If you kept up with the fashion world in 2024, you already know that things weren’t exactly easy for retailers.
From waning consumer interest and sales numbers to battling legal issues, fashion brands were forced to work extra hard. However, just because 2024 was less than positive for the industry, it doesn’t mean retailers can’t prepare for a better 2025. With a little help from retail analysts and experts, we’re breaking down what fashion should prepare for in the new year.
Experiential economy for the win
You’ve probably heard a lot about how consumers increasingly value experiences, and this inclination is likely to remain true.
Nora Kleinewillinghoefer, partner and North America lead for fashion and luxury at Kearney’s Consumer practice, told Retail Brew that wellness has been a huge priority for customers across the luxury sector, “paving the way for brands to innovate and grow in the hotel, spa, and health-related services spaces in 2025.”
Matthew Katz, managing partner of global consulting firm SSA & Company, agreed, adding that “as consumers may be shifting their spending from gifts back toward experiences, brands that capitalize on this trend—with curated travel accessories, experiential gifts, or offerings that prioritize moments over material items—will do better.”
It’s also important to remember that “experience” is at the core of the word “experiential,” which goes beyond hiring attentive sales staff or staging innovative pop-ups. Think personalization and tailored experiences. As Brittany Steiger, principal analyst of retail and e-commerce at Mintel, told Retail Brew, “66% of adults prefer shopping experiences customized to their tastes.” Steiger added that emotional connections will also be invaluable to “build loyalty and help consumers express themselves.”
Gear up
Things were less than perfect last year for even the biggest luxury conglomerates, such as Kering, Burberry, and Tom Ford, primarily due to rising costs and a dip in spending. Unfortunately, some challenges are likely to persist into the new year.“In the coming year, the global luxury market should brace for high inflation, increased challenges in the US and China, and further cooling, with only moderate growth in select markets,” Kleinewillinghoefer said. “While in the US, potential volatility under a Trump 2.0 administration threatens the market. China’s luxury growth will suffer under continued economic uncertainty and changing consumer behavior. Closer to home in luxury, discerning consumers are demanding greater value as prices hit historic highs.”
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Katz echoed those sentiments and said potential tariffs and inflation are likely to be the biggest challenge for brands in 2025. “Pricing, availability, and quality will also be thrown into flux, leading to higher costs, scarcity, and ultimately higher consumer prices,” he said.
Innovative pricing will lead the way
They say tough times build tough brands…or something like that. Well, brands that hope to withstand this year’s challenges, will need to focus on “smarter pricing and inventory management,” according to Katz. “Any brands that want to thrive in the coming year should focus on innovative pricing and promotions, agile merchandising, and—always—adapting to changing consumer priorities,” he said.
Mintel’s Steiger agreed, saying consumers recovering from inflation are likely to veer toward “brands that prioritize affordability and value.”
“Value-driven retailers such as mass merchandisers and discount outlets are well positioned to meet these needs, while luxury brands and department stores may continue to face headwinds,” she said.