What: Fashion brands are navigating trade disruptions, AI-driven transformation, and evolving consumer demands for value and sustainability.

Why it is important:  These shifts mirror recent industry trends, with tariffs, AI, and resale strategies fundamentally altering retail business models.

The State of Fashion 2026 report highlights how fashion brands are contending with a rapidly changing landscape defined by trade disruptions, technological advancements, and shifting consumer expectations. US tariffs have forced companies to rethink sourcing and pricing strategies, while supply chain disruptions and rising costs are prompting a renewed focus on efficiency and sustainability. Artificial intelligence has moved from being a competitive advantage to a business necessity, driving workforce transformation and requiring brands to upskill employees and attract new talent. As AI reshapes both internal operations and the customer journey, brands must adapt their digital marketing and e-commerce infrastructures to remain visible and relevant. Consumer behaviour is also evolving, with a growing emphasis on value, wellbeing, and self-expression, fueling the rise of categories like jewellery and smart eyewear. The mainstream adoption of resale and secondhand fashion reflects broader economic and environmental concerns, pushing brands to develop new business models. In this challenging environment, only agile companies capable of responding to these systemic shifts will secure growth and market share. 

IADS Notes: The State of Fashion 2026’s themes are reinforced by recent industry developments. In March 2025, the impact of US tariffs led to major supply chain restructuring and operational changes for brands, while sustainability commitments faced new pressures (“How a global trade war could rewire the way fashion operates,” Vogue Business, March 2025; “As tariffs cause chaos across fashion’s supply chain, what happens to sustainability?” Vogue Business, March 2025). AI’s rapid integration into retail, highlighted in September and March 2025, has driven measurable gains in productivity and customer service, though workforce readiness remains a concern (“AI is moving faster than your workforce strategy. Are you ready?” BCG, September 2025; “Redefining productivity in retail,” Forbes, March 2025). Shifting consumer priorities toward value, personalization, and sustainability, as seen in late 2024 and September 2025, are accelerating the adoption of resale and secondhand strategies, with notable growth in these segments throughout 2024 and 2025 (“Gen Zs want ‘chaotic customisation’ in 2025. How can brands tap in?” Vogue Business, November 2024; “The business of second-hand clothing is booming,” The Economist, March 2025).

BoF’s State of Fashion 2026: US tariffs, AI adoption, and shifting consumer values