Navigating Tariff Impacts through Adaptive Demand Forecasting

What We're Hearing from our Customers

When we speak with our customers—many of them Fortune 500 enterprises—tariffs consistently emerge as a key concern. These companies often tell us that they feel somewhat blind to the impacts of tariffs on their businesses. They know that their input costs are likely to rise, but they don't know how to set prices, sign contracts with suppliers, organize their inventory, or choose which goods to promote.

Why Tariffs Break Traditional Forecasting

Tariffs introduce uncertainty by altering core business behaviors, which ripple through demand models. To name just a couple of examples:

Price Changes: When tariffs raise input costs, companies adjust pricing. If demand is price-sensitive (elastic), even small shifts can significantly impact sales.

Promotional Shifts: Marketing dollars may be reallocated to products or regions less exposed to tariffs.

Traditional forecasting systems—especially those built on deterministic models—fail under these conditions. They assume stability and produce a single prediction, leaving planners blind to the range of plausible futures.

Ikigai’s Approach: Smarter Forecasting with AI + Human Insight

Ikigai empowers companies to respond to tariff impacts using probabilistic forecasting and AI-powered What-If Analysis. Instead of a fixed forecast, Ikigai helps businesses model a spectrum of possible demand outcomes based on varying assumptions.

Key Capabilities:

1. AI-Powered What-If Analysis: Ikigai allows you to understand how demand changes as price changes—at the SKU, category, or regional level. Ikigai quantifies price sensitivity so you can adjust strategy with confidence.

2. Marketing Spend Impact Modeling: With Ikigai, you can test how reallocating marketing investments influences demand patterns. This helps teams optimize spend towards particularly important areas (e.g., towards SKUs least impacted by tariffs) while minimizing guesswork.

3. Granular, SKU-Level Forecasting: Ikigai enables you to move beyond top-line forecasts. Ikigai enables detailed predictions across channels, geographies, or customer segments—making local adjustments actionable.

4. Expert-in-the-Loop Design: Ikigai combines AI insights with planner intuition. Users can adjust model assumptions in real time, making the platform more accurate and transparent than black-box tools.

Practical Steps for Teams Facing Tariff Uncertainty

If you’re facing demand uncertainty due to tariffs, there are a few steps you can take to help create confidence in your business.

1. Identify High-Exposure SKUs or Markets: Map tariff exposure by region, category, or SKUs.

2. Quantify Price Sensitivity: Use advanced modeling tools like Ikigai to understand how price, marketing & promotional changes affect forecasted demand for particular regions, categories or SKUs.

3. Stay Dynamic: Forecasts shouldn’t be static. Updates your models frequently (as often as daily) as new data emerges to ensure you're always using the most-up-to-date information.

Conclusion: Turning Tariff Volatility into Opportunity

While many businesses have been caught unprepared for the impact of tariffs, those who are best prepared have an opportunity to capture market share.

Being prepared means having the right  technology in place to make the best decisions for your business.

Ikigai doesn’t aim to replace your ERP or logistics systems—it complements them by making your demand forecasts smarter, faster, and more resilient. When tariffs introduce uncertainty, Ikigai helps you anticipate disruption, not just respond to it.

In an increasingly unpredictable world, companies using Ikigai can move from reactive planning to strategic foresight—minimizing surprises and maximizing agility.

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