Pricefx Experts Predict a Volatile 2025 as Companies Face New Pricing Challenges

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MUNICH & CHICAGO--(BUSINESS WIRE)--Jan 15, 2025--

Economic uncertainty, shifting consumer behavior, and evolving market pressures will pose significant challenges to companies’ pricing strategies in 2025, according to experts at Pricefx, the global leader in AI-powered pricing software. The unpredictability of market conditions will demand pricing agility and advanced tools to manage margins, maintain compliance, and sustain competitiveness.

Financial and business markets will become more predictable in 2025. For commodity markets, this means previous levels of overcapacity and margin weakness bottoms out and sustained levels of modest growth return. Higher feedstock and energy costs will persist in European markets but will also moderate. Increased competition from China and lower-cost producers will continue but will be moderated by tariff policies which could result in inflation but more likely in a leveling out of cost increase and sustained slightly elevated interest rates.

“Although there will be a mixed bag of good and bad news and not everyone will be happy with U.S. government policies, it will be easier to predict and address market trends, supply, and demand in the next 18 months versus the previous 18 months,” said Garth Hoff, Director of Industry Strategy at Pricefx. “This does not mean there will not be significant spikes and dips. Volatility is still a part of life in 2025 and pricing systems and processes are needed to manage margin in a still very choppy but more balanced overall economy.”

Inflationary pressures and shifts in consumer purchasing power will add another layer of complexity.

“In industries where companies have taken large increases in price and have seen declines in volume will be forced to reduce list prices or discount more often,” explained Gabriel Smith, Chief Evangelist at Pricefx. “Companies must determine updated elasticity in the post ‘new normal’ world, where inflationary pressure has subsided, but prices remain high across many categories and consumer purchasing power has been diminished.”

Fluctuating duties and tariffs, shifting market dynamics, and broader economic changes will put pressure on pricing strategies across industries. Businesses that rely on outdated systems or manual processes risk falling behind as they struggle to adapt. On the other hand, companies that invest in agile pricing systems and AI-driven tools will be better equipped to stay competitive in a challenging and volatile environment.

“History does not repeat, but it rhymes. In 2025, companies should expect to see a level of unpredictability for tariffs and duties that will stretch and strain the ability of manufacturing companies to address them in a timely manner,” said Hoff. “Regulatory compliance, and more importantly, margin compression avoidance will be a fact of life that pricing organizations will need to address or risk decreased profitability.”

Beyond adapting to changing trade policies, businesses will face increased difficulty maintaining customer trust and profitability in a competitive marketplace.

Michelle Duffy, Distribution Industry Advisor at Pricefx, added, “With the drastic tariff increases that are proposed, it will be difficult for companies to roll those fees into resale and still remain competitive. To enhance transparency, distributors may start showing tariff surcharges as separate line items in quotes and invoices, rather than burying them in product costs. This approach gives customers visibility into the exact impact of tariffs on prices, making it easier for both parties to adjust to changes. As tariffs change, this transparency helps customers see that any price adjustments are directly related to external costs rather than supplier margin increases, fostering greater trust and customer retention.”

Additionally, Duffy expects that value-based pricing will gain traction in 2025. Distributors and manufacturers are slowly shifting away from purely cost-plus pricing models toward value-based approaches, aligning prices with customer perception of value. This strategy requires businesses to better understand customer segments and tailor pricing accordingly, creating opportunities to maintain competitiveness without sacrificing profitability.

Suzanne Valentine, Director of Pricing AI at Pricefx, believes that AI-driven pricing will become essential and the adoption of AI-driven pricing strategies will see a significant increase in 2025. Companies will increasingly rely on pricing AI tools to manage the complexity of volatile tariffs, duties, and market conditions. Predictive and prescriptive analytics will allow businesses to stay ahead of shifts in customer behavior, competitor pricing, and economic indicators. There will be renewed focus on the data foundation, encompassing both internal and external data indicators that impact pricing. This new wave of pricing AI will not only enhance margin optimization but also enable companies to make swift pricing changes in response to the evolving trade landscape.

“We’re entering a phase where AI will stop being an abstract concept and become an essential tool for pricing professionals,” said Valentine. “AI will help businesses navigate not only tariff changes but also broader market dynamics, ensuring that organizations can adjust their pricing strategies dynamically and remain profitable.”

Pricing experts will become increasingly comfortable working with a “pricing analyst copilot.” Early adopters will embrace this technology and integrate these accelerated insights into their workflow while providing feedback to the copilot that expands and improves its helpfulness to the business.

AI-powered pricing analytics will tie opportunity identification, quantification and corrective actions into a natural language interface, and extend to other use cases like coaching sales on how to handle objections and defend value. This development will be critical because it will allow accelerated adoption of complex tools to a new generation of users, it will produce faster results, and it will do all of this with fewer resources while generating increased profitability.

The volatile nature of global trade and evolving economic conditions will make pricing agility a cornerstone of success in 2025. Companies must invest in technology, including pricing AI, to effectively navigate these challenges. With the right tools and strategies, businesses can manage margin pressures, remain competitive, and ultimately thrive in an increasingly complex pricing environment.

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About Pricefx

Pricefx is the global leader in AI SaaS pricing software, offering an end-to-end platform solution that is fast to implement, flexible to configure, and friendly to learn and use. Since pioneering cloud-native pricing technology more than a decade ago, its leading AI price optimization and management capabilities deliver the industry’s fastest time-to-value with activation in 6 months or less and the industry’s highest average ROI of 7,000% in the first 12 months from activation. Pricefx’s award-winning solution is focused on productized industry use cases proven to solve the most common and complex pricing challenges for large enterprise B2B companies in manufacturing, distribution, process engineering, and select other verticals. It is the leading AI price optimization and management platform that enterprises rely on to dynamically Plan, Price, and Profit. Pricefx’s business model is entirely based on fairness, and the satisfaction and loyalty of their customers is recognized by years of leading rankings among customer review forums. For more information, please visit www.pricefx.com.

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PUB: 01/15/2025 09:30 AM/DISC: 01/15/2025 09:29 AM

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