Fashion retail in 2025: same challenges ahead but different approaches required

It’s that time of year for fashion retail again. Well, nearly.

Once the crucial peak trading period has been navigated, those in the industry will be reflecting on a year just gone and visualising what’s in store (and online!) for the year ahead.

Analysing the expert views on what to expect, it appears we’re going to see more of the same in terms of challenges for the fashion sector: geopolitical unrest causing supply chain uncertainty; a growing focus on how to become more sustainable; and working out ways to stand out in an increasingly competitive sector.

But although the challenges may be similar to previous years, there are some new approaches that need to be taken into consideration.

Supply chain and consumer reconfiguration

The recently published paper, The State of Fashion 2025: Challenges at every turn, from the brains at McKinsey & Co provides much food for thought.

It states that fashion brands are reevaluating their supply chains as well as which consumer cohorts to pursue.

On the former point, it argues that shifts in global trade have to be monitored – as they have been over the last few rocky years post-pandemic – because they will have an impact on sourcing. Whether it’s having to ship goods around areas of political turbulence or switching the territories where goods are procured, fashion retailers have gotten used to being flexible in recent times – and this will need to continue.

“Retailers will accelerate their reconfiguration of supply chains to prioritise nearshoring and manufacturing in geopolitically aligned countries,” McKinsey predicts, adding that agility, reducing excess inventory, and minimising emissions will drive advances in inventory management supported by new technology.

Intriguingly, the research also suggests the fashion industry has historically placed younger shoppers as their key target market, but that might be changing. The so-called “silver generation” of over-50 customers is growing as a proportion of the overall population, making it a bigger and more lucrative demographic to focus on.

With that in mind, getting the right inventory, understanding the materials and colours this age-group desire, and building knowledge of this cohort across their organisations will become increasingly important in 2025.

“Leaders who move quickly to identify the bright spots, whether they are geographic, demographic, or technological, will be primed for success, but only if they’re able to evolve,” the report says. “The old playbook is now obsolete; the industry will need a new formula for differentiation and growth.”

Ending the year in style?

There are signs of encouragement for fashion retail, based on UK sales figures in recent months – although they have typically been fuelled by the Black Friday discount sales event.

E-commerce industry association IMRG reported UK e-commerce sales were slow to pick up in November, with most sales pushed back to the end of the month to coincide with consumers’ pay day, but stock did eventually start to fly off the physical and virtual shelves ahead of the final December trading push.

Indeed, an online fashion sales decline which had been ongoing from 2022 ended in September. According to IMRG, online sales for the clothing category were up by 4.2% year on year that month, after two years of negative annual sales comparisons.

It bodes well for the year ahead, and according to UK fashion publication Drapers, retail leaders have been operating with “less deep” Black Friday discounts in 2024 than in previous years, therefore saving some margin.

Among the retailers telling the magazine about a successful Black Friday were Dune London, Superdry, and Asos, showing that consumers were willing to spend at specialist, multichannel, and pureplay retailers alike.

As the Christmas run-up concludes, all attention will be switching to the new year and those aforementioned challenges ahead.

At BlueCherry, our supply chain solutions support retailers work in improving inventory accuracy, building more robust supply chains, and making progress with sustainability strategy.

Here is a quickfire refresher on just how BlueCherry’s tech can help the retail industry in 2025:

1. Unification: BlueCherry surfaces data from across different parts of an organisation that helps generate inventory and sales visibility, allowing fashion businesses to make quick decisions based on near-real-time events.
2. Optimisation: The BlueCherry platform helps improve forecasting accuracy and facilitates smooth logistics and communication between multiple suppliers – and across regions.
3. Customer satisfaction: By allowing users to neatly organise supply chain information, BlueCherry gives retailers the capability to better communicate to consumers and deliver on their customer promise.

Connect with one of the BlueCherry team today to learn how our supply chain solutions can give you the tools required to fly high in 2025.