8 Trends to Watch in 2026…
8 Trends to Watch in 2026…
1. Macro Environment: Tariff Turbulence US tariffs have rewritten global sourcing. Average duties on apparel/footwear spiked from 13% → 54% → settling at 36% (still extremely high). 76% of executives say tariffs and trade disruptions will define 2026. Imports from China down 30% since 2019; Cambodia up 42%. Tariffs have added $27B in additional duties on apparel/footwear. Brands are responding by: Raising prices (55% plan increases) Reducing SKUs Shifting sourcing to FTA countries Renegotiating with suppliers Streamlining logistics, consolidating shipments Suppliers are: Shifting capacity to new regions (e.g., Kenya, Ethiopia) Investing in lean, automation, digitalisation Pressured to absorb part of tariff costs Winner profile: companies with strong brand equity, diversified sourcing, and flexible supply chains.
2. Workforce Rewired: AI as a Structural Shift AI is no longer experimental—it’s reshaping how fashion companies operate. By 2030, 30% of employee time in the US/EU could be automated. 92% of companies plan to increase AI investment, but only 1% have “mature” deployment. Up to 40% of retail/fashion workers will need reskilling. Greatest automation impact: Back office, logistics, warehousing Customer service Merchandising and demand forecasting Marketing content production Shift: fashion jobs will skew toward creative, analytical, and supervisory tasks, with AI handling repetitive work.
3. The AI Shopper: The New Discovery Engine AI is transforming how consumers shop and discover products. 53% of US consumers using AI search also use it for shopping. Large language models are becoming the new SEO—brands must optimize product data for AI agents. Semantically rich data, structured product catalogs, and API access will determine visibility in AI shopping flows. Agentic AI will soon: Compare prices Build outfits Monitor trends Make autonomous purchases on behalf of users Implication: digital marketing and e-commerce infrastructures must be rebuilt for AI-driven discovery.
4. The Wellbeing Era With luxury prices increasing, consumers shift more spending toward wellness and identity-driven experiences. 84% of US consumers and 94% of Chinese consumers prioritize wellbeing. Consumers want: Emotional connection Brands aligned with personal identity Community-based or “third space” experiences Opportunity: embeds wellbeing across brand, product, and customer experience—not just as a sub-category.
5. Efficiency Unlocked Efficiency becomes the biggest internal focus of 2026. Scale and low-cost sourcing are no longer enough. Brands must use AI, automation, and digital tools to: Reduce inventory Improve forecasting Lower operational costs Improve margin productivity Efficiency unlocks capital that can be reinvested into product quality, creativity, and brand differentiation.
6. Resale Sprint Secondhand is growing 2–3x faster than primary retail. Driven by: Value-seeking behavior Sustainability mindset Better tech and logistics for resale Brands need proprietary resale strategies—not just partnerships—to capture margin and reduce waste.
7. The Elevation Game Mid-market brands are moving upmarket due to: Tariff pressure Rising costs Desire to stand apart from ultra-fast-fashion Success requires: Higher product quality Elevated experience Better storytelling More curated assortments
8. Luxury Recalibrated After years of over-relying on price increases, luxury must reset. New creative directors across major houses signal a shift back to craftsmanship and creativity. The #1 attribute valued by HNW clients is expertise and quality. Aspiration markets are more price-sensitive; loyalty must be rebuilt.
Bottom Line 2026 is a year of forced adaptation. Tariffs, AI, wellbeing shifts, and new category growth create both risk and opportunity. Winning brands will: Move fast Digitize deeply Strengthen key partnerships Elevate product and value Rebuild their operating models for an AI-first customer and supply chain Fashion’s next leaders are not the biggest—they are the most agile.