Key Takeaways:
- With the fortunes of different fashion categories diverging from the average industry outlook in early 2025, brand and retail organizations are pursuing a dual drive for innovation and reaching new demographics, at the same time as controlling costs and protecting margins.
- Fashion businesses of all shapes and sizes began the year by making proactive, informed investments in key technology pillars such as AI, sustainability solutions, and 3D, as well as essential tools to improve efficiency.
- While expectations for technology’s role in unlocking fashion’s top priorities for the year, and tackling the industry’s biggest challenges, are high, technology vendors have a clear mandate to develop deeper capabilities that are aligned with the objectives that real professionals have set for 2025 and beyond.
Towards the end of 2024, The Interline and MMGNET – the global fashion ecosystem behind landmark events like COTERIE, PROJECT, MAGIC, and SOURCING at MAGIC – asked more than 160 global fashion, footwear, and beauty professionals about their biggest challenges, key strategic objectives, and top technology priorities for the coming year.
Now, with the first quarter of 2025 already being shaped by the unexpected, we take a fresh look at the data behind the industry’s long-term bets, explore the surprising resilience of fashion in general, and examine how professionals’ biggest technology investments might play out over the rest of the year.
Well into the first quarter of 2025, the default advice for fashion professionals – whether they’re instrumental in running an established brand, working to start or scale a new one, or securing their place as a strategic supplier – is to expect the unexpected.
But fashion, on average, started 2025 on a stronger footing than the prevailing, pessimistic outlook might suggest; brands, retailers, and suppliers went into the new year with the legacies of disruption, uncertainty, and multi-dimensional, multi-national pressure fresh in their memories. To offset those risks, professionals surveyed across a broad spectrum of different roles entered 2025 with stability and profitability at the top of their strategic agendas, and with an optimistic for the role that innovation, new channels, and a suite of key technologies will play in meeting their ambitions.
As a case in point, looking back at 2024, overall category spending on fashion in the United States was down 3% on average, year-over-year, fuelled by more price-sensitive consumers putting value at the top of their pyramids of purchasing criteria, as demonstrated in research conducted for MMGNET’s 2024 Consumer Outlook Report, which showed both price and value for money as key priorities for a panel of more than 1,000 US shoppers. But at the same time holiday spending in the UK rose nearly 6% year-over-year (much of it concentrated on Black Friday and Cyber Monday) with shopping from mobile devices now accounting for a firm majority – 56% – of all sales, shaped to a good extent by the direct and indirect footprint of social selling.
A similar fork is visible between the fortunes of different fashion segments. In the luxury market, revenues from one of the sector’s giants were down 2% year-over-year, while a leading footwear and sports brand saw a 20% increase in sales for the whole of 2024.
The global perspective, then, is not the entire story. And for direct-to-consumer fashion brands and retailers, this split between a complex industry-wide outlook and category-specific tailwinds is behind a dual-pronged strategy: a drive for innovation and a push to meet new demographics, and an overriding ambition to do these things at the same time as keeping costs down and margins secure.
Focused reports produced by The Interline in 2024 – several of them supported by MMGNET – paint a cautiously optimistic outlook for the fashion technology sector. Despite sparking record share value losses in a single day last month, the general AI sector is still benchmarked at an all-time high early in 2025, and AI applications and services for fashion businesses continued to capture serious investment throughout 2024.
Similarly, platforms, services, and solutions that fall under the umbrella of “sustainability” are still important investment areas for companies preparing to feel the force of legislation. Even as generative AI pushes further into workflows for visualizing and marketing real products, the community and the ecosystem of tools for 3D and digital product creation continues to grow.
Wherever they stand along the spectrum of fashion, brands, retailers, and suppliers are not starting 2025 with a passive attitude – content to be buffeted about by economic headwinds. Instead, brands of all shapes and sizes, and the designers, engineers, and executives who make them run – are making proactive choices about what they want to accomplish this year, what they need to avoid, and how they intend to deepen their use of new tools and technologies.
In response, the fashion technology industry is, itself, entering 2025 preparing to meet the needs of brands, retailers, and their partners – and the massive diversity of job roles that exist within those organizations. Because as the data reveals, the adoption and day-to-day usage of technology across the fashion industry has steadily risen to the point where, going into 2025, more than 80% of all fashion professionals use industry-specific digital tools and solutions (excluding common productivity suites and office applications) at least once per week, close to 70% interact with those tools daily, and more than 60% receive data from colleagues and partners created using those tools.
This is a pronounced difference from how the fashion industry has historically framed technology in the past. In early 2025, technology deployment is no longer seen as something exclusively for innovation teams and experimental pilots, or for IT professionals and backend departments. Instead, there is now a universal sentiment (more than 90% of professionals agree) that technology is critical to the successful operation of any fashion business in 2025.
This optimism, though, is not blind. Just as fashion professionals are looking at the coming year from a pragmatic, practical viewpoint, their attitude to investing in technology is being similarly shaped by real, granular objectives.
More than 85% of fashion professionals believe that technology will play a role in overcoming their top business challenges for the rest of 2025, and the same amount believes that technology adoption will be critical for capitalizing on the key opportunities they have identified for the rest of the year.
And more specifically, 83% believe that AI (in both its generative form and longer-established applications) will deliver significant value for their businesses this year; 80% see technology making a measurable improvement to their ability to meet sustainability and corporate responsibility targets, and 90% believe that adopting or deepening their use of 3D and digital design-to-production workflows will help to position them to take advantage of not just new selling channels and engagement opportunities, but ways to measurably reduce costs, improve sell-through rates, and target top-line profitability.
The fashion industry is also, as we look to the rest of 2025, willing to invest in technology on this basis. Despite the assumption that a difficult climate will lead to pull-back on spending, the recognition of how vital technology has become is translating into the majority of fashion professionals planning to maintain or grow their investment in technology throughout the year.
This investment, though, is not open-ended; fashion companies, independent of company size or location, will be investing in solutions to these key challenges (and more):
- Securing profitability and growing margins. To offset the uncertainties surrounding supply chains, consumer spending patterns, trends, and commodity costs, brand and retail businesses will need to realize the maximum return on each product they bring to market.
- Accurately forecasting and responding to consumer demand. With costs high, timelines between design and production long, and consumer trends rising and falling more quickly than ever, fashion organizations need the utmost confidence in the market fit and sell-through potential of their styles.
- Complying with environmental and social governance requirements. Legislation may not yet be evenly distributed around the world, but reporting requirements like the CSRD (Corporate Sustainability Reporting Directive) in Europe and the UFLPA (Uyghur Forced Labor Prevention Act) in the USA are providing early evidence that enforceable regulations will quickly become the norm.
- Heading off instability and risk in global supply chains. Over decades of offshoring, expertise, capabilities, and manufacturing capacity have become heavily consolidated in a small number of specialized regions. With uncertainty swirling around trade policies and agreements, fashion companies are prioritizing agility, adaptability, and visibility as the foundations of new, diversified supply chains.
Industry professionals are also carefully mapping their technology investments to what they see as the key strategic objectives and opportunities that will shape the rest of the year. Despite being surrounded by disruption, the data tells us that fashion professionals are not looking at the rest of 2025 as a series of crises to be reacted to. Instead, they (and the organizations they work for) are looking to make careful, strategic bets on:
- Unlocking new frontiers and new possibilities, to continue the transition towards mobile and eCommerce.
- Improving customer acquisition, customer service, and engagement.
- Expanding into new markets and other new channels.
- Improving product quality and fit, in response to consumer demand for value for money, and the rising impact of returns.
If the technology sector is able to continue developing solutions to these challenges, then the likelihood is that the remainder of 2025 will see further technology adoption across this large possibility space. But that alignment between demand and supply, in technology terms, is by no means guaranteed, and technology vendors have a hill to climb in the next three quarters of the year; right now, only 40% of fashion professionals believe that the technology sector is actually responding to their evolving needs, and as 2025 develops those needs are likely to change even more.
In this sense, then, the fashion technology sector is still holding its breath, even if the industry at large has more reason for optimism. With the first quarter of 2025 being so heavily defined by uncertainty, the rest of the year will be shaped by how successfully the creators of technology are able to deliver on brands’, retailers’ and suppliers’ expectations.
As well as continuing to chart the evolution of the wider industry throughout 2025, The Interline and MMGNET will also be revisiting these expectations, and fashion’s progress towards its strategic goals, throughout the year – both in writing and in live sessions and discussions.
For detailed findings from the complete survey, perspectives from professionals across the product lifecycle, and deeper-dive analysis of the key data that’s shaping how the industry will develop over the rest of this year, download the “Fashion & Technology In 2025” direct from MMGNET