As tariffs heat up, wellness retailer Apothékary is lowering prices

While many retailers are hiking prices to cope with tariffs and the end of de minimis, Apothékary is taking a contrarian route: thinking about lowering prices.

Shizu Okusa, founder and CEO of the Japanese-inspired wellness brand, told Retail Brew that she’s more concerned with “consumer perception and sentiment/fragility” than with passing costs along.

“We’re, frankly, absorbing a lot of the price impact that’s happening in our supply chain,” she said. “We’re not actually planning to raise any prices, but we are changing how we merchandise.”

The 5-year-old company, which generated $20 million in revenue by November 2024 and was on track to hit $35 million by early 2025, has leaned on bundling as its primary response to rising costs. When tariffs first hit, acquisition costs jumped 30% “overnight,” according to Okusa.

“It was pretty dramatic, and we actually ended up pulling back our marketing spend by 40% in July and August,” she said.

With a “new year, back-to-school” consumer mindset in September, Apothékary pivoted again, eliminating free shipping for orders under $99 as the brand was losing money every time someone bought a single product, Okusa said. The new threshold pushed shoppers toward buying at least three items, boosting average order value (AOV) without raising per-product prices.

“Customers weren’t net-paying more per product; they were actually paying less per product, because they were getting savings as a [result of buying more], but we were saving on both shipping costs and [being] able to pass that value downstream,” she said.

She added that since offering products in value sets and mini trios, the retailer has seen elevated interest from new customers on TikTok Shop first launched in August, with 90% of its new customers coming through the platform.

Okusa said she believes tariffs played a big role in pushing a lot of brands onto TikTok as “people were all trying to find ways to make money themselves, and becoming TikTok creators, so you saw this large shift of consumers spending more time on TikTok.”

But while bundling has proved invaluable for Apothékary, gifting is another incentive that has gone hand in hand for the brand in helping retain and acquire new customers.

“When you check out on our website…there’s various sorts of incentives to get a higher AOV, and the higher the AOV you actually unlock, you get free shipping,” Okusa said, adding that the second thing it unlocks is a free spoon.

“The free spoon is $10 in the customer’s mind, but for us, it costs us 50 cents, so we’re able to give that value to the customer,” she said, explaining that it accounts for $10 of an increase in the AOV that made up for the increase in tariff costs.

“We may actually end up being more profitable based on all the things that we’re doing,” Okusa said.