By Kam Johal, Consultant, Columbus Consulting
The Business of Fashion (BOF) recently partnered on a retail survey about the state of fashion in 2025. The findings elevated a shift in concerns among brands and raised a discussion on what the industry needs to focus on next year. Overall, revenue is predicted to be a continuation of low single digit growth with only 20% of BOF survey responders expecting improvements in global consumer sentiment. While the global economy is seeing falling inflation rates, the focus remains on the geopolitical environment and climate implications. These trends are encouraging businesses to look to micro markets and operational efficiencies to deliver profit goals. Two main areas of focus will be on AI-powered optimisation and shifts in global trading to generate nearshoring and supply chain alignment with geopolitically aligned countries.
Additional trends include:
SILVER SPENDERS
The aging demographics look to enhance their leisure and experiences over acquiring products and increasing consumption. Retailers need to be looking at their physical environments and customer services to create spaces of convenience and destination worthy of this segment’s time and investment.
VALUE SHIFT
Luxury has long been the saving segment for retail and brands to continue to drive spend as the upper classes have been more immune to rising costs and competing expenses. This is expected to shift to non- luxury/value brands (think Primark). Vintage and pre-owned is growing as a category and is also an indicator of the value equation consumers are applying to certain items (like special occasion dressing). Luxury brands, specifically, need to be mindful of the aspirational consumer who may be less motivated to buy new and direct—impacting their market acquisition and growth.
BALANCING PROFIT AND GROWTH
Sales growth has most readily been achieved by channel/store expansion and brand acquisition. This approach has become greatly challenged with unified commerce complexities, fragmented audiences and margin impact. Brands now need to review their organisation, embrace AI for optimisation and scalability and streamline their product development and lifecycle through end of life. Often, the reduction in a brand’s footprint is due to underperformance over reduced demand; both of which require retailers to look at processes, structures and resource capabilities. Innovative ways to serve a market at lower overhead levels are driving shop-in-shop experiences, highly engaging digital experiences and social commerce.
PERPETUAL EVOLUTION AND GLOBAL MARKETS
The one consistent trend in retail is change. Brands need to continually monitor shopping behaviours and geo/economic indicators to best adapt and serve their customers. What was a priority pre/during/post COVID is no longer relevant in today’s polarised political world. The pandemic unified the global industry in many ways, but now the focus is on local management, shopper segmentation, advanced technological enhancements, and responsible sourcing. The recent concerns around leadership changes, tariff threats and even forthcoming product passport mandates are all contributing to a new phase in retail.
Brands should be evaluating their roadmaps, ensuring their systems are scalable and adaptable, verifying that they have the right talent in the right positions and that they are nimble and agile. 2025 will be a year of re-evaluation around sourcing and supply chains as well. The industry is looking to alternative partners in Japan, Korea and India in an effort to become less reliant on China. They are also looking to reduce transport distances and continue to be attentive to carbon emissions/sustainability practices to be responsible to both the climate and their bottom lines.
ABOUT KAM JOHAL
Kam is a global consultant for Columbus Consulting based in London and serving the EMEA market. She is a leading project and change management expert with experience working for such brands as Mother Care, ASDA and C&A. Kam is a highly respected business development executive, overseeing international business expansion and brand development.
ABOUT COLUMBUS CONSULTING
Columbus Consulting delivers solutions that drive true value and have been transforming the retail, grocery and CPG industries for over two decades. We are a retail consulting company of industry experts. Our approach is simple, if you do it, we do it. We are more than consultants; we are experienced practitioners who actually sat in our clients’ seats. We understand the challenges, know what questions to ask and deliver the right solutions. Columbus offers a unique, consumer-centric approach with an end-to-end perspective that bridges functional & organization silos from strategy to execution. Our specialties include: unified commerce, merchandising & category management, planning & inventory management, sourcing & supply chain, data & analytics, accounting, finance & operations, people & organization and information technology. Let us know how we can help you. To learn more, visit COLUMBUSCONSULTING.COM.
