As consumer confidence continues to decline, fashion brands are facing a shopper who is more wary and price-conscious.
No longer are consumers buying on impulse or sticking with familiar brands — they are researching more carefully to make purchase decisions. Yet despite these and other macro political and economic challenges the industry faces, there is still growth to be unlocked.
In a new WWD x BCG Future of Fashion Report, released at the WWD Apparel and Retail CEO Summit on Tuesday, the report gives a deep dive into the data behind this consumer behavior shift and how brands can rise to the challenge and be poised to take on what lies ahead.
The study was based on BCG surveys of more than 4,000 consumers exploring spending priorities, shopper behavior and brand engagement within the fashion and luxury sectors, analyzing nine million social media posts and 10 in-depth one-on-one interviews with top industry leaders, including Joe Preston, president and chief executive officer of New Balance; Mark Breitbard, president and CEO of Gap brand, and Michael Kliger, CEO of LuxExperience.
The report identified three key insights and major takeaways for how brands are continuing to connect with consumers during a period of uncertainty.
Here is a three-part breakdown of what is driving fashion and luxury consumers’ preferences.
Quality Remains Top of Mind for Fashion Consumers
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With more discernment used for spending, consumers are looking for quality, style and value when making purchases. More than half of consumers surveyed, 53 percent, reported that “quality for the price” was the biggest driver of value. Thus consumers continue to seek out brands they trust for the best price.
Moreover, with the rise of GLP-1 usage and overall wellness focus, lifestyle spending for wellness, fitness and sports has grown as a natural expansion for fashion brands. Moreover, connecting products, services, experiences and communities allows consumers to experience the brand in new ways.
The report noted that, “In a world focused on AI and digital, finding ways to communicate fit and craftsmanship is increasingly important.” What will set brands apart in this new landscape is assessing the role they play within a consumer’s routine, not simply relying on their attraction.
Younger Consumer Look for Cultural Relevance
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With nearly half of consumers (46 percent) considering cultural relevance as an important factor in decision-making, 60 percent also said they’d pay more for products that are perceived as “original and innovative.”
Consumers continue to seek out cultural relevance, especially within younger generations — who are 10 points more likely than the average consumer to note it as an important factor for a brand choice. Cultural leadership has become a prerequisite rather than a differentiator.
There’s also been a notable shift in sports’ relationship to apparel — 77 percent of survey respondents said sports and its culture influenced their fashion decisions. Sixty-six percent of consumers see fashion brands as having a natural role in major sporting events and 61 percent said they’re more likely to purchase from a brand that activates around sports.
Human Creativity Is Still Valuable
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Consumers are the best informed they’ve ever been; 91 percent of them said they actively research their fashion choices before making purchases.
As AI usage has become a default for brands within the consumer shopping journey, shoppers are using it to discover brands and products and inform purchase decisions. But adoption has become a polarizing decision, with a deep split between those who are enthusiastic and those who are skeptics — both have vastly different expectations when it comes to the shopping experience and how brands should use AI.
While 73 percent of consumers said they would use AI tools to help narrow product choices or value for money, 51 percent of users said they would rather research products themselves than use AI. In the same vein of consumer AI skepticism, 47 percent said they would be more likely to purchase from brands that commit to using only human-created creative content and 91 percent of consumers said they have concerns about AI-assisted shopping, indicating that consumer trust has yet to catch up with brands’ widespread implementation.
To read the full report: CLICK HERE.
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