PlayAbly Podcast Episode 22: How Tariffs Are Reshaping E-Commerce: Strategies for Staying Competitive

Tariffs are back in the spotlight, and e-commerce brands are feeling the impact. In this episode of the PlayAbly Podcast, we break down what tariffs really mean, who pays the price, and how they’re shaking up global trade. Join our host and PlayAbly CEO, John, as we explore how brands can navigate rising costs, diversify supply chains, and leverage strategies like customer loyalty programs and ecommerce gamification to stay competitive.

We also dive into the power of shoppable games, segmentation, and retention marketing—because in an unpredictable market, your best bet is keeping existing customers engaged.

🔹 How brands can communicate price increases without losing trust
🔹 The rise of loyalty programs and gamification in customer engagement
🔹 Why now is the time to focus on retention, not just acquisition

Tune in to learn how to stay agile, data-driven, and ahead of the curve. Don’t forget to subscribe and leave a review!

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Transcript

PlayAbly Podcast Episode 22: How Tariffs Are Reshaping E-Commerce: Strategies for Staying Competitive

Kajal: [00:00:00] Welcome back to the Playably podcast. Today, we are talking about tariffs and the effect on e commerce. Tariffs is a word I know that everybody's heard just nonstop for the last couple of months. I'm not sure that everyone knows what tariffs are, so we'll probably start with that just to make sure that we all understand.

So I have with me, John, our founder and CEO of Playably. John, can you define what a tariff is for us? 

John: Sure, and I'm excited for this conversation in which we will do our best to stick to the technical definitions and leave any politics out of it no matter what that might mean. No politics. Heh heh.

At the highest level, though. Tariffs are traditionally, historically, a tool that's used by governments to influence trade. And how do you do that? For [00:01:00] imports, That is goods that are brought into a country. The government can charge a tariff or a tax on those goods. Now, obviously there's been a lot of confusion about who pays those tariffs, but as somebody who has bought.

goods overseas before my wife has quite a predilection for luxury handbags, as an example. I can tell you with quite certainty that the receiving party, the party that ordered the goods, the party that is receiving the goods from overseas pays the government some percentage of the value of the goods that are brought in, right?

So what that means is my cost. for those goods has gone up by 10, 25, 50 percent or even more. And then it becomes my choice as to whether or not I raise my prices [00:02:00] to my end users who are in the same country as me. So the reason that they historically have been strategic is that you would apply them to certain industries or certain products that you're looking to protect domestic manufacturing in.

What we've never seen before, seen very rarely in history is just a blanket tariff and obviously the landscape is changing quickly. In that implication, then the goods of all across industries goes up, and then you have a much more muddled downstream effect as to why and what the tariffs will actually do when it comes to manufacturing, when it comes to domestic sales.

Sorry, long answer. It's a complicated subject, but at the end of the day, A tariff is something that when you order goods overseas that you have to pay to the [00:03:00] government to receive those goods. 

Kajal: And it's something we've seen before with the U. S. and China I think was the last major trade war. When that was happening

who were the winners? Who was losing? Who got impacted the most? 

John: Yeah. At the end of the day, putting once again, politics aside, in the economic theory of efficient production, it benefits everybody when there is trade. And I think across the board most people would agree with that, that if you could produce something at a lower cost somewhere else, In theory, that means that you can then produce the higher value goods domestically and not use your resources to produce those in other places.

So in, in a world of tariffs, at a theoretical level, everybody's a loser, right? The more friction, the more taxes that you add then Every, the your consumers are hurt because they pay [00:04:00] higher prices. Your workers are then producing lower value goods, so they get paid less.

So everybody is hurt. Now in the cases where terrorists are quote unquote needed, whereas there's unfair practices or, governments are acting, not in the best interest then sure, there might be reasons for terrorists, but, what we've seen Time and time again is tariffs are ideally short term tactical not even weapons but motivations for negotiation, right?

Last time we, we had this, we're trying to eventually, it was saber rattling, but at the end of the day. We got to a place where once again, trade could then flow more freely. Obviously, there continued to be IP issues and, other things that let's say the U. S. was concerned about, but, these things are a give and take and when used as a negotiating tool, you could argue they had been efficient in the [00:05:00] past.

Kajal: So that's enough talking about the bigger picture of tariffs, but I think that we should focus now on the application for e commerce business.

John: You can almost look at the tariffs as the analogy I would draw to it is the supply chain disruptions that we saw during COVID from China. When it became more difficult to get goods from China obviously, the cost of a container tripled during that time.

There's a lot of scarcity in the supply chain. So that disruption, what did that cause downstream? It caused a lot of outages. It caused a lot of manufacturing to be reshored, which means brought back to the U. S. And for e commerce, companies at the highest level. Tariffs are a reminder that having a very robust and diverse supply chain is the ideal state to be in, right?

Obviously, we know that's really hard and in a [00:06:00] shifting landscape and trying to manufacture different supply chains is difficult, but in an ideal world, it reminds us how important it is not to be single source when it comes to where you get your where you get your product, where you get your parts, those types of things, right?

It also, shifts the landscape very tangibly to, yeah, brands that source in the U. S. will have an advantage in a way that they didn't maybe, two months ago. So from that perspective, it does, allow you to evaluate your competition in terms of being able to predict what's going to happen to their prices just by knowing where they get their products, right?

I think one interesting knock on effect is when you look at FedEx or even Canadian Post, we've talked to a lot of our brands recently where There were complete outages in terms of shipping because of all this uncertainty. And that's [00:07:00] made people either now start to stock up again or people look for other manufacturing sources.

And I think that's a real reminder that You know, you've got to be really thoughtful about where you get your product and it's not always just about price because, just as we've been even talking, I'm sure the tariff conversation has shifted back and forth and who knows what the, the administration is thinking right now, we're at the end of the whip and we're just getting thrown around and everything you can do to insulate yourself is something you should probably be thinking about right now.

I think one thing I am most excited about, especially for our brands, as we talk to them is that, especially at the lower end of the market the opportunity to really compete on a more even playing field. has really presented itself, right? And that's a knock on effect of the tariffs, but more so in its application of existing tariffs, right?

With the de [00:08:00] minimis rule, which up until now product under 1800, sorry, 800, I believe because, it was a small amount, we're able to skirt by certain tariffs, right? So what did that mean? That meant, platforms like Timu, Sheen other, Shine? Sheen. Sheen. Sheen. Yeah. They were able to really and also, also brands that, that drop ship were able to get product.

in here at an artificially low price. And this is something, this is a loophole that many many administrations actually across the political spectrum had been concerned about. And I do think in, some thought about fairness that they had now closed this loophole. Which means that in, especially if you're a niche provider of some of these lower end goods, that you'll be able to compete more on branding, more on quality, more on some of these things, because price won't be as big of an [00:09:00] issue because, they won't be able to take advantage of that loophole.

I think it circles back to What we always talk about is for brands who are novel and innovative and thinking about how to take advantage of the landscape, even a turbulent environment like this presents opportunities, right? And I think, staying in tune with what's going on.

But at the same time running your business, right? What value you're providing, what products and who your customers are in a time like this. What we've seen in the past, advertising, like everyone's going to be scrambling because their businesses are disrupted to get new customers, right?

It's going to be, it's going to be a scramble, which is going to drive up costs, especially as we go into Superbowl and these other things. And so now is the time in this economic environment. to really focus on your, on retaining your existing [00:10:00] customers, right? To take advantage of the people who have brought you this far and to make sure that you're providing them even more value, right?

Because it's going to become increasingly ROI positive to retain your customers. Engage your existing traffic than it is to go out and find brand new traffic in a world where everybody's scrambling everybody's Sales projections have been turned upside down now is the time to really focus on your business and the customers that you know The best and that you are the best in the world at serving.

Kajal: What are the best ways to do that? 

John: You know we've talked about it in previous episodes, starting at the top of the funnel is really understanding who is coming to your product and why, making sure that you have the right data about who they are demographically, psychographically, but really, what their needs are and why they're coming to you in the first place.

And if you have a higher AOV product, if they're not [00:11:00] ready to buy today. To establish a relationship now, so that when they are ready, you're not scrambling to try and get your message in front of them for the first time, right? It's the right time to take a longer view of your customer relationships and to make sure that you are engaging and novel, and that you stand out because you think about in this list of advertising and phonetic e commerce.

activity to make sure that you are doing things that truly engage them, right? That, that truly provide an experience that they remember. So investing in your customer experience, investing in what that first experience is for people, investing in product education that's, what's going to pay off as the market becomes more competitive.

Kajal: And what about if people can't find another manufacturing source, so they do have to pay tariffs. And if prices do have to go up, what is the best way for brands [00:12:00] to negotiate that with customers without losing trust, without losing their customers, if prices do have to go up?

John: The good thing is, if there is a silver lining about this is that there has been so much press we're coming out or we're still in an inflationary period, but consumers, I think, for the most part, especially in this initial phase, understand that this is an external shock to your brand, right?

the more you can be upfront, transparent communicate with your client base and that this is why prices are going up. And to the extent that you can make the promise that when the tariffs inevitably recede, that you will bring prices back down. I think your true customers, I think are going to understand that.

But number two, it's also the impetus to provide additional value, right? Whether that mean [00:13:00] deeper guarantees more customer service, a better shopping experience, now is the time where you're going to have to add additional value, not just because of the tariffs, but also because of the competition.

If you think about everyone's going to be coming for your customers and your prices are going up, what are the things that you can do? You can really make sure that your product is the thing that, they have the most affinity towards, which is making sure that they have a customer experience that knocks their socks off, right?

They were, they're just like, they want to tell their friends about, wow, this is I went to the site, I, I did this thing, I learned this, wow, this was super cool. I bought it. I love it. That, that's, what's going to be valuable versus like pump and dump. I have a three XR row as, and, I'm just turning customers over as fast as I can, that I don't think that world is going to exist much longer.

Kajal: I know a lot of our customers have been talking about implementing loyalty [00:14:00] programs and then using Playably games to do I'd love to hear your opinions on how loyalty programs can be leveraged, especially for a brand that has never done them before. 

John: Yeah. What's really interesting if if you think about the last recessions or the last rising price environments, the one industry that has been there were two, we won't talk about the other one, but the one industry that is completely recession resilient is games, right?

In a time where, there's more uncertainty and those types of things, like people look to be entertained and and 

Kajal: escape a little 

John: and escape that's exactly the escape, right? From all the craziness of the current world that connection. Has, we have seen to be long lasting and enduring, right?

So when it comes to developing, I don't know, we don't like to think of loyalty programs for the sake of loyalty, right? If you think about your traditional I don't know, [00:15:00] grocery loyalty program, right? You only think about it when you're paying and you pull it out and you go, okay here's, scan my key card.

If you can provide a way for them to have fun, be entertained, get some value out of it, even when you're not selling them something, but only because they identify and like your brand, we think of that as true loyalty, right? So it's really, at Playably, the way we think about it is, how can we engage them on a level that is not only fun, but is tied to your brand in an authentic way?

We have brands where, hey, if they're providing barbecue being able to demonstrate, wow, you're a true aficionado of barbecue, or, hey, you actually know where all the different parts of the pig are, and you can construct it, right? You provide them the opportunity to have, Social standing probably a way to have achievement.

You have a variable reward. All these things are important to [00:16:00] people, especially in a time like this, and psychologically, not only aligns them with your brand, but gives them that warm fuzzy feeling where, wow, okay, this is the brand that I truly have fun with, I truly identify with. And to that we'd like to think of as organic loyalty, right?

Rather than trying to manufacture loyalty through, the 10 percent discount. And so from that perspective, I think it fits into our broader theme that now is the time to develop more authentic relationships with your customers. And that's by providing an experience that's not just transactional.

It's more where you can demonstrate the personality of your brand, where you can demonstrate, the ethos of your brand and why you started it and why you're different. Consumers love that. And then so the more we can tie the two of those together, the more you're going to find true fans for your brand that sustain you through tough times like this.

Kajal: What about subscription models? The [00:17:00] last time that there were tariffs coming in. Have we seen a lot more brands talking about that? 

John: Yeah. It's really interesting, right? We were talking to actually two brands this week where subscriptions are 25 to 40 percent of their business.

But not necessarily, and this is surprising to me the most profitable part of their business. So you would really think that. Because you don't need to re acquire those users again, every month that they become the most profitable part of their business, but where they are actually super valuable is word of mouth.

So subscription as a way to connect or bring your brand to the forefront on a continuous. Basis, we think it's incredibly powerful if your subscription product is very profitable even better right but if we if there's a way that you can bring [00:18:00] Consumers back, you know through an advent calendar or you know through some sort of Dave, they have the opportunity to not just learn, but talk about you, right?

So the greatest currency we've seen from our brands is how can we get, turn our brands into our ambassadors? And that once again, ties back to the experience, right? Subscriptions are great. Depends on the industry, depends on the economics behind it. But I think the underlying value of that.

Is engaging a big audience with your brand on a continuous basis in a positive manner. And that, that can be done in a lot of different ways. Subscription being one, but, we've seen our games bring people back in a way that. Is even more powerful because it's spreads word of mouth, both in person, but also online, through social media, a lot of these products when gamified become really viral.

Kajal: I love the idea of going more digital with your product. Being able to, get a taste of the product, get a [00:19:00] taste of the brand without having to necessarily rely on getting the product out would definitely help.

And I'd be remiss if we do not talk about segmentation, as we always talk about customer data and segmentation. When, testing out these different engagement practices, or even with, seeing who is most price sensitive and, how to use your engagement strategies accordingly what is the best way to do that?

We know that Pretty much everyone sucks at data. So you are the data guy. What are the best way for brands to use data in that way? 

John: Yeah we're talking, I know we were just chatting with Angelo earlier today, right? Like it, it's really interesting in that almost 90 percent of the brands we talked to never look at their data.

So almost like the basic starting point is just to have a couple metrics along those lines that you can start with, [00:20:00] right? And I think part of the issue is that segmentation is difficult to parse. To connect to your analytics, right? To connect to, does this population actually matter?

How we've chosen to try and solve that is to build segmentation directly into. into our games, right? So based on how you play the game, the questions you answer the demographics that we're able to infer about you, we then put those groups, put those people into a different group, right?

This might be Midwest moms who, have grown up kids. This might be, older women who, you know, who are empty nesters, we can put those groups automatically, let's say, into a clavio segment. And each of those segments can then get different flows that you can then compare that performance to your overall population, right?

And on average, we see when people use that type of segmentation that we provide [00:21:00] 30 to 40 percent increase, not just in click through rates, but in also in conversion, right? What does that mean? It's just personalization works, right? People like it when you know something about them, when you care about them more than just the straightforward transactional nature.

But then, hey, oh, we see you have grown up kids. Here is what we're thinking about, for this season because of X, Y, and Z, right? That's just a much more, I wouldn't just argue effective message, but. A connecting message that, you know, emotionally they I would want to receive. When it comes to the data piece of it, I would say, make sure your systems are as.

tuned and built from the ground up to provide that data to you, so you're not doing the work, right? What brand wants to construct a data lake and even knows what a CDP is and, wants to build these inference models and, what is an LLM? We built [00:22:00] it in the product so you can look at it in the dashboard very directly.

And I, I promise you just look at it once a week, then you'll have insights. We have CS who never looked at their data. They're looking at our dashboards. Now they get these insights and now they're asking us questions. Can you build into the Tinder game? Whether older women want bootcut jeans next season.

Our games, and I love to talk about this. Now, if you put out a survey, you have a 2 to 3 percent completion rate, right? Most videos, 8 to 12 percent completion rate if, If they even started games 90 to 95 percent completion rate, right? And because they're playing the game They're giving you their true answers Rather than trying to just you know, a answer a all the way across right?

They're actually trying to do something that reveals more about themselves So it's a great way to get true data about your users and we make it super easy to understand that data And to actually act upon it. 

Kajal: This has been an insightful conversation on [00:23:00] how tariffs and shifting Global trade policies are shaping the future of e commerce.

The end of the day, e commerce success isn't just about navigating all these trade policies, but staying resilient, adaptable, and focusing on delivering value to the customers. 

John: Yeah. There'll be some interesting opportunities ahead for everybody, I think. And it's up to all of us to make sure that, that we not only keep our heads above water, but are agile.

And as you were saying, Kajal, data driven. That's going to be, I guarantee you, that's going to be the difference between the winners and losers in this environment. 

Kajal: If you would like to be agile and add some deeper customer engagement to your e commerce site, you know where to find us playably.

ai. Happy to give a demo to anyone who wants to check it out. Why I frame a game up for them so that you can see what it looks like and how it would work on your site. And to our listeners, if you're an e commerce business owner, what strategies have you used to [00:24:00] manage the impacts of Paris, we'd love to know.

So if you found today's discussion valuable, don't forget to subscribe, leave a review and share. Thanks for tuning in. 

John: Thanks everybody.