Nearly every industry is being affected by the current upheaval in global trade — and fashion is no exception. In fact, according to a recent report from Computer Generated Solutions, Inc. (CGS), the past decade has seen “seismic shifts” in tech and sourcing strategies for fashion and apparel brands.
Top Priorities for 2025
In a March 13 announcement about the release of its 10th annual BlueCherry State of Supply Chain & Technology Report, CGS said the new report provides a “decade-long analysis of trends, challenges, and opportunities in the fashion supply chain landscape.”
Describing itself as a “leading global provider of supply chain management software solutions for fashion businesses through its BlueCherry® platform,” CGS said the analysis also revealed that “cultivating AI-driven insights and optimizing merchandise demand planning” are “top technology priorities” for companies in 2025.
The new report was based on a November/December 2024 market survey of more than 300 executives across the global apparel, footwear, accessories, consumer lifestyle goods, retail, and manufacturing industries and revealed priorities in the industry have “dramatically changed” over the past ten years — a period characterized by “shifting technologies, consumer behaviors, and trade environments.”
Top 2025 priorities revealed in the report include:
- AI and advanced analytics: Data-driven decision-making has been a “high priority over the past 10 years and is now a must-have capability in 2025” with 91% of businesses viewing AI-driven insights as “critical to growth.”
- Merchandise demand planning: 77% of respondents said “implementing demand planning technology solutions” is a top priority, which CGS said is the highest in four years. “This is due, in part, to objectives for mitigating unforeseen supply chain disruptions.”
- Nearshoring and reshoring: 45% of businesses are “prioritizing nearshoring/reshoring, up significantly from a 14% average over the past four years.”
- Top growth strategies remain unchanged: “Although the past 10 years have seen dramatic economic, social and consumer behavior changes, prioritizing new customer acquisition, ecommerce and deploying digital process improvements have each been constant priorities.”
In addition to key priorities for 2025, the BlueCherry report also underscored two top issues that are concerns for the industry this year:
- Economic and political uncertainty: 76% of industry leaders cited “economic and political uncertainty as a serious or moderate challenge,” which is a jump from 68% in 2024. For context, in 2020, only 6% viewed trade policies (including tariffs) as a “major risk.”
- Supply chain visibility: Although “overall confidence” in supply chains remains “steady,” a whopping 85% of respondents consider visibility a “key area for improvement.”
“Our annual State of Supply Chain & Technology Report has helped fashion and apparel brands navigate a decade dominated by tech-driven disruption,” said Paul Magel, President, Business Applications and Technology Outsourcing Division at CGS. “Our findings underscore the importance of better demand planning and access to AI-driven insights for smarter, faster decision-making. …”
The full BlueCherry State of Supply Chain & Technology Report is available for download here.
“Challenges at every turn”
In November 2024, global consulting firm McKinsey released the findings of its report, which also revealed a complex global landscape.
According to The State of Fashion 2025: Challenges at every turn, the fashion industry faces strong headwinds this year due to “economic uncertainty, a dynamic market, and consumer behavior shifts.”
“Although hard to predict, even in the best of times, the fashion industry is in for a particularly tumultuous and uncertain 2025,” McKinsey said, citing a “long-feared cyclical slowdown” and inflation-induced price sensitivity on the part of consumers. Additional factors cited include the:
- “surprising rise of dupes”
- “acceleration of climate change”
- “continued reshuffling of global trade”
- deepening of “regional differences”
“In short, the negative environment predicted by many in the fashion industry this time a year ago has now materialized,” McKinsey said. “There is still growth to be found, but economic uncertainty, geographic disparities, as well as shifting customer behavior and preferences mean seizing it will require navigating a maze of compounding challenges at every turn. Consequently, 2025 is likely to be a time of reckoning for many brands.”
Among the fashion leaders polled about anticipated consumer sentiment for the annual “BoF–McKinsey State of Fashion Executive Survey,” only 20% said they expect to see improvements in 2025 and 39% see “industry conditions worsening.”
Underscoring “historic shifts” in the “geographic drivers of revenue and economic profit,” McKinsey said the industry will benefit from evolving dynamics in three regions of the world:
- “Falling inflation and increased tourism in Europe”
- “The resilience of high-net-worth individuals in the United States”
- “New growth engines in Asia”
Regarding the last, the firm said that although China will remain the “center of gravity” for the region, brands will also look to other Asian markets — particularly Japan, Korea, and India.
For additional details , please see the full report.
A “world of flux” for the fashion industry
In a recent episode of The McKinsey Podcast, McKinsey Senior Partner Gemma D’Auria spoke with Global Editorial Director Lucia Rahilly about the firm’s State of Fashion report.
Referencing the report’s findings, D’Auria underscored the balance between risk and reward in the current environment: “Yes, there are risks, but there are also opportunities to be captured.”
Regarding the state of fashion, she said 2025 will be a “very challenging year.”
Noting the report’s focus on Europe, the U.S., and China, D’Auria said although consumer confidence is “quite low” in Europe and “extremely low” in China, there is an “appetite to spend” in certain areas of the world, “particularly on goods.”
She also said consumers are much more focused on value.
“What we mean by value is not just price but also perceived value for what they’re paying,” D’Auria explained. “This is already having an impact. For example, in the US, one of three consumers we surveyed has purchased a dupe in the last 12 months.”
Describing a dupe as an “extremely well-made look-alike of a luxury product,” she said many are “extremely well made” and consumers are “wearing them with pride” since they feel they’ve made a “smart choice, not the cheap choice.”
Another dynamic at play is the growth in resale platforms.
“People are much more willing to purchase preloved goods than they’ve ever been,” D’Auria said. “The narrative on preloved can be quite compelling, as is finding products that are no longer on the shelves or in a boutique.”
In addition to other topics, D’Auria underscored discovery as “one of the key consumer behaviors to watch for in 2025.”
“In a world where about 70 percent of transactions and purchases are digitally influenced, we now see a proliferation of technology and AI-powered tools to help consumers quickly find what they’re looking for, and to get a recommendation that’s more precise because it’s not just about speed,” she explained. “It’s about, ‘Do you really understand what I’m looking for? And are you going to be able to offer a product I need and want?’”
Noting that some companies have been investing deeply in advanced analytics to better predict consumer needs, D’Auria said there’s an “opportunity for further personalization and customization.”
She emphasized that “in a slowing market where many brands are looking to gain share, this will be an important differentiator.”
Additional topics covered in the discussion include:
- Finding growth in a sluggish market
- The difference AI makes
- Stores? Again?
- Knowing your audience
- Preparing for the unpredictable
- Sustainability in the current climate
For additional details, please check out the full podcast.
