compliance before agreeing to terms, and negotiating for shared ESG data reporting that is becoming more difficult to obtain.
The Retail Negotiation Skills and Tactics That Matter Most Now
What does this mean for your team members? To thrive in this everchanging environment, buyers and merchants need to:
- Strategically analyze total impact, not just cost, including freight, duties, and risk balanced with longer-term gains that build trust.
- Read and respond to cues, avoiding assumptions that may throw a negotiation off track and may simply not be valid. They must also not miss reinforcement opportunities to move the negotiation forward.
- Communicate with clarity and confidence — both with internal partners and with vendors — using the Give, Get, and Gain negotiation skills:
Give and present information with specific actions and impact, and shape areas of agreement with reinforcement to strengthen the partnership towards collaboration.
Get strategic information to help move the negotiation and partnership forward. This includes asking for input using strategic questions (probing for flexibility and creative trade-offs and learning more about the vendor/partner’s needs to find collaboration and common ground); and listening to learn, which is really about the power of silence, allowing pause to ensure reflection on what is being proposed while showing the vendor they have been heard.
Gain by developing alternatives and testing for commitment to truly understand what is important to themselves and to the vendor/partner and then collaborating to overcome objections. This is also about applying partnership principles to negotiate beyond price, exploring terms, timing, and shared risk while avoiding defensive and attack cycles to sustain and move the conversation forward rather than letting it idle or reverse.
These have become essential survival skills in a market where volatility is the new normal. We call it “the new negotiation mindset,” one that recognizes every discussion, whether with vendors or internal partners, is an opportunity to create value not just claim it.
To adapt, buyers and merchants must shift to a collaborative mentality. And they need to develop the skills and strategies to navigate uncertainty and the unknown with confidence.
Adopting a New Negotiation Mindset
One thing is abundantly clear: Tariffs will continue to fluctuate over the next few years, and the ongoing swings will add to the pressures and complexities. Just as certain: The ability to negotiate effectively — across functions, levels, and priorities — will sustain success. The winners won’t be those who avoid conflict. Instead, it will be the ones who turn every challenge into collaboration and every pressure into possibility. That takes skill, practice, and grit.
What are you doing to set your teams up to thrive amid these volatile market conditions? We’d love to hear how your merchants and buyers are navigating today’s challenges.
Don’t leave it to chance: Over the decades since MOHR Retail’s founding, we’ve worked with buyers, merchants, and field leaders on the front lines of negotiations, helping them adapt to shifting tariff structures, navigate complex legal contracts, and secure real estate deals in competitive markets.
Our Retail Negotiation Series (RNS) helps retailers build practical, applicable skills that align with today’s realities. From preparing for high-stakes vendor conversations to balancing short-term savings with long-term relationships, RNS equips teams to negotiate skillfully with insight, agility, and integrity. Merchants learn to navigate the agreement cycle to effectively Give, Get, and Gain information that is critical to them and their vendor/partner. They then have the opportunity to practice and apply the negotiation skills and tactics to specific and real merchant world performance applications. Explore topics covered here.
If your merchant or planning teams are navigating these challenges, get in touch to learn how other retailers are rethinking their approach to negotiation in this environment.
