Geopolitical Uncertainty Is Retailers’ Top 2025 Concern

Tariffs and increased costs may have fashion and apparel purveyors feeling blue, according to data from BlueCherry’s annual supply chain and technology report. 

BlueCherry is Computer Generated Systems (CGS)’s fashion and apparel supply chain software. This iteration of the report marks the 10th anniversary of collecting such data. But for Paul Magel, president, business applications and technology outsourcing at CGS, the more trends and concerns change, the more they stay the same. 

While Magel has seen companies’ interests, priorities and fears change over the past ten years, it remains clear that most businesses still have work to do on supply chain visibility, as well as on keeping costs reasonable. 

In 2025, the latter theme feels especially important.

Eight in 10 respondents said price and cost control will be at least moderately important for 2025, and 76 percent of respondents said the same of economic and political stability. Magel said price control relies heavily on the geopolitical environment globally. 

“They’re intermingled. Because of the tariffs and the instability, they’re concerned about their pricing controls. I think there’s a little bit of tariff derangement syndrome going on in the industry. People are getting way ahead of their skis,” he said. “They want to pick up and leave a sourcing destination. I’m like, where are you guys going to go? You don’t know what’s next…Where are you going to go that’s not going to get tariffs?”

But political and economic wobbling is what really keeps executives up at night; it was the No. 1 serious concern among respondents, with 40 percent saying they felt some unrest over it, up nine percentage points from 2024’s figure of 31 percent. Meanwhile, 34 percent of respondents said price and cost control were a serious concern, down 7 percentage points from last year.

That’s likely, in large part, because of the U.S. political environment—President Donald Trump’s flurry of tariffs has given brands and retailers some strife, as have price-sensitive consumers reacting to the president’s policies. 

But Magel said this kind of uncertainty is a lesson that brands and retailers should’ve learned years ago, when the Covid-19 pandemic proved that disruptions aren’t far underneath the surface of many organizations’ global supply chains. 

“Shame on you for being worried about the tariffs, because you should have learned the lessons of Covid, in that you should have diversified [your] supply chain already. You should have strengthened your partnerships with your vendors. You should have already had an agreement to do sharing of data…and you should have a much more symbiotic relationship, because when things like tariffs are coming in, then you’ve got a reason to talk to your partner and say, ‘Okay, we’re in this together,’” he said.

In the face of potential disruptions, some retailers and brands have indicated a strong interest in nearshoring or reshoring. In 2024, 18 percent of respondents said those strategies would be very important or important to their growth; that figure surged by 27 percentage points to 45 percent of respondents saying the same this year. 

Magel said the nearshoring trend began after the onset of Covid-19, when brands and retailers fully acknowledged their deep reliance on China for manufacturing and transport. That cycle has again returned, as Trump’s China tariffs—and the variability that has, thus far, come with his strategy—threaten to drive up costs for companies doing the majority of their sourcing from China.

While Magel projects that Mexico and some Latin American countries building vertically integrated factories might start to get some play from companies looking to further diversify their supply chains, he has a strong hesitation about reshoring. 

“The cautionary tale there is, we don’t have the labor force in the United States. So you can bring manufacturing here, but who’s actually going to do it? We don’t have the engineers anymore, and we don’t have the labor—we’re deporting all of the labor force right now,” he said. 

Beyond nearshoring and reshoring, brands and retailers also grew their interest in demand planning, likely in part to help up lead times in an effort to keep costs as low as possible. In 2024, 55 percent of respondents said they would prioritize merchandise demand planning, and in 2025, that rose by 22 percentage points to 77 percent. 

Magel said upping the game on technology strategy can help brands and retailers get there; he expects to see artificial intelligence solutions within demand planning surge.

Accordingly, AI and analytics supersedes merchandise demand planning when it comes to organizations’ technology spends. Last year, 54 percent of respondents had AI projects completed, started or planned. This year, that figure has surged, with eight in 10 organizations saying the same.

But in order to implement any technology effectively, he advised, clean, reliable data is a deeply important consideration. 

“It’s all about the data,” he said. “Make sure you have the appropriate data, digitize, validate that data coming in, contextualize it and then make sure you’ve got the sophistication to understand how to utilize that data to be as efficient and effective as possible.”

Fifty-six percent of respondents are currently in the process of improving their demand planning, and 27 percent of organizations have future plans to do so. That demand planning will have to extend to a variety of channels as consumers’ preferences continue to change. 

This year, respondents indicated that their top growth opportunity is acquiring new customers and working on new channels. That breaks a six-year long streak of e-commerce being brands and retailers’ top priority. Magel said that’s likely because e-commerce growth has plateaued for many, and in the face of an uncertain economic environment, companies want to future proof themselves by serving new and existing consumers to the best extent possible. 

“Instead of just looking at e-commerce as that channel of growth, they’re looking across everything—whether it’s new geographies, new platforms, social media, whatever it may be that they need to sell through, versus just saying, ‘I want to increase my e-commerce business,’” he said.