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Consumers are more willing to accept price increases on specific products as a result of tariffsbut only within certain limits. Thats one upshot from the upcoming 2025 FutureBrand Index, which launches later this year and includes data shared exclusively with Fast Company. President Donald Trumps tariffs are starting to make a mark on businesses and consumers, with Americans facing a cumulative increase in prices that will cost the average household some $2,700 in lost income, according to the Yale Budget Lab. Some products will be worse hit than others: Clothing prices are expected to rise by 36% in the short term, while motor vehicle prices will rise some 13%, Yale predicted. And on a broad scale, experts have estimated that GDP could shrink by as much as 6% over the long-term as demand for goods and services dwindles. Yet consumers may be more tolerant of price increases in some cases than they are in others, the FutureBrand Index found. In a survey of more than 3,000 professionals, it reported that a price increase of 20% appears to be the maximum before most consumers balk and look for cheaper alternatives. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}})}(); As far as we can judge, a maximum price increase of around 20%, driven by tariffs or changes in trade rules, is often acceptable when it is clearly explained and positioned within certain key factors, according to the report. The 20% figure is a useful benchmark, but it’s crucial to recognize that, for humans, price is a feeling, said Jon Tipple, FutureBrands chief strategy officer. The perceived value, the brand’s reputation, and the public’s emotional connection all influence how that number is interpreted. This means brands can exceed that threshold if they successfully reframe the narrative and enhance the overall experience, he added. Should companies explain tariff price hikes? Probably Digging deeper, how much more people are willing to pay varies substantially across industries. For example, consumers are willing to accept a 25% increase in the cost of technology and software, but only a 20% hike in the price of food or alcohol before they consider shopping around. Most people will tolerate a 22% rise in the cost of retail products (a category the index defines as a broad range of goods,) and a 21% increase in the automotive and manufactured parts categories. Transparency and justification stand out in the index report as key to how consumers and businesses react to cost increases. If companies can justify hiking their prices, for example by making clear they are out of the companys control as in the case of tariffs, consumers tend to be more understanding. That finding jibes with recent polling from Pew Research that found some 61% of respondents disapprove of the Trump administrations tariffsa sign that Americans do, by and large, understand that price increases are tied to external business factors. In other words, consumers dont feel like businesses are simply trying to squeeze them purely for profit. Critically, the index found that value preservation is essential; people are more willing to pay higher prices if quality, reliability, and service levels remain intact despite the trade-related challenges. What this seems to suggest is that tariff-induced price increases are somewhat psychological. If businesses can successfully tie a cost hike to higher duties or other things beyond their control, then at least some customers will take it in stride.
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E-Commerce
The U.S. is the only country in the world where foreign tourism spending is set to decline in 2025 compared to last year: A recent report from the World Travel & Tourism Council predicted a drop of 8.2% from 2024, a clear indicator that the global appeal of the U.S. is slipping, according to the industry group, driven by a sense that the Trump administration is hostile to foreigners. Visits from Germans and Danes are down by double digits, while Canadian visitors dropped 37% this July compared to last July. That reality has led some in the travel business to get creative. Enter ResortPass, a platform that allows anyone to experience all the perks of a luxury hotel without staying the night. It works with 2,000 hotel partners, including major U.S. chains from Kimpton and Hilton to the Ritz-Carlton, to offer amenities like pool access and spa passes to staycationers. Hotels have realized they need to figure out ways to monetize other parts of the hotel, said CEO Michael Wolf. The revenue that we send hotels is incredibly high margin, because there’s such low variable costs, he added. The view from home ResortPass takes a cut from each reservation. According to Wolf, the company has grown exponentially since he took the reins three years ago. And he said that its local dayguests or daycationers who are driving the most business: 87% of business in New York, 86% in the Bay Area, and 81% Los Angeles is from locals. Thats because while more international travelers are staying away, more Americans are also staying put. Forty-six percent of Americans planned a summer vacation this year, a steep drop from 53% last yearwith almost two-thirds stating its because they cant afford it. Fervor for revenge travel, a post-pandemic trend where holidaymakers made up for lost time with ambitious trips, has faded. In turn, working Americans are unlikely to even take all their vacation days; some 78% do not use all of their paid time off. Instead, consumers may be more drawn to indulge in short-term self-care, such as taking a day to rest and recharge, to lie by a pool or get a massage to help avoid burnout. And if you already live within transit distance of the hotel, even better: For example, a New Yorker can hop on the subway and hit the rooftop pool at the William Vale in Brooklyn. At the same time, hotel prices have surged in recent years; the average price of a New York City hotel room in September 2024 was $417, the highest monthly rate ever recorded. And hotels are keeping room rates high despite the lack of guests; ResortPass allows these establishments to generate an untapped stream of revenue from parts of the property that are already catering to overnight guests. Wolf says its akin to how airlines have (unpopularly) increased fees for amenities that were already present, such as add-on drip charges for seat selection or more legroom. The difference is [our] users love it, he says. Neighbors have purchasing power ResortPass has found that local day guests spend more during their brief staysat least double that of overnight guestsand tend to return to the property and recommend it to friends. If youre a day guest, by definition the premise of your day is to come and spend all day enjoying that hotel, Wolf said. Its helped vacation meccas like Las Vegas, he said, which saw tourism decline for a sixth consecutive month in July. Its one of ResortPasss best-growing markets, with hotels able to fill up underutilized cabanas and daybeds. ResortPass is bullish about the future even if the post-Labor Day weather is too chilly for pia coladas by the pool. Fall merely brings a different set of opportunities for customers, Wolf said, like cozy spa days and saunas. There’s an extra level of serendipity, he said, because you didn’t even know you could do this thing.
Category:
E-Commerce
The Walt Disney Co. will pay a $10 million fine to settle a Federal Trade Commission lawsuit alleging it allowed personal data to be collected on kids under 13, violating federal law.The FTC said Tuesday Disney violated the Children’s Online Privacy Protection Act, or COPPA, which requires kid-oriented apps and websites to get parents’ consent before collecting personal information of children under 13.According to the complaint, Disney failed to properly label some videos that it uploaded to YouTube as “Made for Kids.” The mislabeling allowed Disney, through YouTube, to collect personal data from children under 13 viewing child-directed videos and use that data for targeted advertising to children, the FTC said. That’s because, since the videos weren’t labeled as being for kids, they included targeted advertising.Representatives for Disney did not immediately return a message for comment.Google, the parent company of YouTube, agreed to pay $170 million in a similar settlement in 2019. Associated Press
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E-Commerce
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