Pulled-forward spending is real–here’s how to avoid the post-spike slump

Q1 2025 saw a 5.5% year-over-year spike in consumption, driven largely by durable goods. But that surge—fueled by tariff fears—is now creating a phenomenon of pulled-forward spending. Morgan Stanley projects consumption growth to slow to just 3.7% by year-end, and further to 2.9% in 2026.

Their latest report also warns of a sharp Q4 slowdown, especially in goods categories like apparel and household items, as consumers pull back after stockpiling earlier in the year.

For brands, this could mean changes to how you engage your customers, your CX forecasts, and how your team operates.

This climate calls for some new CX strategies. And by leveraging AI-powered retention, customer engagement optimization, and demand forecasting CX, B2C companies can build lasting loyalty, optimize the customer lifecycle, and turn every conversation into a revenue opportunity.

What is pulled-forward spending?

The pulled-forward effect happens when consumers accelerate purchases ahead of anticipated price increases or shortages, creating a temporary demand spike followed by a lull. We’re experiencing a major one right now. Here’s what causing it:

• Tariff-driven stockpiling: Consumers bought more durable and non-perishable goods before tariffs raised prices.

• Labor market uncertainty: Slowing wage growth and net immigration led to increased precautionary savings.

• Policy and economic volatility: Uncertainty about tariffs and equity markets prompted consumers to spend now and save later.

BLOG

Why a customer loyalty mindset is the secret to long-term success

Read now

How does it affect B2C companies?

What you’re probably already feeling is a slew of changes: expensive import taxes on goods, dips in inventory, strained relationships with overseas suppliers, and vacillating customer buying behavior as a result of the pulled-forward effect. With all these unprecedented challenges now in play, it can make it hard to stay successful, not just afloat. Here are a few ways it can show up in today’s uncertain markets:

• Decreased future demand: After the Q1 surge, consumers are expected to sit out future purchases, especially in goods categories.

• Shift in spending mix: Goods will be hit harder than services, with durable goods particularly vulnerable.

• Tariff-induced price elasticity: Higher prices may not be offset by volume, risking lower sales.

• K-shaped recovery: Upper-income households may continue spending, but middle and lower-income consumers are scaling back, making retention more challenging over the long term.

Ultimately, however, success in this market comes down to customer retention strategies. But the “tried and true” tactics you’re used to won’t work here. This type of pulled-forward spending will require a CX overhaul that centers the customer, engages them post-purchase, and proactively uses AI to make internal processes more efficient and external ones more personalized for your shoppers.

Why old retention strategies may fall short

In a post-spike environment, you might look to cost-cutting measures, deflection techniques, and reactive approaches for your customer experience planning. That could show up like replacing agents with AI no matter the complexity of the issue, directing customers to unhelpful FAQs and long wait times, and trying to regain customers who have already been lost with rewards and loyalty programs after the fact.

None of that works.

Those tactics create fragmented experiences where siloed communication channels and lack of customer context lead to impersonal service. Add the use of generic, one-size-fits-all loyalty programs and reactive engagement that spur brands to respond after churn has already happened and it’s no wonder that CX teams can’t keep up scale or adapt quickly enough to changing market dynamics.

Morgan Stanley’s analysis is clear—brands that fail to modernize their retention strategies face higher churn and greater risk during periods of demand contraction.

Supercharge your growth by empowering agents

Learn more

Uncompromising AI insulates you from Q4/Q1 purchase declines

As consumers pull spending forward to beat tariffs and rising prices, brands face softer demand and greater customer caution. AI woven throughout the CX journey helps you adapt—anticipating needs and personalizing experiences to keep customers engaged, even as spending slows.

Turn CX into a revenue driver…for real

In a cautious spending environment, every customer question is a potential sales opportunity. It’s time to transform your support team from a cost center to a revenue engine. Sidekick Sales makes that possible. It provides personalized, dynamic shopping assistance to consumers directly within digital channels. Powered by AI, it uses a shopper’s history, preferences, and behavior to deliver real-time guidance that improves conversion and increases order value. Use it to:

• Provide personalized product recommendations and build purchase confidence in real time.

• Equip agents with complete customer context, purchase history, and preferences.

• Answer routine questions instantly and escalate high-value interactions to human agents.

Predictive AI for tariff-proof customer experience

The economy is making consumers wary of when to spend and how much money to part with. But predictive AI can help your team smooth out demand dips caused by economic uncertainty. Use it to maintain engagement during volatile periods when customers might otherwise disengages:

• Identify at-risk customers before they leave.

• Test multiple pricing scenarios quickly to find the optimal balance between margin and customer retention.

• Analyze customer sentiment around price increases and adapt communication strategies accordingly.

• Preserve loyalty and NPS scores even as costs rise.

Agent + AI collaboration

B2C brands deliver higher satisfaction scores and more meaningful customer relationships when their agents are supported, especially during unpredictable market conditions.

• AI handles routine inquiries and automates workflows.

• Human agents focus on complex, high-value interactions.

• Gladly Sidekick provides agents with real-time recommendations, summaries, and translation tools.

Customer loyalty builds B2C success

Brands must move from transactional thinking to a customer loyalty mindset. Data shows that loyal customers are:

• 6x more likely to buy again from the same brand.

• 6x more likely to buy a new offering from a favorite brand.

• 6x more likely to recommend their favorite brands to others.

• 6x more likely to resist a competitor's offer for similar products.

By empowering agents with the right tools and context, Gladly enables “white-glove” service at scale, driving up to 20% revenue growth for brands that embrace this mindset.

This people-first approach, where both customers and agents are treated as individuals, lays the groundwork for sustainable, long-term relationships and business success.

From survival to strategic advantage

The pulled-forward spending phenomenon is a stress test for every B2C brand’s customer-centric infrastructure. You’ll have to build an architecture of resilience, combining predictive analytics, AI-powered engagement, and human empathy to not only survive the post-spike slump, but emerge stronger.

That means leaning into new approaches and getting more out of your CX team. By treating every inquiry as a revenue opportunity, your B2C brand can capture sales at the moment of highest intent, provide instant product information, personalize recommendations, and ensure seamless handoffs from AI to human agents for high-value interactions—turning your support team into a revenue engine and supporting the metrics and goals of your sales and marketing teams.

Ready to transform your support strategy and avoid the post-spike slump? Discover how Gladly Customer AI can help your brand thrive in the new era of customer experience.

DEMO

Revolutionize your CX with Gladly Sidekick

Get a demo