BFES 2024 Report: Exploring New Dynamics in Fashion

MULTIFOCUS TOMORROW :

EXPLORING NEW DYNAMICS IN FASHION

Fashion is entering a bold new era. Driven by evolving consumer desires, technological breakthroughs, and a rising global consciousness, the industry is being reshaped before our eyes. With AI transforming every facet of fashion, we’re witnessing a fusion of innovation and responsibility. At Vogue, we’ve always celebrated those who push boundaries—and now is the time for fashion to rise to the challenge.

AI brings new possibilities, from hyper-personalized designs to reimagined sustainability, but it’s more than a tool. It’s a catalyst for reshaping how we create, connect, and care. The future belongs to brands that can master this balance of cutting-edge technology with a deep commitment to ethics and the environment. Local craftsmanship and global innovation are converging, and those who embrace this shift will lead a fashion revolution defined by purpose and vision.

The environmental impact of fashion has never been more urgent, and the challenge is clear: we need bold, forward-thinking approaches to decarbonize an industry that remains as dynamic as it is influential. The transformation is happening now, and the brands that adapt will not only survive but shape the future of fashion.

KASIA JORDAN Chairwoman Vogue Polska

The fashion industry today is navigating a period of extraordinary transformation across every link in the value chain, from sourcing to production, consumer experience to retail.

In 2023, the global fashion market generated $1.7 trillion in revenue, contributing 2% to the world’s GDP. Yet behind these impressive figures lies a growing tension between progress and responsibility. The industry faces a multitude of challenges, from environmental pressures to regulatory demands, all of which will shape the future of fashion.

The environmental toll of traditional materials is no longer sustainable. Polyester, a staple in fashion, consumes 125 MJ of energy per kilogram and emits 14.2 kilograms of CO2, while the production of a single cotton T-shirt requires 2,700 liters of water. In contrast, recycled alternatives reduce these impacts dramatically—recycled cotton decreases greenhouse gas emissions by 46% and water usage by 75%, while recycled polyester reduces carbon emissions by up to 80%.

However, the future of fashion is not just about adopting sustainable materials; it is about making critical trade-offs across multiple dimensions. One of the most pressing trade-offs is technology versus human touch. AI-driven innovations are revolutionizing supply chains and enhancing personalization, with brands that embrace AI experiencing up to a fivefold increase in predictive accuracy. Yet, there is a delicate balance between the precision of technology and the irreplaceable emotional connection and artistry that human touch brings to fashion. As automation advances, it is vital that the industry preserves the creative soul that makes fashion personal and profound.

Another crucial tension lies between brand autonomy and regulatory influence. Governments are increasingly setting stricter sustainability standards, requiring greater transparency and accountability from brands. While these regulations foster long-term sustainability, they also impose immediate challenges. Brands must find ways to innovate while navigating complex regulatory environments, ensuring they remain both competitive and compliant. Success will come to those who can harmonize their independent creativity with the external forces of regulation, turning constraints into opportunities.

Finally, the industry faces a tug-of-war between local and global dynamics. As supply chains localize to reduce carbon footprints and foster community-based production, the globalized nature of fashion still offers economies of scale and access to broader markets. The future will demand that brands navigate both ends of this spectrum, integrating local craftsmanship and sustainability without sacrificing the benefits of a global network.

The future of fashion will not be defined by one path but by how successfully brands manage these intersecting forces. The leaders of tomorrow will blend technology with humanity, balance autonomy with regulatory responsibility, and seamlessly integrate local values with global reach. Fashion’s future belongs to those who are bold enough to reimagine these trade-offs—creating an industry that is both innovative and responsible, local and global, technological and human.

OKTAWIAN ZAJĄC Managing Director & Senior Partner, Head of BCG Warsaw Office at Boston Consulting Group (BCG)

EXECUTIVE SUMMARY

Driven by rapid changes in consumer behavior, technological advancements, and increased regulatory scrutiny, the fashion industry is undergoing a profound transformation. The integration of AI is reshaping every aspect of the industry, from the design phase to sales and marketing. Consumers today expect personalized and ethical products, exerting pressure on brands to innovate with AI technology while maintaining a commitment to social and environmental responsibility. As the industry navigates this complex landscape, brands must adapt quickly to remain competitive. The fashion industry is a significant contributor to global pollution, estimated to be responsible for 10% of global carbon emissions and the third largest source of water pollution. While efforts to transform the industry are underway, approximately $1 trillion in investment is needed by 2050 to decarbonize the sector. As part of this shift, innovative companies are entering the fashion landscape with alternative manufacturing, dyeing, and production methods that offer substantial sustainability gains. We cannot overstate the potential benefits of the strategic integration of technology, particularly AI, in the fashion industry. GenAI is increasingly integrated throughout the value chain, notably optimizing marketing and sales activities. A Boston Consulting Group study found that 84% of respondents reported time savings from using AI tools, and 81% reported increased speed. A survey assessing consumer reactions to AI-generated social media posts versus human-generated posts found no negative impact on the reception of AI-generated content, suggesting that brands can incorporate AI into content creation while maintaining positive audience engagement.

Personalization is a potent business tool that has the potential to boost overall sales by 5% to 15%. However, fashion brands must strike a balance between customer data analytics used for personalization initiatives and customer privacy. Consumers are increasingly conscious of how their personal and behavioral data is handled. According to Google

Poland, “80% of people are concerned about the state of their online privacy.” This dynamic necessitates brands to prudently manage data practices to maintain consumer trust while delivering tailored experiences.

Regulation and sometimes even targeted stimulation activities by dedicated state agencies are playing an increasingly important role in shaping the fashion landscape. For instance, Saudi Arabia’s Vision 2030 positions the fashion industry as an important economic driver, contributing $12.5 billion to the country’s GDP and employing 230,000 people. This comprehensive support ecosystem has fueled an impressive 8.6% annual growth in the apparel market from 2020 to 2023, outpacing the global average.

Localism is another emerging trend driven by consumer demand for sustainable and culturally resonant products. In Central and Eastern Europe, fashion and technology companies are combining local craftsmanship with advanced technology to create unique offerings. With local production reducing the carbon footprint by up to 40% compared to traditional global supply chains, this consumer trend represents a significant opportunity. Integrating advanced technologies with sustainability goals will be critical to long-term success as the fashion industry evolves. While about 80% of companies aim to lead in sustainability within three years, less than 5% are systematically advancing efforts to achieve these goals. Companies that effectively combine tech and sustainability across their value chains will meet increasingly stringent regulations and capture a growing segment of eco-conscious consumers.

In this rapidly evolving fashion landscape, brand success depends on the ability to master agility, innovation, and customer engagement. Leaders of the fashion revolution will quickly adapt to changing consumer preferences, seamlessly integrate new technologies, and deliver exceptional experiences across all channels, responding to today’s challenges while anticipating the opportunities ahead.

Today, the fashion industry is navigating a challenging operating environment characterized by various external pressures. These pressures fall into three major categories: sourcing and supply chain disruptions, evolving consumer preferences, and market regulations. The impact of these pressures is not hypothetical. There has been a noticeable decline in the sales revenue seen by the fashion and luxury sectors, with companies at risk of margin erosion driven by increased product costs and cautious consumer spending. Excess inventory is rising as brands struggle to sell products in a slower market. To ensure stability and sustainability, it is imperative that fashion companies recognize and respond to the evolving industry landscape.

SOURCING AND SUPPLY CHAIN DISRUPTION

Disruption in sourcing and supply chains is one of the most significant challenges facing the fashion industry today. Volatility in material costs is a notable concern. For instance, while cotton prices have slightly decreased, polyester prices remain elevated.1 This ongoing volatility of raw material costs affects manufacturers’ ability to predict expenses and maintain profitability.

Manufacturing costs are also rising, especially in crucial production countries2. Wage increases in these countries contribute to higher overall production costs, affecting final product prices. Meanwhile, the shipping crisis, particularly in the Red Sea, is driving up logistics expenses and further exacerbating the situation.3 Supply chain disruptions like these create a ripple effect that impacts every stage of the production process.

EVOLVING CONSUMER PREFERENCES

The modern consumer is evolving in response to economic factors. Global inflation rates have increased, influencing consumer purchasing power and behaviors visible on Google’s Consumer Barometer. Although consumer confidence has shown steady growth, it remains relatively low, reflecting a persistent caution among buyers.4 Brands must evolve alongside consumers and adapt strategies to maintain customer engagement and drive sales.

MARKET REGULATIONS

Market regulations, particularly around sustainability, are another external factor shaping the fashion industry. New regulations like the EU Ecodesign for Sustainable Products and Textiles regulation enforce stricter sustainability standards aimed at reducing the environmental impact of fashion production and promoting more sustainable practices.

While essential for long-term sustainability, these regulations pose significant challenges for fashion brands. Compliance often requires companies to invest in new technologies and processes, which can strain financial resources. Despite the initial cost of compliance, these efforts are crucial for the industry’s future.

$1.52

11-year high due to drought and flooding diminishing cotton yields and restrictions on cotton produced in China’s Xinjiang region

COTTON PRICES ARE TRENDING DOWN, WITH GLOBAL PRODUCTION PROJECTED TO RISE GLOBAL PRICE OF COTTON (USD/POUND), MONTHLY

POLYESTER PRICES REMAIN ELEVATED

GLOBAL PRICE OF POLYESTER INDEX, MONTHLY; 2011 = 100

Polyester is a manufactured synthetic fiber derived from petroleum. Its price is highly dependent on the price of crude oil, which fluctuates greatly

Freight

WAGE COSTS HAVE INCREASED ACROSS THE REGIONS, PARTICULARLY IN TURKEY UNIT WAGE COST INDEX FOR MANUFACTURING, ANNUALLY; 2015 = 100

China and the EU account for approximately 50% of global clothing exports

Turkey has experienced the greatest increase in wage costs, partly due to the Turkish government’s efforts to mitigate the impact of inflation and the devaluation of the Turkish Lira

MEGATRENDS SHAPING THE FASHION LANDSCAPE

Trends change the world around us, and the fashion industry is no exception to their influence. The sector strives to recognize and react creatively to the most influential trends, seeking to forge a path for its consumers that aligns with their evolving interests. We identified five trend categories on the fashion horizon that industry leaders can act on immediately: technology, sustainability, market shifts, rising consumer expectations, and supply chain optimization.5 These trends were placed on a matrix, analyzed, and categorized to measure their impact on the industry in the short and long term.

Three areas of focus emerged from the megatrend matrix. The first area of focus, high-impact and short-term trends, demands immediate action. The second area of focus, high-impact and long-term trends, calls for strategic objective consideration, factoring trends into long-term planning. The third area of focus, low-impact and short-term trends, requires more general awareness. As the five trend categories affect both fashion brands and consumers, the three focus areas offer recommendations and insights specific to both brands and consumers.

THE MEGATREND MATRIX:6

MAPPING LEVELS OF IMPACT AND TIME HORIZONS OF KEY TRENDS

RISING CONSUMER EXPECTATIONS

MEGATRENDS

SUPPLY CHAIN OPTIMIZATION TECHNOLOGY

Urgent Actions

USE OF GENERATIVE AI FOR MARKETING

LEVERAGE OF BIG DATA

SUSTAINABILITY & TECH

SHIFTING DEMAND POOLS (segments, geographies)

DIGITALIZED FRONT-END

RESPECT FOR PRIVACY & DATA PROTECTION VS. PERSONALIZATION

RISE OF LOCAL PERSONAL BRANDS

EXPANSION OF WEARABLES

INCREASED REGULATORY PRESSURE

OMNI-CHANNEL

EXPERIENTIAL RETAIL

AUTONOMOUS VEHICLES SHARING & RENTING ECONOMY

SUSTAINABILITY MARKET SHIFTS

AND Strategic Foresight

ADOPTION OF AI AUTOMATED PRODUCTION

SELF-SERVICE

SUPPLY CHAIN SHORTENING

MULTI-PURPOSE CLOTHES

STORES AS DESIGN HUBS

PARTNERSHIP WITH HIGH-TECH BRANDS

SUSTAINABLE MATERIALS

PERSONALIZED PRICING

INCREASED INSTABILITY

SMALLER STORE FOOTPRINT

SHORTER FASHION CYCLE

ONLINE EXPANDS INTO PHYSICAL

BUY ONLY ON SALE

STORE-SPECIFIC ASSORTMENT

SAME-DAY DELIVERY

SHORT-TERM TO MATERIALIZE IMMEDIATELY

1 2 3

IMPACT & SHORT-TERM: Act now or fall behind

IMPACT & LONG-TERM: Strategize to become future-ready

IMPACT & SHORT-TERM: Lower priority trends

TO MATERIALIZE IN UP TO 5 YEARS

HIGH IMPACT & SHORT-TERM TRENDS: ACT NOW OR FALL BEHIND

Category Trend Brand-lens

USE OF GENERATIVE AI FOR MARKETING

LEVERAGING BIG DATA

EXPANSION OF WEARABLES

DIGITALIZED FRONT-END

RESPECT FOR PRIVACY AND DATA PROTECTION VS. PERSONALIZATION

RISE OF LOCAL PERSONAL BRANDS

SUSTAINABILITY AND TECH

SHARING AND RENTING ECONOMY

SHIFTING DEMAND POOLS EXPERIENTIAL RETAIL

Leverage Gen AI to design personalized fashion recommendations and develop custom marketing campaigns that cater to individual tastes, lowering your marketing expenditure and increasing response time to emerging trends and news

Use big data analytics to understand consumer behavior, preferences, and emerging fashion trends to make informed decisions on product development and marketing strategies

Integrate wearable technologies into your products, such as smart clothing with health tracking features, offering fashionable and functional pieces

Ensure your online platforms are user-friendly, visually appealing, and include advanced features like virtual try-ons or AI-based styling advice

Implement strong data protection measures while offering personalized shopping experiences; transparency about data usage and giving consumers control over their personal information will enhance their trust and loyalty

Collaborate with local fashion influencers and designers to create collections that resonate with local styles and cultural specificities, enhancing your authenticity and local popularity

Adopt sustainable practices such as eco-friendly materials, ethical sourcing, and sustainable production methods to meet consumer demand for environmentally responsible fashion

Explore new business models such as clothing rental services and resale platforms to cater to the eco-conscious consumer

Be responsive to changing consumer preferences and demographic shifts, recognizing emerging markets and adapting product lines to cater to new consumer groups, such as younger, techsavvy shoppers or those prioritizing sustainability and inclusivity

Create an immersive and interactive shopping experience using AR/VR technologies, blending physical and digital elements

Prepare for the logistics shift by exploring partnerships with autonomous delivery services offering faster and more efficient delivery options to your customers

Customer-lens

Enjoy personalized fashion recommendations tailored to your tastes

More relevant and personalized fashion suggestions based on your shopping behavior and preferences

Increased availability of wearable devices focusing on lifestyle, health, and fitness, and greater integration of wearables with daily activities

Seamless digital shopping platforms with intuitive navigation, virtual try-ons, and AI-driven style advice, making your experience more enjoyable and efficient

Personalized fashion recommendations while retaining control over your personal data and privacy

Access to unique and culturally relevant fashion items that reflect local styles and heritage, with a rising number of smaller, local brands

More options made with eco-friendly materials and ethically produced clothing, allowing you to make environmentally savvy shopping decisions

Access to newest fashionable clothing through rental services, offering a sustainable and costeffective alternative to buying new items, and allowing for a constantly fresh wardrobe

Wider range of choices that cater to diverse preferences expect more inclusive fashion options, including size diversity, sustainable materials, and culturally relevant designs

Engaging and interactive shopping experience both online and offline with AR/ VR technologies

Quicker and more reliable delivery services reducing package wait times

HIGH IMPACT & SHORT-TERM

TRENDS:

STRATEGIZE TO BECOME FUTURE-READY

Category Trend Brand-lens

ADOPTION

PARTNERSHIP WITH HIGH-TECH BRANDS

NEW SUSTAINABLE MATERIALS

SUSTAINABILITY

MARKET SHIFTS

INCREASED REGULATORY PRESSURE

MULTI-PURPOSE CLOTHES

RISING CONSUMER EXPECTATIONS

SELF-SERVICE

STORES AS DESIGN HUBS

AUTOMATED PRODUCTION

SUPPLY CHAIN OPTIMIZATION

SUPPLY CHAIN SHORTENING

Fully embrace AI to streamline operations from design and trend forecasting to inventory management and personalized marketing, AI can provide valuable insights driving better business outcomes

Collaborate with tech companies to integrate advanced tech features into fashion items, such as smart clothing and accessories

Invest in research and development to discover and adopt eco-friendly fabrics and production methods, appealing to the growing market of environmentally conscious customers

Stay compliant with evolving regulations related to sustainability, labor practices, and consumer protection proactive compliance and transparent communication about regulatory adherence can improve brand reputation and

Innovate by creating clothing that is versatile and adjustable, attracting consumers seeking multifunctional garments

Implement self-service options both online and in-store to improve customer convenience and satisfaction, such as automated kiosks, virtual try-ons, and online customization tools

Transform traditional stores into interactive design hubs offering customization services, workshops, and immersive experiences that engage consumers and support brand loyalty

Implement automated production processes to increase efficiency, reduce costs, and speed up time-to-market; this can also enhance product consistency and quality, meeting the high standards expected by modern customers

Focus on local sourcing and manufacturing, improving logistics efficiency to meet consumer demand quickly and sustainably with reduced lead times and increased responsiveness

Customer-lens

Enhanced shopping experience with personalized recommendations, improved customer service, and efficient inventory management, ensuring you can find what you want more easily and quickly

Innovative fashion products that integrate advanced technology, such as smart clothing with health monitoring features and daily activity support

Fashion items made from eco-friendly materials, allowing you to make choices that align with sustainability and environmental impact values

Higher standards of sustainability and ethical practices in the fashion industry with greater transparency and compliance with regulations, ensuring that the products you buy are responsibly made

Clothing that is versatile and customizable, allowing for multiple looks from a single piece, thereby maximizing your wardrobe’s functionality and reducing waste

More control over your shopping experience, allowing for personalized and efficient interactions with brands, both online and in traditional stores

Engaging and personalized shopping experience, with opportunities to customize products and participate in interactive events and workshops within stores

More consistent and higher-quality products with potentially lower costs faster production times also mean quicker access to new trends

Faster delivery times and fresher fashion items with production supporting local economies

Our report focuses on megatrends identified from conversations with industry experts, brand interviews, and Boston Consulting Group expertise. These trends and the implications and opportunities they present the fashion industry with are explored in depth in the report’s three distinct sections: Technology versus Human Influence, Brand Autonomy versus Regulatory Influence, and Local versus Global Dynamics.

Technology versus Human Influence delves into the evolving relationship between technology and humanity, examining its transformative impact on the fashion industry. Key topics include the integration of eco-friendly materials and sustainable production methods powered by AI. We scrutinize AI’s influence on marketing, juxtaposing it with traditional human-created content to showcase how AI can complement humans in content creation and how human-made content can differentiate itself. Additionally, we explore the balance that data privacy and personalized offerings require, weighing the benefits of personalization against privacy risks.

Brand Autonomy versus Regulatory Influence addresses the tension between brand independence and the increasing scope of regulations. Governments play a dual role, simultaneously supporting fashion e.g. through education programs while implementing new laws that raise supply chain and labor costs. A significant focus of this section is the intersection of sustainability and technology, where brands must navigate conflicting interests and strategies to advance in both areas.

Local versus Global Dynamics examines the shifting dynamics of local and global influences. With more brands localizing production and sourcing, the power of local brands that celebrate sustainability, local craftsmanship, and cultural heritage poses a challenge to global brands with uniform strategies. To flourish in this era of localism, special attention must be given to elevating community representation while respecting local heritage. As Dilys Williams, founder and director of CFS and professor of Fashion Design for Sustainability at UAL, explains, “Designers should aspire not only to create beautiful items, but to craft policies and movements driving positive social and environmental change with respect to local communities’ cultural heritage.” Contrasting with this localism is the rise of global giants and ultra-fast fashion brands like Shein and Temu. Agnieszka Jaworska, Group Commercial

Director at Pepco, notes that “companies like Shein and Temu will make fashion more accessible and attractively priced, which will certainly affect fashion brands. However, Pepco is less vulnerable to these changes because we focus on following trends rather than setting them, and our diversified offerings mitigate our risk.” To maintain market position and sales amidst the output of fast fashion, brands can take a page from the Pepco playbook and adapt quickly with diversified offerings.

In the pages ahead, we analyze the most pressing fashion trends and evaluate their potential for impact on the sector and society, offering actionable insights that strike the balance necessary for lasting industry success.

MULTIFOCUS TOMORROW

TECHNOLOGY vs HUMAN INFLUENCE

TOPIC 1: Fashion Innovations for a Greener Future

TOPIC 2: Creative Algorithms Redefining Marketing Mastery

TOPIC 3: Balancing Personalization and Privacy

BRAND AUTONOMY vs REGULATORY INFLUENCE

TOPIC 4: Governments as Industry Influencers

TOPIC 5: Navigating the Integration of Sustainability and Technology

LOCAL vs GLOBAL DYNAMICS

TOPIC 6: The New Eco-Fashion Supply Chain

TOPIC 7: Winning the Fashion Game

70 64 51 48 38 30 22

Companies must prepare today to succeed in the fashion industry of tomorrow. To achieve meaningful and lasting growth, brands need to embrace the intersection of human insight and technological innovation. Tomorrow’s leaders are already acting on this integration, utilizing innovative technology to elevate marketing content, increase personalization, and streamline operations.

TECHNOLOGY VS. HUMAN INFLUENCE

FASHION INNOVATIONS FOR A GREENER FUTURE

The fashion industry is one of the most resource-intensive sectors, contributing significantly to environmental degradation through waste, pollution, and high carbon emissions.7 Textiles are a particularly problematic part of this equation—the textile industry is the third largest source of water degradation, with textile production responsible for approximately 20% of global clean water pollution. Additionally, only 1% of used clothes are estimated to be recycled into new items.8 Resource depletion, increased waste, and regulatory penalties may challenge the industry’s viability if current practices continue.

THE TRUE COST OF MATERIALS

Raw material production and processing dramatically impact the environment, from land use and overexploitation to pollution and climate change. Many of the fashion industry’s core materials currently come at a significant cost to sustainability ambitions.

POLYESTER

is the most widely produced fiber globally, accounting for 54% of total fiber production.9 Its highly energy-intensive production consumes around 125 MJ per kilogram and emits approximately 14.2 kilograms of CO2 per kilogram.10 This production process contributes significantly to global GHG emissions and microplastic pollution, as polyester garments shed microfibers that contaminate water systems.

LEATHER

processing generates substantial waste and water pollution. Tanning 1 kilogram of leather requires up to 2.5 kilograms of chemicals and 250 liters of water and produces up to 6.1 kilograms of solid waste.11

COTTON

production is a resourceintensive process with a profound and multifaceted environmental impact. Accounting for 25% of textile raw materials and 50% of all textiles, cotton production requires an astonishing 5,000 to 17,000 liters of water per kilogram, with a single pair of jeans needing up to 20,000 liters. Conventional cotton farming uses 24% of the world’s insecticides and 11% of its pesticides, leading to severe soil and water contamination, significant soil degradation, habitat loss, and the pollution of rivers and lakes, adversely affecting biodiversity.12

DOWN

has its own unique set of ethical and environmental challenges. The production of virgin down, sourced from ducks and geese, often involves practices that raise concerns about animal welfare, including live-plucking and forcefeeding the birds. Significant energy and resources are also needed to raise these animals, contributing to GHG emissions and resource depletion.13

THE REINVENTION OF RECYCLING

It is the fashion industry’s responsibility to address the detrimental impact of its materials on the environment. Companies must take immediate action and adopt a modern approach to recycling materials. Imagine wearing a T-shirt that was once a plastic bottle, or a jacket filled with recycled down feathers. These are not futuristic concepts but real advancements of today.

CASE STUDY

THE BEGINNING OF SPIBER INC.

Founded in 2007 by a group of visionary scientists, Spiber Inc. was inspired by the potential of biotechnology to create new materials. The initial goal was to replicate spider silk, a material known for its exceptional strength and versatility. Over the years, Spiber has shifted focus from purely replicating spider silk to developing a broader range of protein-based fibers, known as Brewed Protein™ fibers, which mimic the properties of natural fibers like silk and cashmere. Kenji Higashi, Executive Vice President of Sustainability at Spiber, explains, “Spiber’s technology involves designing proteins at the DNA level to create fibers that perform like traditional materials but with a much lower environmental impact. The Brewed Protein™ fibers are produced through microbial fermentation, utilizing plant-based sugars. This process is highly efficient, requiring significantly less resource input compared to animal-based fibers. For instance, producing 1 kg of Brewed Protein™ fiber uses less than 10 kg of sugar, whereas producing the same amount of cashmere requires 400 kg of grain feed.”

Material

POLYESTER

Recycled polyester

Regenerative leather

Recycled cotton

Recycled polyester, often derived from PET bottles, reduces the need for virgin polyester

Regenerative leather is produced from sustainable materials like mycelium that are biodegradable

Recycled cotton is made from cotton garment waste, reducing the need for virgin cotton

Recycled down

Recycled down is sourced from postconsumer products, reducing the need for new down

30% to 50% reduction in energy use, 70% to 80% reduction in carbon emissions

60% to 75% reduction in carbon emissions compared to traditional leather

35% to 46% reduction in GHG emissions, 66% to 70% reduction in energy consumption

30% reduction in carbon emissions, particularly advantageous for reducing animal harm

Significantly lowers energy use and carbon emissions, reduces plastic waste

Substantially reduces carbon footprint, mitigates deforestation and animal cruelty

Dramatically reduces water, energy usage, and GHG emissions

Decreases carbon footprint and supports animal welfare

First Mile, Plastics For Change

Bolt Threads, Natural Fiber Welding

Evrnu, Martex Fiber

Downlite, Navarpluma

LEATHER

COTTON DOWN

FROM WASTE TO WARDROBE

Take recycled cotton, for instance. Instead of discarding old garments, companies like Evrnu and Martex Fiber turn cotton waste into new fibers. This process slashes GHG emissions by up to 46%, energy consumption by up to 70%, and water usage by up to 75%. The challenge lies in the deconstruction process, which requires significant investment in automated technologies. Yet, the payoff is immense—less waste, less pollution, and a new lease on life for old clothes.

BOTTLES TO THREADS

Recycled polyester, often derived from PET bottles, is another area of innovation. Compared to virgin polyester, it can reduce energy use by 30% to 50% and carbon emissions by 70% to 80%. Companies such as First Mile and Plastics for Change are making significant strides in this field, though challenges remain in scalability and maintaining performance standards during stress tests.

THE NEW DOWN STANDARD

Recycled down is also gaining traction as a sustainable alternative in the industry. Compared to virgin down, it offers a 30% reduction in carbon emissions and addresses ethical concerns related to animal welfare. Leaders like Downlite and Navarpluma are creating certified recycled down products that maintain high performance without needing new raw materials.

LEATHER REINVENTED

Regenerative leather is another innovative solution, significantly reducing the carbon footprint compared to traditional leather production. Alternatives like mycelium-based leather from Bolt Threads and Natural Fiber Welding provide promising sustainable options. Mycelium leather uses significantly less water, reduces carbon emissions, and minimizes the use of toxic chemicals compared to traditional leather, presenting an eco-friendlier option.14 Piñatex, distributed by Ananas Anam, is made from the waste leaves of the pineapple plant, utilizing by-products of the existing pineapple industry and requiring no additional environmental resources. These alternatives mitigate environmental impact and address the ethical concerns associated with animal-based leather.

FASHION’S GREEN TECH TITANS

Significant strides have been made in recycled materials across the fashion industry, with innovation at the heart of the industry’s journey toward sustainability. Companies at the forefront of sustainable fashion are pioneering new paths toward a greener future by forming thoughtful partnerships with technology. Among these innovation leaders are Spiber, Colorifix, and Unspun.

Spiber is pioneering the development of sustainable materials inspired by the diversity and circularity of materials found in nature. This company creates eco-friendly materials and is making remarkable progress in biofabrication and circularity.

A comprehensive life cycle assessment highlights the environmental benefits of Spiber’s Brewed Protein™ fibers compared to traditional fibers like cashmere and merino wool. The assessment found that Brewed Protein™ production can potentially reduce GHG emissions by 79%, eutrophication by 82%, land use by 99%, and water use by 97%

BREWED PROTEIN™ FIBER PROVIDES SIGNIFICANT SUSTAINABILITY COMPARED TO CASHMERE PRODUCTION

GREENHOUSE GAS EMISSIONS

Brewed Protein™ fiber: 37 kg CO2 eq.

Mongolian cashmere: 173 kg CO2 eq.

Australian merino wool: 41 kg CO2 eq.

EUTROPHICATION

Brewed Protein™ fiber: 0.1 kg phosphate eq.

Mongolian cashmere: 0.57 kg phosphate eq.

Australian merino wool: 0.28 kg phosphate eq.

LAND USE

Brewed Protein™ fiber: 7 m2 annual crop eq.

Mongolian cashmere: 496 m2 annual crop eq.

Australian merino wool: 90 m2 annual crop eq.

79%↘ 82%↘ 99%↘ 97%↘

WATER USE

Brewed Protein™ fiber: 6 m2 world eq.

Mongolian cashmere: 228 m2 world eq.

Australian merino wool: 92 m2 world eq.

Spiber’s commitment to sustainability extends beyond product development to include systemic changes in the textile industry. The company’s Biosphere Circulation Project aims to transition the fashion industry from a linear to a circular model. The project focuses on transforming end-of-use textiles and agricultural byproducts into nutrients for microbial fermentation, which can then be used to

produce new materials. The initiative includes partnerships with major brands like The North Face, Pangaia, Kering, and EILEEN FISHER to develop and implement circular design principles and recycling technologies. Spiber also has large scale plans to shift toward second-generation biomass sources and collaborate with global brands to drive the adoption of circular materials. “We are developing materials to replace synthetics like spandex and nylon with bio-based, biodegradable alternatives. This is an important goal for us to reduce reliance on oil and address the issue of microplastics,” says Higashi.

FORAGING A SHARED FUTURE VISION

Scaling up innovative technology poses several challenges, including the need for significant investment in infrastructure and overcoming regulatory barriers. Higashi elaborates, “We need to incentivize less harmful materials and implement regulatory measures to level the playing field. High carbon footprint materials should be taxed, or lower footprint materials should be incentivized.”

Traditional textile dyeing is another area of significant environmental impact. The industry’s dyeing methods use large amounts of water—up to 60,000 liters per process— and harmful chemicals like naphthol, chromium, and heavy metals. These chemicals pollute water bodies and make soil less productive by blocking sunlight needed for aquatic plants and clogging soil pores. Additionally, substances like formaldehyde and chlorine used in dyeing further increase environmental toxicity, posing serious risks to both ecosystems and human health. Advancements in sustainable dyeing aim to reduce water usage, minimize chemical discharge, and enhance recyclability.

Colorifix is an innovative tech startup revolutionizing textile dyeing. The company’s textile dyeing process replaces the entire dye bath, not just the pigment part of the chemistry that goes into dye, decreasing emissions by using less water and lower temperatures.

Orr Yarkoni: The Colorifix Solution

You founded Colorifix in 2016. Could you elaborate on what was your inspiration and motivation behind starting the company and developing alternative dyeing technologies?

I met my co-founder, Jim Ajioka, in 2012. We worked together on a biosensor for detecting water pollutants, particularly heavy metals. This is a big problem in North India, Nepal, and Bangladesh where there’s a hundred million people exposed to chronic levels of arsenic in their water as well as to other chemicals. We thought, “Wouldn’t it be great if we could use our microbes, which change color if the water isn’t safe to drink, to change the color of the fabric instead of measuring the pollution that the fabrics are causing?”

How would you describe the advantage of your technology versus traditional dyeing processes?

We use biology not just to make dyes but to put the dyes where we want them to be, meaning on the fabric. This means that we’re replacing all the dye bath, not just the pigment part of the chemistry that goes into dye, and it allows us to dye using less water, lower temperatures, and thereby saving on emissions and the global impact beyond just the chemistry. We conducted a third-party life cycle assessment on poly-cotton (52% cotton, 48% polyester). When you compare dyeing that material using conventional methods versus our method, we find a saving of 77% less water, 53% less electricity, and 31% fewer emissions.

What are the main challenges associated with scaling your technology, and how do you plan to address them over the next decade?

The biggest challenge is that our technology is new and requires different regulations compared to what our customers are used to. For example, in Europe, it takes an average of three to four months for the regulatory step, while in some parts of Asia it can take six to nine months. Despite these hurdles, we help our customers every step of the way. Our business development team helps understand the clients’ needs, while our implementation team provides guidance on equipment, work area changes, and obtaining the necessary licenses.

Comparison of Colorifix technology vs. traditional dyeing methods

Orr Yarkoni: The Colorifix Solution

What are the key drivers that will compel big brands to introduce changes and make the production process more sustainable?

1 ) 2 ) 3 )

Pressure from end consumers. It’s the consumers who choose brands that do better for the environment and push for better practices through their purchasing decisions and advocacy.

Regulatory changes. Many brands are becoming open to applying new technologies with the increasing regulatory pressure to decrease the environmental impact. Also, clearly regulating new technologies will decrease the cost for brands to partner with innovative companies.

Transparent and uniform life cycle assessment process. There’s also a need for unified communication on sustainability and standardized life cycle assessment methodologies to ensure transparency in calculating the sustainability impact of various technologies and avoid misleading information. Standardizing these processes will help accelerate sustainability efforts and provide transparency for consumers.

UNSPUN™ is our third tech player, revolutionizing the entire garment production process and enhancing sustainability by eliminating several traditional manufacturing steps. Unspun’s™ Brand Lead Annika Visser elaborates on the company’s innovative approach: “Our mission is to reduce global carbon emissions by 1% by revolutionizing how we make clothes. Vega, our first of its kind 3D weaving technology, allows us to produce garments on-demand, directly from yarn to finished product, significantly reducing waste and enhancing efficiency.” Visser notes that to grasp the fashion industry’s end-to-end environmental impact, companies need to incorporate factors such as unsold and unused deadstock-generating products into their product life cycle assessments.

Traditional garment manufacturing involves numerous steps, contributing to significant energy and resource consumption as well as waste generation. In contrast, Unspun’s™ 3D weaving technology streamlines the production process, eliminating several intermediate steps (see graphic). This innovative approach reduces the time and cost of production and enhances sustainability by minimizing fabric waste and improving process efficiency. The environmental savings achieved with the Unspun’s™ technology are substantial. A pair of Unspun’s™ 3D woven pants made on-demand demonstrate a 53% reduction in Global Warming Potential, a 50% reduction in Primary Energy Demand, and a 39% reduction in Blue Water Consumption compared to traditional manufacturing methods.

OVERCOMING BARRIERS

Despite promising advancements, the fashion industry faces significant challenges transitioning to more sustainable operations. Developing and scaling sustainable materials as well as a green transformation of operations requires substantial investment, deterring smaller brands. The total cost of decarbonizing the fashion industry is estimated to be $1 trillion between now and 2050, most of which will go toward capital investment in the supply chain.15 In addition, regulatory variations and the lack of regulations for manufacturing processes complicate the transition, while reliable comparisons and decision-making require standardized life cycle assessment methods. Limited production capacity for sustainable materials hinders large-scale adoption, and consumer habits still prioritize cost and style over environmental impact. Overcoming these barriers is essential for the fashion industry to achieve meaningful and lasting sustainability. To overcome these barriers, consistent education and advocacy aimed at both companies and consumers is crucial.

FIBER PROCESSING

YARNS

WARP BEAMING

FABRIC PREPARATION

MATERIAL FINISHING

APPAREL MANUFACTURING

SUPPLIERS & AGENTS

WAREHOUSING

BRANDS & RETAILERS

CONSUMERS COLLECT FOR UNWEAVING

END OF USE

keytakeaways

Estimates indicate the fashion industry is the third largest source of water degradation.16

Polyester has a significant environmental footprint, while sustainable alternatives like recycled polyester can reduce carbon emissions by 70% to 80%.

Standardized life cycle assessment methodologies are needed to ensure the transparent and consistent evaluation of the industry’s environmental impacts.

Fashion industry representatives interviewed unanimously emphasize that consumers play a significant role in accelerating the fashion industry’s shift toward more sustainable production processes.

VEGA: YARN-TO-YOU

VEGA 3D WEAVING

CREATIVE ALGORITHMS REDEFINING MARKETING MASTERY

From concept to shelf, AI is transforming how fashion is conceived, created, and delivered. To successfully balance this integration, it is crucial to determine which processes can benefit the most from AI integration while simultaneously identifying the areas where human touch is irreplaceable.

THE AI IMPACT

Fashion brands are increasingly integrating Advanced Analytics and Generative AI across their entire value chain. The graphic below highlights the diverse ways these technologies are being applied, showcasing their impact throughout the fashion industry.17

Buying, and Production Logistics

Trend detection and brand monitoring

Product design (generate creative design ideas/ patterns)

Delivery routing (optimize delivery routing and scheduling)

Category Management

Pricing optimization (determine optimal price according to historical data, competitors, etc.)

Digitally-enabled sales force

End-2-end supply chain and inventory optimization across network

Demand forecasting

Optimized supplier management (automated supplier allocation and negotiation)

Dynamic pricing (adjust pricing in real-time according to customer demand, inventory, etc.)

Assortment localization

Assortment optimization

CRM and Loyalty

Personalized product recommendations (customized webpage/app)

Virtual assistants (e.g., chatbot to serve as virtual personal stylist)

Smart/hyper-personalized alerts

Conversational commerce

Virtual try-ons (product visualization on different body types)

Customize loyalty program (create different loyalty programs according to customer personas)

Marketing and Sales

Virtual modelling (avatars modeling in a virtual fashion show)

Virtual influencers (e.g., avatar as a brand ambassador on social media)

Product description (auto-generate product descriptions)

Product tagging (create automatic tags based on product images)

SEO-optimized content (generate headlines for online ads)

Product combination recommendation

Marketing content creation (create social media content)

Personalized marketing campaign (customized social media content)

Advanced Analytics and GenAI are revolutionizing trend forecasting and market analysis by processing massive data streams from social media, fashion blogs, and sales records. Inditex brands use AI algorithms to predict trends, allowing for quick responses and alignment with emerging consumer preferences.18 AI is also revolutionizing the design and development phase by automating routine tasks and enabling rapid prototyping. Tools like CLO reduce material waste and accelerate the design process by allowing designers to create virtual prototypes that facilitate quick iterations and real-time feedback without the need for physical samples.19

In production and manufacturing, AI optimizes processes by predicting demand and managing inventory with unparalleled precision. H&M is using AI to improve operational sustainability by optimizing recycling processes and predicting garment life cycles, not only reducing waste but also enhancing efficiency and cost-effectiveness.20

TRANSFORMING FASHION MARKETING WITH AI

AI is revolutionizing marketing and visual search, enabling brands to connect with customers in innovative ways. Maison Meta is an avant-garde digital agency utilizing AI with remarkable efficiency, collaborating with luxury brands like Moncler, Dolce & Gabbana, and Tory Burch to produce compelling marketing content.21 The company’s Moncler Genius campaign at London Fashion Week 2023 featured AI images completed in just two weeks. Maison Meta’s ability to blend AI with human creativity sets a new standard in fashion marketing. By leveraging AI to handle time-consuming tasks like image processing and style adaptation, the agency frees up human designers to focus on conceptual development and fine-tuning the artistic vision. This synergy between AI efficiency and human ingenuity results in marketing content that is visually striking and deeply resonant with the brand’s identity and audience expectations.

Casablanca’s Futuro Optimisto campaign further showcases the transformative power of AI in the fashion industry.22 Collaborating with photographer Luke Nugent, Casablanca used AI to create hyperrealistic, painting-like visuals for their Spring/Summer 2023 collection. The campaign featured stunning images set against surreal backdrops inspired by themes of futurism and optimism. By integrating AI into the creative process, Casablanca was able to explore new aesthetic possibilities, produ-

cing visuals that were both innovative and evocative. The success of the Futuro Optimisto campaign also underscores the essential role of human creativity. While AI facilitated the production of the visuals, conceptualizing the themes and guiding the overall artistic direction required substantial human creativity. This collaboration highlights AI as a tool that enhances human creativity rather than replacing it, allowing brands to push the boundaries of artistic expression while maintaining a coherent and authentic narrative.

NEW WAYS OF WORKING

AI is becoming a real alternative to certain human operations, challenging the fashion industry’s ways of working and significantly impacting the speed at which it creates. The integration of AI in fashion is more than just a technological advancement—it’s a paradigm shift. By automating routine tasks and providing deep insights, AI is transforming traditional workflows.

With the time saved through AI integration, industry professionals can perform more tasks and focus on strategic initiatives. This newfound efficiency allows them to experiment with new methods and technologies, driving continuous improvement and innovation. By freeing up time and resources, AI empowers professionals to explore new opportunities and concentrate on higher-level activities that contribute significantly to business growth.

Boston Consulting Group conducted a study to measure the impact of GenAI on organizations. A significant 84% of respondents agree that leveraging GenAI tools saves them time, while 81% agree that GenAI increases their speed.23 Of respondents, 41% indicate they can devote this additional time to perform more tasks, while 39% of respondents are able to focus on new tasks. These findings support the notion that GenAI is a key lever to unlocking heightened employee productivity.24

GEN AI IS PROVIDING

real-world benefits,

PARTICULARLY IN PRODUCTIVITY

SHARE OF USERS WHO AGREE THAT GEN AI HAS...

SAVED THEM TIME

INCREASED THEIR SPEED

IMPROVED THE QUALITY OF THEIR WORK

DECREASED

INSIDE CONSUMER PERCEPTIONS OF AI-GENERATED CONTENT

As AI continues to redefine content creation in fashion marketing, it is important for brands to understand how AI-generated content is perceived. To dive deep into AI perception, we conducted a survey where consumers evaluated human-based and AI-generated social media posts and photographs.25

EVALUATING AI IMAGES

Survey respondents evaluated fashion photographs across six dimensions: creativity level, clarity of message, innovativeness, overall visual appeal, impact on respondent’s engagement, and overall emotional response. Remarkably, the AI-assisted photograph and the one captured by a human photographer received nearly identical scores across all criteria. This finding indicates that consumers exhibit no significant preference between entirely human-created graphics and those designed with the support of AI, giving creative teams confidence to integrate GenAI into marketing content creation without compromising consumer reception.

RESPONDENTS’ RATING OF HUMAN AND AI-GENERATED PHOTOS ACROSS 6 DIMENSIONS INDEXED PER 100% OF HUMAN PHOTOGRAPHER GRADES PER AREA

Human photographer AI-generated photo

PREFERENCE FOR AI-GENERATED VS. HUMAN-GENERATED GRAPHICS BY COUNTRY

GEOGRAPHICAL DIFFERENCES IN AI ATTITUDES

To gain deeper insights, we compared customer responses to fashion marketing content across several European countries. Respondents from Poland, Germany, Italy, France, and the UK were asked to choose their preferred fashion photograph—one they would rather encounter in social media posts, for instance. While there were

some differences by country (in Italy, 62% of respondents expressed a preference for human-created photographs), the overall trend showed an even split, with approximately 50% of respondents favoring AI-generated graphics and the other 50% favoring human-created images. This balanced preference suggests that fashion brands incorporating AI in content and graphic creation are unlikely to experience negative reactions from European audiences.

ABILITY TO RECOGNIZE AI-SUPPORTED CONTENT

To explore consumer perceptions of marketing text, we asked our respondents to identify which social media post was created by a human and which one was created with the use of AI. Of these respondents, only 23% accurately identified AI-generated text, while 33% mistakenly identified human-written texts as AI creations. Nearly half of respondents were unsure or believed both types of content were either AI-generated or human-generated. These results indicate a significant blurring of lines between AI-created and human-created text, with AI achieving a level of sophistication that makes differentiation difficult for consumers. In comparison, respondents more accurately identified AI-generated pictures, with 38% correctly recognizing them as AI-made. This contrast between text and visual AI content suggests that, while AI-generated images are becoming increasingly sophisticated, they remain more distinguishable than AI-generated text.

GENERATIONAL INSIGHTS OF AI ATTITUDES

Notably, there are no drastic differences in the ability of varying age groups to distinguish AI-generated images, with younger and older respondents performing similarly in this area. That being said, younger participants, particularly those aged 18 to aged 24, are more adept at identifying AI-generated graphics, with 52% correctly recognizing AI-created images. This suggests that younger individuals who are often more familiar with digital technologies can better detect visual patterns associated with AI. In contrast, younger respondents did not perform as well when it came to text, with only 20% correctly identifying AI-generated text. This aligns with the overall trend that text-based AI content is more challenging for all age groups to distinguish. Additionally, there were no significant age-related differences in text perception accuracy, indicating that AI’s sophistication in generating written content equally confounds all demographics. That said, older respondents did display more confusion regarding the origins of both AI-created and human-created texts and images, with the percentage of “not sure” answers increasing with age, highlighting a greater uncertainty among older participants in distinguishing AI-generated content. Overall, older respondents were more likely to be unsure about the origins of both AI-created and human-created texts and images.

RESPONDENTS' ABILITY TO RECOGNIZE AI TEXT ACROSS AGE GROUPS

RESPONDENTS' ABILITY TO RECOGNIZE AI GRAPHICS ACROSS AGE GROUPS

REGIONAL INSIGHTS OF AI ATTITUDES

Our exploration of AI-generated content perception across different countries unearthed valuable cultural insights. In Poland, 31% of respondents correctly identified AI-generated text—far higher than the 18% to 23% accuracy seen in other nations may have be linked with Central and Eastern Europe’s rise as a fashion-tech hub, with venture capital pouring into the region and driving the prevalence and recognition of AI technologies in everyday life.26

SYMBIOTIC AI AND HUMAN CRAFTSMANSHIP

As we delve deeper into the intersection of AI and human creativity, it is evident that AI’s role in the fashion industry is more collaborative than competitive. With the increasing sophistication of AI, it is pivotal for companies to determine how this technology will support industry professionals and how these professionals will distinguish their contributions. In the mass market, AI’s ability to quickly produce and adapt content makes it a powerful tool for reaching broad audiences and going viral. AI can generate high-quality, engaging content at scale, making it ideal for fast-paced, cost-sensitive environments. Although AI will revolutionize the fashion industry, the human element remains crucial in areas requiring personal touch and creativity. The future of fashion will see a blend of AI-driven efficiency and human ingenuity, each complementing the other to deliver innovative and authentic experiences.

keytakeaways

Fashion brands are integrating Advanced Analytics and GenAI throughout their entire value chain, enhancing capabilities in trend forecasting, market analysis, consumer data processing, and product design acceleration.

Generative AI has transformed work processes, with 58% of users reporting a productivity boost, saving over 5 hours per week.

Consumers struggle to distinguish between AI-generated and human-created content, finding it easier to identify AI-generated images (38%) than text (23%).

BALANCING PERSONALIZATION AND PRIVACY

Striking a strategic balance between personalization and data privacy is crucial for the fashion industry to evolve alongside technology. Personalized content drives five times to eight times higher ROI when compared to non-personalized content.27 Although 76% of consumers worry about the security of their online data, 71% of consumers prefer personalized ads that create positive experiences.28,29 Brands must acknowledge these paradoxical expectations, respecting customers’ need for data privacy while enhancing the customer journey with personalized content.

Personalization is already widespread in the fashion industry. Fashion brands are leveraging this powerful tool by tailoring marketing content, advertising, communication, and product propositions on their websites to individual customers. Effective solutions like Google Cloud services enable fashion brands to offer personalized experiences while ensuring data privacy. As an example, Google Cloud offers Vertex AI Search, which delivers personalized recommendations based on each customer’s unique preferences.30

DATA AND DIGITAL MARKETING

AI has become a significant game-changer in digital marketing. Personalization in fashion, particularly marketing content, relies on data aggregation and AI-driven analysis. We can notice this, for example, when browsing social media and being targeted with ads by brands such as Zalando, Modivo for products that match our style. Data collection is fundamental for effective digital marketing—historical data of customers’ behavior, shopping history, transaction tickets, as well as spend forecasts are the base of building personalized content. “In this new era, data isn’t just about selling; it’s about storytelling, co-creation, and building lasting relationships with your audience,” says Google fashion industry manager Magdalena Bornos-Paciorek. Additionally, luxury brands like Gucci utilize AI-driven insights to craft compelling narratives in their marketing content, blending data with creative storytelling to engage their audience on a more personal level.31

According to Salesforce, 48% of brands are using AI techniques for ad targeting. AI is enhancing these brands’ understanding of their clients and increasing the efficiency and effectiveness of their advertising efforts by facilitating data collection and data analysis, enabling precise customer segmentation, supporting creation of personalized content, and accelerating monitoring and measuring results. The efficiency and effectiveness of advertising efforts are greatly enhanced with AI’s ability to process large volumes of data and generate real-time insights.32 33

5 p.p to 10 p.p

CHURN REDUCTION FROM PERSONALIZATION34

100% to 200% +

ENGAGEMENT OF USER FROM PERSONALIZATION35

5% to 5% 20%

SALES LIFT ON TOTAL BUSINESS FROM PERSONALIZATION36

OF CUSTOMERS OPT IN TO RECEIVE NEWSLETTERS OR MARKETING MATERIALS WHEN THE EXPERIENCE IS POSITIVE37

43%

OF CUSTOMERS WOULD SWITCH FROM THEIR PREFERRED BRAND TO A SECONDCHOICE BRAND IN RESPONSE TO A POSITIVE PRIVACY EXPERIENCE38

CASE STUDY

STITCH FIX

Stitch Fix is unlocking significant value by leveraging the nearly 4.5 billion text data points that clients have shared with them. This data includes client’s style preferences, past purchases, textual feedbacking a freeform text shared with stylists, style keywords, and product attributes. The company utilizes AI to analyze the feedback and create recommendations for clients, showcasing 43 million outfit combinations every day through personal shopping feeds or personalized emails and ads. The final output is verified by experts and currently meets an impressive 77% pass rate. Stitch Fix is leveraging AI to deepen personal connections between their styling experts and clients through AI feedback interpretation and quick summaries that synthesize the main message based on pre-trained algorithms.39

Fashion brands should navigate the delicate balance between personalization benefits and data privacy risks to enhance customer experience in fashion

From a customer perspective, content personalization makes shopping easier by presenting desired products directly in our feed, eliminating the need to search for them. Google asserts that most people say they only want to see ads that are relevant and useful to them.40 To balance the reward of personalization with the risk of data, Google asserts that transparency, customer control, and ethical AI are critical.

According to Scott McKinnel, the country manager for the iTWire tech platform, “data is the most valuable asset for fashion businesses.” Collected data includes shopping habits as well as demographics, with fashion brands acting as huge data storehouses. This goldmine of data attracts industry competitors, represented by hackers, who attack the system across the value chain to access sensitive data.41 This concern emphasizes that data acquisition can be risky, not because fashion brands might misuse the data, but because hackers are aware that fashion brands collect it. Leading companies need to prioritize investment in cybersecurity, particularly when using data-driven analysis and personalization to enhance marketing and communications. Brands that embrace this shift will build lasting relationships with customers who feel understood and valued.

Transparency is key. Brands should clearly communicate what data they collect, how it’s used, and who it’s shared with. Giving customers control over their data, allowing them to opt-in or opt-out of specific features, fosters trust.

MAGDALENA BORNOS-PACIOREK, GOOGLE

HOW GOOGLE IS ENABLING PERSONALIZATION AND DATA PRIVACY

Selected examples from Google fashion industry manager, MAGDALENA BORNOS-PACIOREK

Zalando uses Google Cloud to provide personalized recommendations while ensuring privacy, giving customers a tailored shopping experience without compromising their data security.

CCC with Google Lens allows customers to find products by snapping a picture, making it easier and faster for them to discover similar items while keeping their data secure.

Trendyol uses real-time data to adjust quickly to customer needs, ensuring they find what they want during high-demand events like Black Friday, enhancing their overall shopping experience.

Hunkemöller’s AI-driven personalization means customers receive more relevant product suggestions, improving their satisfaction and likelihood of finding exactly what they want.

Benetton Group’s personalized recommendations in real-time lead to a smoother shopping experience, making it easier for customers to find products they like, resulting in a 7% increase in sales.

On’s data platform allows for personalized product suggestions across 50 markets, helping customers quickly find products that match their preferences.

LPP’s scalable cloud infrastructure ensures that even during peak shopping times, customers enjoy a fast and smooth online experience, without delays or interruptions.

Vestiaire Collective’s rapid translation services mean customers can browse and purchase products faster, with accurate descriptions in their preferred language.

AllSaints’ faster site load times provide a quicker and more enjoyable shopping experience, leading to more successful purchases and happier customers.

Breuninger’s real-time data insights mean customers benefit from more relevant product offerings and quicker service, enhancing their overall shopping experience.42

The most successful brands will be those that are able to build relationships based on trust, creating a truly personalized and enjoyable shopping journey while also respecting privacy.

MAGDALENA BORNOS-PACIOREK, GOOGLE

EXECUTIVE INTERVIEW

Szymon Wałach Vice President of Digital and Strategy & Member of the Management Board InPost

Personalization and data privacy offer significant value to the fashion industry’s e-commerce spaces —striking a strategic balance between these two spheres is necessary to maximize the benefits of both.

InPost, a trusted brand specializing in innovative logistics and delivery solutions, places significant emphasis on security as showcased by its InPost Pay offering that provides fast, convenient, and secure check-out options. Founded in Poland in 2006, the company is expanding growth in the UK, Italy, France, Spain, Portugal, and the Benelux countries. Most recently, InPost launched InPost Pay check-out, an innovative solution for both merchants and customers.

What exactly is InPost Pay?

InPost Pay is a modern check-out system for B2C stores, offering state-of-the-art features known from the best marketplaces. It enables customers to move their shopping baskets from the store to the InPost app and enjoy a 1-click delivery and payment experience. It provides the highest level of UX, speed, convenience, and security. InPost Pay is a plug-and-play solution that any store can implement alongside its standard methods to enhance the customer shopping experience. InPost Pay is a great vehicle to tap into the 12 million InPost Mobile app user base, of which nearly 7 million are customers shopping in the fashion industry.

What is the story behind this solution?

After solving a major e-commerce pain point in parcel delivery with our automated parcel machines, we’ve tackled the next big thing: checkout. Long purchasing processes that require buyers to complete multiple data fields or set up an account result in lost sales. InPost Pay is an express checkout solution that combines payment and delivery in one click, addressing major pain points for both consu-

mers and merchants. Depending on the study, 60% to 70% of shopping carts are abandoned by consumers. The key reasons why customers abandon their baskets and decide to make their purchases elsewhere are related to security and speed of the process.

InPost Pay aims to simplify online purchases for users while delivering a significant conversion boost to merchants. Thanks to easier and faster checkout, we can increase basket conversion by 30% to 70%, directly contributing to increased merchant GMV. Moreover, InPost Pay is a great base to attract new customers, with 85% of purchases made by clients with no previous purchases at a given e-store. Best-in-class user experience translates to an unprecedented pace of user acquisition: we reached our first million users just over three months after launch, and, as of August, we have exceeded 4.5 million registered users. As a brand, we have an NPS of 80 points, and 94% of Polish Internet users shopping online choose InPost parcel locker as a delivery method, confirming that it is a top-tier solution.43

Currently, we hear more and more about personalization, but what exactly does it mean from your perspective?

Personalization can have many dimensions—from product suggestions to preferred delivery methods and automatic data entry for orders. Personalization is not just about suggesting products that a store will offer to a customer as a cross-sell or displaying products on the first page based on the customer’s profile. It also involves suggesting the most preferred delivery method, pre-filling all order data based on previous order history, and customizing the package pickup process to the customer’s preferences. The personalization element includes many different aspects of the customer journey, such as ready-made baskets and personalized discount of-

Szymon Wałach Vice President of Digital and Strategy & Member of the Management Board InPost

fers that create a convenient shopping experience. InPost Pay enables customers to shop in any store with delivery and payment data already prefilled based on the customer’s shopping history with InPost. A personalized approach lies at the heart of InPost Pay and positions it as a next-generation e-commerce enabler.

How does the InPost Pay solution help fashion companies balance consumer expectations regarding data security and privacy while also enabling the personalization of marketing content?

Our solution gives independent brands the opportunity to build both their brand and loyal customer base. The store receives all the necessary data to fulfill the order and the customer has the option to decide whether to connect with the store by signing up to the merchant’s newsletter. So far, one-third of Pay transactions are made with voluntary marketing consent. The process of storing sensitive financial data takes place in our application, so the customer only needs to enter the data once. And, at every step in this process we keep our customers informed about the purpose of data storage and security measures, including payment information and the possibility to withdraw data consent at any time, addressing their need for transparency and control over their data.

What new technologies do you think will transform the personalization of payment and delivery options in the fashion industry by 2030? And what should fashion brands pay attention to in light of these trends?

We see globalization, the rapid development of cross-border, the blending of omnichannel experiences, and technological progress as key trends. Robotization and Industry 4.0 will transform supply chains, impacting the entire fashion industry. I believe that opportunities will emerge every year, as

we see how many innovations lie behind technological changes.

We observe all elements related to better understanding consumers through the analysis of their behaviors. Personalization in our approach focuses on building an excellent experience, which translates into customer satisfaction, trust, and loyalty. Brands have a lot to do in terms of loyalty, making decisions based on a comprehensive analysis of the shopping journey, which includes delivery, pickup, returns, and feedback.

AI and Generative AI are in the early stages, but their development will continue. I believe that robotization will be the next step, completely transforming supply chains and the way orders are fulfilled in the fashion industry.

PRIORITIZING PERSONALIZATION AND PRIVACY

The industry faces the challenge of meeting consumer expectations for personalized brand interactions while addressing increasing concerns about digital data privacy. To maintain a data-driven approach in marketing and communication, leading companies must find a balance between these two dilemmas, prioritizing cybersecurity and transparency.

keytakeaways

Personalization is a powerful business tool that can generate significant business value by engaging consumers.

Data collecting and processing is a critical enabler to unlock the full power of personalization efforts.

Clients of fashion brands are increasingly perceptive and apprehensive of the ways in which their personal and behavioral data is processed— the fashion industry must navigate the dueling consumer expectations of personalization and data privacy.

Investment in cybersecurity while also providing consumer data transparency is essential to maintain consumer trust.

Local and global players must comply with increasingly rigid regulations impacting value chains and day-to-day operations. Regulations differ massively between countries and regions, further complicating things. For regulations to be effective, it is pivotal to foster collaboration between public institutions and businesses.

BRAND AUTONOMY VERSUS REGULATORY INFLUENCE

STATE INSTITUTIONS AS INDUSTRY DRIVERS

State institutions have significant potential to shape the fashion industry’s future through regulations and stimulating the investments. The most effective regulations approach interventions in the fashion industry holistically, ensuring the realization of regulations while allowing the industry freedom and space for development. Clear use cases for regulatory frameworks in fashion have emerged where governments are proactively implementing regulations, e.g. EU Strategy for Sustainable and Circular Textiles or the Ecodesign for Sustainable Products Regulation. The most successful policies support sustainability, stimulate local players, and empower local players to compete globally. The Kingdom of Saudi Arabia is an example of the positive impact state institutions can have by introducing regulations alongside support and opportunity.44

LEARNING FROM SAUDI ARABIA’S LEADERSHIP

Saudi Arabia’s fashion industry growth is strengthening the position of designers from the Gulf Cooperation Council region in global trendsetting processes and drawing the focus of global retailers to the Saudi market. However, the impact of Saudi Arabia’s strategy reaches far beyond regional demand shifts. Saudi Arabia’s most successful fashion businesses all leverage the Kingdom’s fashion ecosystem.45 By doing so, they send a clear message to the world that creating a strong domestic fashion industry is possible without limiting the presence of global players if the support system is holistic and integrated.

NAVIGATING FORTHCOMING FASHION REGULATIONS

Fashion has emerged as a priority for lawmakers, forcing fashion businesses to navigate complex regulations and comply with established standards. In the European Union, legislation includes the EU Strategy for Sustainable and Circular Textiles and the Ecodesign for Sustainable Products Regulation.46 France has introduced a bill taxing fast fashion to lessen environmental harm and consumption, targeting foreign ultra-fast fashion entities. The United States Congress has also proposed numerous regulations in the fashion industry, such

Saudi Arabia

APPAREL AND FOOTWEAR CAGR ACROSS REGIONS

THE KINGDOM OF SAUDI ARABIA

The fashion industry is an integral element of Saudi Vision 2030, Saudi Arabia’s transformative blueprint built around a vibrant society, a thriving economy, and an ambitious nation. Between 2020 and 2023, Saudi Arabia’s Apparel and Footwear market grew by 9% per annum, with growth of about 4.5% per annum expected until 2028.49 Despite market domination by global brands, the most prominent players are still regional businesses, such as Al Bandar Trading Company, Fawaz Abdulaziz Al Hokair Company, and Alshaya Group.

Saudi Arabia’s fashion industry, a significant contributor of $12.5 billion or 1.4% to the country’s GDP and employer of 230,000 workers, is on a trajectory of growth, largely driven by domestic businesses.50 The Kingdom’s substantial investment in these businesses, as highlighted by the Fashion Commission‘s CEO Burak Cakmak, is a key factor in this growth: “We are building the foundations for the future of fashion right now, here in the Kingdom of Saudi Arabia.” The early success of brands like Abadia and Yasmina Q or designers like HINDAMME and Arwa Al Banawi adds merit to the Kingdom’s strategy of boosting its domestic industry. Saudi Arabia’s ecosystem of support programs and policies play a significant role in the fashion industry’s success.

The Fashion Commission was established to support the Ministry of Culture ‘s ambitious goals to empower and support the fashion sector in Saudi Arabia. The Commission’s mission is to enable the development of a thriving Saudi fashion industry that is sustainable and inclusive, fully integrated along the value chain, and that elevates local talent, experiences, and competencies.

A key benefit to building internal capabilities is the ability to nearshore the supply chain into Saudi Arabia. The Kingdom’s ambitious $10.6 billion Global Supply Chain Resilience Initiative is dedicated to attracting global industrial companies.51 The impact of strategic initiatives in this field is significant nearshoring 20% of fashion imports into Saudi Arabia would generate manufacturing sales of $1.4 billion.

The Fashion Commission is also enabling local fashion businesses to grow their presence globally with Saudi 100 Brands. The program’s holistic combination of design, manufacturing, and business skills creates a massive opportunity for domestic businesses to grow and gradually become regional and global contenders. With the success of Red Sea Fashion Week, Exhibition at the Saudi Cup, or Riyadh Fashion Week 2023—which hosted more than 250 influential figures and enabled 30 domestic brands to showcase their products—it is evident that Saudi Arabia’s investments are paying off.52

as the FABRIC Act, which aims to ensure minimum wage and hourly pay protection for more than 100,000 fashion workers. It also proposes that fashion brands and retailers be jointly liable for workplace violations and supply chains.47 Meanwhile, the Fashion Sustainability and Social Accountability Act would require players with revenue over $100 million to report on their entire supply chains and carbon emissions produced.48

While regulatory challenges exist, legislative acts aimed at the fashion industry also provide incentives and opportunities that enable local fashion players to strengthen their operations and rapidly expand to foreign markets. For successful growth, companies must prioritize understanding various regulatory environments, as support schemes and regulations are not globally integrated and differ massively between regions.

SECTOR SUPPORT IN CENTRAL AND EASTERN EUROPE

Fashion tech players have contributed to the fashion industry’s growth in Central and Eastern Europe. Strong technological capabilities and high fashion consciousness enable companies like Vinted, Alpha3D, and The NOLD to achieve regional and international success.53 Innovative fashion companies from the region leverage strong IT infrastructure, market sentiment favoring tech solutions, and the relatively high number of STEM graduates.

Although direct support from state institutions for innovative players is still developing, use cases of fashion players leveraging technology in fashion exist. WearFits, a company that specializes in virtual fitting room technology by leveraging AR and AI technologies, received partial funding from the acceleration programs organized by the Polish Agency for Enterprise Development.54 However, most support programs for fashion players in Central and Eastern Europe are still relatively immature, providing the region with untapped potential for further growth.

keytakeaways

Regulatory environments must be factored into the strategies of fashion companies, with EU and US regulations set to heavily impact the entire fashion value chain globally through rigid environmental, social, and governance standards.

Examples of countries like Saudi Arabia illustrate the role of state institutions in stimulating fashion sector.

The fashion industry in Central and Eastern Europe is leveraging strong technological capabilities, with support from state institutions offering additional potential for the sector’s sustainable growth.

Six government support schemes stand out for their effectiveness: tax reliefs, incubation and acceleration programs, direct investments, building internal capabilities, nearshoring production, and extending the presence of domestic players through events and PR activities.

NAVIGATING THE INTEGRATION OF SUSTAINABILITY AND TECHNOLOGY

The industry is at the crossroads of innovation and responsibility. The burgeoning integration of advanced technologies—from AI-driven design to blockchain-backed supply chains—promises to revolutionize the way fashion is conceived, produced, and consumed. However, this technological renaissance comes with the pressing imperative of sustainability goals. In an era marked by climate change and resource scarcity, the fashion world must balance its innovative goals with a commitment to protect the environment. This balance is further complicated by the evolving regulatory landscape. In this context, fashion companies must adopt a multifocal approach to thrive. Leaders of the fashion future will simultaneously innovate with technology, adhere to stringent regulatory requirements, and champion sustainable practices. By adopting this holistic strategy, brands can innovate responsibly and foster sustainable development.

CRAFTING FUTURE-READY FASHION WITH AI AND SUSTAINABILITY PRACTICES

Boston Consulting Group conducted over three years of longitudinal research across 24 sectors to identify the attributes and critical capabilities necessary for success in today’s rapidly changing world. The culminating Build

for the Future publication revealed that for the Fashion and Luxury sector, embedding AI and sustainability practices is one of the core attributes that drives the success of future-built companies.55

Sustainability has become a strategic imperative and a source of profitability for forward-thinking fashion companies. As the industry grapples with rising energy prices, the scarcity of natural resources, and geopolitical pressures driving the push for greater energy independence, sustainability initiatives have emerged as a vital component in building resilient businesses. For instance, investing in sustainable materials and energy-efficient processes can drive efficiencies that reduce operational costs. By adopting renewable energy sources and improving resource management, fashion brands can mitigate the risks associated with volatile energy prices and resource scarcity.

Despite the evident benefits, progress toward sustainability has stalled at many companies. Approximately 80% of companies aspire to be sustainability leaders within the next three years, but less than 5% are systematically implementing advanced use cases to accelerate the realization of sustainability and societal benefits.56 This gap between aspiration and execution highlights significant challenges in the sustainability transition.57

53% 12% 4%

The transition to a sustainable future is intricately linked with the integration of advanced technologies, particularly AI. Embedding AI is more than an enhancement – it is becoming the biggest differentiator driving the success of future-built fashion players. Companies that lead in AI capabilities demonstrate higher maturity and effectiveness in predictive AI and Generative AI. Future-built companies exhibit a five times higher share of predictive AI maturity compared to stagnating companies, enabling them to anticipate trends and optimize supply chains more efficiently. Additionally, future-built companies are at least two times more likely to be scaling AI and GenAI,

BUDGET AND RESOURCE ALLOCATIONS FOR DIGITAL AND AI/GEN AI IN 2024

REVENUE SHARE INVESTED IN DIGITAL & AI

SHARE OF FTES DEDICATED TO DIGITAL & AI WORK

leveraging it to enhance design processes, customer interactions, and production methods.58 Companies slow to adopt GenAI must act decisively to elevate their aspirations for this transformative technology. To achieve with AI, companies must focus on identifying strong business value for GenAI initiatives, prioritizing leadership support, establishing responsible AI policies, developing advanced data strategy, building modern infrastructure, and customizing governance approaches.59 With the proven ability of AI solutions to enhance company capabilities, investment in this technology remains a top priority for future-built companies.60

REVENUE SHARE INVESTED

2024 INCREASE IN AI/GEN AI INVESTMENTS VS. 2023

ORGANIZATIONS’ LEVEL OF ADOPTION OF CAPABILITIES

STRONG AND QUANTIFIED LINK BETWEEN GEN AI INITIATIVES AND BUSINESS VALUE

MODERN TECHNOLOGY INFRASTRUCTURE

ADVANCED DATA STRATEGY (INCLUDING FOR UNSTRUCTURED DATA)

ADVANCED

MANAGEMENT AND SECURITY

REDEFINED GOVERNANCE PROCESSES AND ROLES

UPSKILLING/RESKILLING OF DEVELOPERS AND END USERS

RESPONSIBLE AI GUIDELINES AND PROCESSES IN PLACE

The integration of sustainability and AI in the fashion industry is rapidly evolving, necessitating the navigation of an increasingly complex regulatory environment. Current and anticipated sustainability and AI regulations significantly influence strategic planning and operational decisions within the industry. As of late 2023, the EU was considering 16 legislative measures related to fashion and textiles, with the first of these set to come into effect in 2024.61 The EU‘s circular economy action plan fosters sustainable growth through a circular economy, targeting the most resource-intensive sectors and where circularity potential is high. The plan also includes initiatives to increase the recycled content in products, reduce waste, and enhance product life cycle sustainability. Meanwhile, the recently adopted Green Claims Directive outlines rules for communicating and substantiating green claims, as well as environmental labeling regulations, to combat greenwashing. By the end of 2024, self-regulation of sustainability may no longer be an option for fashion companies, driven by a wave of new regulations worldwide set to enforce greater transparency, accountability, and sustainable practices.62

According to Krzysztof Bajołek, founder and CEO of Answear, a leading Polish-based digital platform that sells branded clothing, footwear, and accessories in the CEE region, anticipated sustainability and AI regulations in the EU are significantly influencing the strategy and operational decisions of the company. Difficult considerations have arisen during this transition, Bajołek shares: “Will we be able to implement all the changes resulting from new regulations without further losing competitiveness in global markets compared to entities from Asian or even American countries that do not introduce such regulations? By strictly adhering to all regulations, will we have equal chances to compete in global markets, or even in our own markets, considering the expansion of the ‘new gray zone’ consisting of entities that do not comply with these regulations or find ways to circumvent them? We are not in favor of having no regulations, but we are concerned that EU decision-makers have perhaps gone too far in their efforts to regulate everything and in every circumstance. The changes are being introduced too quickly, and their consequences are not well thought

Strategy for Sustainable and Circular Textiles

The EU introduced its Strategy for Sustainable and Circular Textiles in 2022 to address both consumption and production of fashion products. The strategy outlines an ambitious vision of the fashion industry by 2030, summarized below.

MATERIALS

All textile products on the EU market will be durable, repairable, and recyclable, primarily made from recycled fibers, free of hazardous substances, and produced with respect for social rights and the environment.

Fast fashion will become obsolete, replaced by high-quality, affordable textiles that last longer.

Profitable reuse and repair services will be widely available, and the textile industry will be competitive, resilient, and innovative.

Manufacturers will take responsibility for their products and support recycling throughout the entire value chain.63

Responsible AI Explainable and transparent systems

Framework to develop AI systems that work for the good, going beyond algorithmic fairness and bias to identify the potential effects of the technology on safety, privacy, and society

Designing, developing, deploying, or operating AI systems that are explainable, as required: the purpose and goals of the system, how it was developed, and how outcomes are reached

Environmental and social impact

AI systems are designed to promote positive, sustainable impact and avoid creating or perpetuating adverse effects on society and the environment

Organizations and individuals designing, developing, deploying or operating AI systems are responsible for their outcomes and their appropriate, effective use

Fairness and equity

AI systems are designed to be inclusive, identify and mitigate sources of bias, and promote fair outcomes

Safety, security, and well-being

AI systems are designed to empower, preserve the authority, and ensure the well-being of humans developing, deploying, and using the system

Policies are in place to comply with applicable data privacy laws, and minimize and mitigate potential privacy risks

While sustainability regulations have been evolving for some time, providing a foundation for environmental stewardship in the fashion industry, AI regulations are a more nascent area. Ethical use, transparency, safety, security, and privacy are critical themes of the AI regulatory framework. The Boston Consulting Group’s Build for the Future survey shows a significant gap in the AI maturity of scaling and future-built fashion companies and stagnating and emerging fashion companies. Only 19% of Fashion and Luxury companies exhibit strong responsible AI capabilities, which includes the development of transparent AI systems that balance ethical considerations with privacy and security.64 This dispa-

rity stems from the historical lack of comprehensive AI regulations, enabling companies with more resources and strategic foresight to advance their AI capabilities.65

Nevertheless, all companies across the fashion sector must prepare to comply with rapidly emerging AI regulations and develop transparent AI use cases. In 2023, AI policy and regulation shifted from a niche, technical subject to one making headlines in the news. It was a pivotal year for policy development, culminating in the European Union agreeing upon its first comprehensive AI law at the beginning of 2024.66

The EU AI Act: The world’s most extensive AI rules

The EU AI Act is the regulatory and legal framework for AI within the EU that covers all types of AI across a wide range of sectors. The AI Act came into force on August 1, 2024 and is founded in five key principles outlined below.67

RISK-BASED CLASSIFICATION

AI systems and applications are to be classified based on their level of risk, spanning across unacceptable to high to limited risk. Unacceptable risk applies to AI systems that pose a significant threat to fundamental rights. High-risk systems are those used in critical areas like recruitment, credit scoring, and law enforcement and are subject to stringent requirements. Limited and minimal risk systems are subject to lighter transparency obligations and are largely left unregulated.

TRANSPARENCY AND ACCOUNTABILITY

FAIRNESS AND NON-DISCRIMINATION

PRIVACY AND DATA PROTECTION

SAFETY AND SECURITY

AI systems must be designed to be transparent and explainable. Companies are required to maintain detailed records of their AI systems, including the training data used and the methodologies applied.

AI systems must be trained and tested with representative data sets to minimize biases and ensure fairness.

The protection of personal data must align with existing data protection laws, including the General Data Protection Regulation.

High-risk AI systems must meet stringent safety

Non-compliance with the AI Act can result in significant fines, up to 6% of global annual turnover.68 Fashion companies using AI for customer insights, inventory management, and personalized marketing must ensure their AI systems are transparent and welldocumented to comply with the new regulations and avoid financial and reputational risks. It is also necessary for companies to conduct regular risk assessments and implement measures to mitigate potential security threats associated with AI systems.69

DRIVING SUCCESS WITH STRATEGIC SYNERGIES

As the fashion industry faces increasing pressure to adapt to a rapidly changing world, a strategic focus on both sustainability and technological innovation is essential. The rise of sustainability and tech-driven titans within the indus-

try showcases how multifocal strategies lead to success. Forward-thinking companies like Hugo Boss, Adidas, ON Running, Answear, and Tommy Hilfiger are integrating cutting-edge technology with robust sustainability practices, creating a new paradigm for fashion that prioritizes both ethical considerations and technological advancements.

THE HUGO BOSS SMART FACTORY

Hugo Boss, a leading global fashion brand, has taken significant strides to integrate technology and sustainability into its operations. One of the company’s most notable initiatives is the establishment of its smart factory in Izmir, Turkey. The Hugo Boss smart factory is a state-of-the-art facility that employs cutting-edge technology to streamline production processes and promote sustainable practices. This facility represents a pivotal move toward enhancing production efficiency, ensuring sustainability, and leveraging advanced technologies to remain competitive in the rapidly evolving fashion industry. The factory serves as a model for how technology can be harnessed to drive efficiency, reduce environmental impact, and improve working conditions. Standout features and technologies of the factory span three spheres outlined below.

Automation and robotics. The Hugo Boss smart factory extensively uses automation and robotics to handle repetitive and labor-intensive tasks, including the use of automated guided vehicles.70

Data analytics and AI. Advanced data analytics and AI are used to predict maintenance needs, optimize production schedules, and improve product quality. Predictive maintenance helps prevent equipment failures, reducing downtime and maintenance costs. AI-driven insights enable the factory to adapt to changing market demands quickly, ensuring that production aligns with consumer preferences.71

Sustainable practices. Hugo Boss is committed to sustainability and its smart factory reflects this ethos. The facility minimizes waste and energy consumption, employing energy-efficient machinery and systems to reduce the environmental footprint of the factory’s operations.72

CASE STUDY

ADIDAS’ COMMITMENT TO SUSTAINABILITY THROUGH AI

Adidas has emerged as a leader in sustainable initiatives within the sportswear industry. The company is committed to significantly reducing its environmental impact by setting ambitious internal targets, such as eliminating virgin polyester by 2024 and achieving carbon-neutral operations by 2050.

Adidas uses AI algorithms to enable informed decisions, analyzing extensive datasets related to materials and their environmental impact and predicting their suitability for various products. Sustainable sourcing is another dimension where AI plays a critical role. AI-driven supply chain analytics streamline material sourcing, helping Adidas identify suppliers that follow environmentally responsible practices and sustainable methods. This collaboration significantly reduces the ecological impact associated with raw materials. AI is also crucial to Adidas’ predictive maintenance and quality control, helping the company to identify and rectify issues early on and minimizing production errors and waste. This use of AI conserves resources and enhances product quality. AI-driven systems optimize energy consumption within manufacturing facilities, aligning production processes with eco-friendly principles. Adidas’ commitment to sustainable manufacturing, bolstered by its innovative use of AI, is a promising use case for the future of the fashion industry.73

CIRCULARITY IS A TEAM SPORT WITH ON RUNNING

ON Running, a Swiss-based athletic shoe and apparel company, has established itself as a leader in sustainability within the sportswear industry. The company aims to reduce waste and promote recycling by embracing the concept of a circular economy. Initiatives include the company’s Cyclon program, where high-performance products are designed to be recycled and reused. Used products can be returned to ON Running to be recycled and remade into new shoe parts, minimizing waste and resource consumption.74 The company also leverages advanced manufacturing techniques like precision engineering to optimize material use and minimize production waste. These methods ensure that the company maintains high standards of product quality while reducing its environmental impact.

CASE STUDY

ANSWEAR’S MULTIFACETED APPROACH TO SUSTAINABILITY AND TECHNOLOGY

Answear, a leading Polish-based online fashion retailer, is addressing the complex challenges of sustainability by integrating both eco-friendly practices and advanced technologies into its business model. With a focus on making a real impact rather than engaging in superficial “greenwashing,” Answear takes tangible steps to ensure its operations align with both environmental and social standards.

One of the company’s primary initiatives includes limiting its assortment to reputable brands that meet rigorous environmental and social criteria. This approach helps guarantee product quality and durability, as well as compliance with sustainability standards throughout the entire supply chain. As Krzysztof Bajołek, Answear’s founder and CEO, notes, Answear is committed to brands with a “high probability of meeting environmental and social standards throughout the entire supply chain, including production.”

Another company initiative in sustainability is the Creative Fashion Cycle, a collaboration with experts from INTU to upcycle defective clothing into unique, one-of-a-kind pieces. This effort reduces textile waste and also gives customers access to exclusive, reworked products instead of contributing to landfills. By extending the life cycle of garments, Answear is promoting a circular economy within the fashion industry. Answear is deeply committed to extending the life cycle of products, as is apparent through initiatives like Wear&Share, a recycling project launched in 2020. Krzysztof shares: “The main idea of the initiative is that reusing clothes is much more rational and environmentally friendly than discarding them, and joining the initiative by donating your unwanted clothes to us also supports the environmental initiative Czas Na

Las by the Aeris Futuro foundation, which involves planting trees to improve air quality. Since the initiative began, we have collected over 57 tons of clothing and planted 2,500 trees.”

On the technology front, AI plays a key role in enhancing operational efficiency. Answear uses AI for generating product descriptions, translating, assigning product attributes, and optimizing SEO content. “Currently, all content is still ultimately approved and possibly corrected by our employees, but in the future, after system improvements, we anticipate the independence of the tool, which should reduce the number of people needed for this task, allowing the remaining employees to be delegated to other tasks,” Krzysztof explains.

The company has also integrated ChatGPT 4.0 into its customer service operations, enabling its personnel to provide more consistent and high-quality responses, thereby improving customer satisfaction. On top of that, AI also supports in programming the proprietary e-commerce platform of the company. Through these multifaceted efforts, Answear demonstrates a comprehensive and proactive approach to sustainability, showcasing how innovation in both technology and eco-conscious practices can drive meaningful change.

CASE STUDY

DIGITALIZING THE DESIGN PROCESS WITH TOMMY HILFIGER

Renowned global fashion brand Tommy Hilfiger is at the forefront of integrating advanced technologies to enhance its sustainability and operational efficiency. The company is leveraging Generative AI to fully digitalize its design process, thereby reducing its carbon footprint and accelerating its speed to market. Generative AI enables the creation of digital prototypes of new clothing designs that can be adjusted and refined without the need for physical samples, significantly reducing material waste. The AI algorithms simulate fabric behavior and fit, allowing designers to visualize how a garment will look and move before it is produced.

The digitalization of design processes results in a 30% carbon footprint reduction.75 This is achieved by minimizing the need for physical samples, reducing transportation emissions, and lowering energy consumption in the design phase. Meanwhile, the company’s speed to market has increased, enabling the brand to respond more swiftly to fashion trends and consumer demands, while the digital workflow is streamlining the entire design-to-production cycle and cutting down on lead times.76

MULTIFOCAL STRATEGY AS A DRIVER OF SUSTAINABLE INNOVATION

The fashion industry is standing at the nexus of innovation and responsibility, with advanced technologies like AI-driven design and blockchain-backed supply chains transforming how fashion is created and consumed. This technological evolution must align with increasingly stringent regulatory landscapes. For fashion companies, achieving a sustainable future in the industry requires a multifaceted approach that balances innovation, regulatory compliance, and a commitment to environmental stewardship. By adopting a multifocal strategy, fashion brands can innovate responsibly, build resilience, and secure their place in the future of fashion.

keytakeaways

The seamless integration of AI-driven design and blockchain-backed supply chains is essential to revolutionizing design, customer engagement, and production methodologies.

Embedding sustainability is paramount for cost efficiency and minimizing environmental impact, yet fewer than 5% of companies are currently implementing advanced sustainability practices.

A multifocal strategy that successfully integrates sustainability with technological innovation is crucial for fashion industry success.

Pioneering fashion leaders recognize the value of localization as a tool to address sustainability and consumer trends. These fashion brands are taking concrete action to redesign their supply chains, moving beyond the sole paradigm of cost efficiency to make supply chains more sustainable, local, and carbon neutral. On the consumer front, fashion leaders recognize an evolution is occurring. More than ever, strategic partnerships are necessary to meet the diversity of today’s consumers, spanning from a desire for personalized digital experiences to sustainability concerns to an appreciation for local craftsmanship.

LOCAL VERSUS GLOBAL DYNAMICS

THE NEW ECO-FASHION SUPPLY CHAIN

MAIN PRODUCT SITE PROCESS INTEGRAL TO PRODUCTION

ENHANCEMENTS TO PRODUCT FABRIC AND COMPONENTS

The fashion industry is a significant contributor to the global carbon footprint, responsible for up to 10% of global GHG emissions.78 If it were a country, the industry would rank as the world’s fifth-largest emitter, just behind China, the United States, India, and Russia.79 A substantial share of this number can be traced back to the production process, in particular long and resource-intensive supply chains.80 At a typical fashion company, approximately two-thirds of all Tier 3 emissions can be assigned to the supply chain—of these emissions, Sourcing accounts for 10% to 20%, Manufacturing for 20% to 30%, and Logistics for 20% to 30%.81

MATERIALS

FACTORY THAT CUTS, SEWS, FINISHES, AND SHIPS BRAND PRODUCTS

PROVIDER OF ONE OR MORE PROCESSES, SUCH AS STITCHING, CUTTING, PACKING, QUALITY CONTROL, OR WAREHOUSES

PROVIDER OF ONE OR MORE PROCESSES, SUCH AS PRINTING, DYEING, LAUNDRY, OR EMBROIDERY

FABRIC MILLS, TANNERIES, HARDWARE, AND TRIMS

TEXTILE FIBERS, NATURAL AND MANMADE MATERIALS

Considering the inherent complexity of fashion companies’ operating models, the industry’s significant carbon footprint can be attributed to a multitude of factors, one being cost efficiency. A recent BCG study reveals that cost management is a top priority for most C-suite executives seeking to address lingering economic, financial, and geopolitical concerns.82 As many as 65% of interviewed executives highlighted manufacturing and supply chain as a central cost initiative allowing their business to maintain its edge over competitors. While rigorous cost management allows businesses to thrive in times of economic uncertainty, it often leads to compromises in the field of sustainability and GHG emissions. This is visible across the three core emission buckets of Sourcing, Manufacturing, and Logistics highlighted above.

Sourcing emissions are predominantly attributed to a heavy reliance on cheap-to-manufacture but highly polluting materials that significantly impact the environment. Synthetic fabrics like polyester, polyamide, nylon, and lycra are derived from petrochemical oil, contributing to 40% of the textile industry’s GHG emissions due to the energy-intensive oil extraction and processing. Additionally, wool production is a major source of methane, with each sheep emitting around 30 liters of this greenhouse gas daily.83

Manufacturing emissions are closely linked to the industry’s high energy use. Currently, the industry consumes more energy than the aviation and shipping industries combined.84,85 The industry’s sizable energy consumption is a direct byproduct of shifting production processes to locations with low labor costs and loose environmental regulations. Currently, up to two-thirds of textiles used in the clothing industry are manufactured in developing countries—predominantly China, India, Vietnam, and Indonesia—that all rely on energy sources with high carbon footprints.86

Logistic emissions are a direct product of long supply chains that often stretch around multiple countries and continents to minimize overall costs. Raw materials are oftentimes grown, processed, sewn, and sold all in different locations, collectively contributing to the significant carbon footprint of industry logistics.87

It is imperative that the fashion industry take immediate action to decrease its carbon footprint. If no improve-

ECO-FASHION SUPPLY CHAIN

ment is made, the fashion industry’s GHG emissions will surge more than 50% by 2030, jeopardizing the ambitious goals put forth by the Paris Agreement.88 The dire global warming situation has led to significant societal pressure for sustainable practices, complemented by stringent regulations in many developed countries. A recent study shows that 85% of respondents have adopted more sustainable purchasing behaviors in the past five years. Younger generations are a driving force behind this trend, with one-third of Gen-Z and Millennials willing to pay more for sustainable fashion.89 Sustainability aspirations are further amplified by strict regulatory pressure in developed countries, such as the EU’s Corporate Sustainability Reporting Directive. This directive requires large corporates to report on the social and environmental performance of the activities across their value chain. As a result of this mandate, pioneering fashion brands are taking concrete actions to move beyond the sole paradigm of cost efficiency and redesign their supply chains to be more sustainable, local, and carbon neutral. Going forward, we foresee the remainder of the industry following suit, consciously and collectively supporting the industry’s decarbonization goals.

MAPPING THE NEW ECO-FASHION SUPPLY CHAIN

The future of fashion lies in the new eco-fashion supply chain. Our blueprint for business success in this new era of environmentalism is informed by a focused sample of pioneering brands selected for analysis based on their size, geographic presence, and adoption of sustainability practices, alongside the full scope of their operations.

HYPER-LOCALIZED AND SUSTAINABLE SOURCING

To be future-ready, fashion companies must drastically shift sourced materials toward sustainable alternatives. Leaders of the fashion revolution have already embraced innovative environmental practices. Patagonia has nearly doubled its share of recycled materials sourced to reach 66% in 2021, while Lululemon is actively transforming its production processes by prioritizing sustainable fibers and materials, with a focus on synthetic fibers, responsibly sourced cotton, and other natural materials.90 Lululemon’s commitment to sustainability is further visible through the use of recycled polyester sourced from post-consumer packaging, significant investments in plant-based nylon via a partnership with sustainability startup Geno, and sourcing regeneratively farmed cotton.91 The necessity of a multifocal strategy is not lost on fashion-forward companies. To succeed in the future of fashion, brands need to adopt a new collaboration model with suppliers that complements permanent global collections with localized ones. This approach will involve releasing hyper-localized collections that utilize local materials and garments. To-date, such practices have only been adopted on a small scale. For example, as part of its broader Move to Zero campaign, Nike has launched a re-creation program in London, Paris, and Los Angeles. The program aims to promote circular fashion by utilizing locally sourced vintage and deadstock materials to create new, unique garments, while also minimizing waste and reducing carbon emissions.92

Sustainability strategies put forth must be backed by company oversight, with brands engaging in a hand-in-hand partnership with their suppliers to support them in reducing GHG emissions. Adidas has adopted this model, requiring its suppliers to set science-based targets approved by the SBTi by 2024 and build in-house capacity for tracking emissions.93 Suppliers are also encouraged to adopt clean energy solutions, including rooftop solar, renewable energy PPAs, and other low-carbon technologies, aiming for a coal phase-out by 2025.94

SMART AND SUSTAINABLE MANUFACTURING

Fashion companies with foresight will significantly enhance their energy efficiency by reducing reliance on high-emission energy sources and expanding the use of solar and wind energy technologies. Industry leaders are already making sizeable steps in this direction—as of Nike’s latest reporting period, 96% of supply chain electricity used comes from renewable sources, corresponding to a 70% absolute reduction in GHG Tier 3 emissions.95 Adopting new technologies is also crucial to further reduce GHG emissions in the production process. H&M is an innovative example of a company leveraging AI for streamlined assortment planning. The brand’s algorithm analyzes customer demand changes, stock levels, and available garments to avoid overproduction, significantly reducing its carbon footprint.96

GREEN LOGISTICS PROCESS

Companies with a growth mindset recognize the importance of decarbonizing their logistics network as part of their sustainability strategy. This includes gradually phasing out air freight in favor of sea transportation, placing a greater emphasis on the use of sustainable fuels, and investing significant resources to electrify last-mile delivery. Industry pioneers are already taking these steps. In 2021, Lululemon established an Air Freight Management Task Force to shift transportation from air to ocean freight. The company is also advancing the use of sustainable aviation fuel and biofuels for ocean freight as well as piloting electric vehicles for last-mile delivery in Canada.97 In addition to decarbonizing logistics networks, companies need to revamp delivery packaging and make it 100% recyclable. Notably, Pepco, PVH, and ASOS have all committed to achieving 100% recyclable packaging, with Pepco implementing a sustainable packaging policy that includes a goal to reduce packaging material by 20% by 2025 and use 30% recycled materials in packaging.98,98 Steps in sustainable packaging are also being taken by global powerhouse Nike, which piloted an alternative delivery method for its sneakers in 2023 that reduced packaging waste by over 50% annually.100

UNLOCKING SUPPLY CHAIN EXCELLENCE WITH TRACKING, CIRCULAR DESIGN, AND IN-HOUSE R&D

Apart from direct actions to reduce their carbon footprint resulting from supply chain operations, companies with a future-first mentality will take a range of adjacent activities to further reduce their carbon footprints in the future. Tracking, monitoring, and reporting on the full scope of carbon emissions provides companies with a particularly valuable data set. Patagonia is pioneering this field and has reported on Tier 1, Tier 2, and Tier 3 emissions since 2018, reducing its total GHG emissions by nearly 40% during this period.101 In the future, brands will fully report all their Tier 1, Tier 2, and Tier 3 emissions, as well as take active steps to map those corresponding to Tier 4 and Tier 5. ASOS has already mapped and regularly publishes updated lists of its Tier 1, Tier 2, and Tier 3 suppliers. By 2030, ASOS aims to achieve full transparency of its supply chain across all five tiers.102

Brands will also have dedicated in-house teams focused on pioneering R&D efforts to drive innovative sustainability solutions across the supply chain. H&M has already taken such steps, establishing dedicated functions and teams to advance its sustainability targets. The company’s Circular Innovation Lab supports innovations from early stages to commercial production, integrating them across the organization and supply chain. The Laboratory, H&M’s innovation hub, researches and tests new circular business models. H&M Group Ventures invests in emerging technologies to enable a circular fashion industry.104

Adopting a circular business model extends to embracing circular design practices. Proactive steps must be taken to prevent overproduction by embracing circular design, making garments more durable, and reducing the need for cyclical replacement of fashion. H&M has developed a comprehensive circular fashion ecosystem that integrates sustainability into all parts of its value chain, focusing on circular customer journeys, circular products, and circular supply chains. Key company initiatives to support this ecosystem include aligning supply and demand with AI and tech tools, creating circular design guidelines, and aiming for 100% sustainably sourced or recycled materials by 2030. On the production side, H&M invests in innovative processes to reduce water, energy, and chemical use. The company also acts as a sustainability advocate, providing use and care advice to extend product life, offering repair services, and increasing access to resale and rental services. H&M embodies the vision of industry-wide investment in a sustainable fashion future, collaborating with industry partners to advance recycling technologies and infrastructure to ensure textiles are reused and recycled at their highest value.

CHAMPIONING A CIRCULAR SUPPLY CHAIN

As we move into 2025, the fashion industry must address its significant environmental footprint. To meet the growing demand for sustainable practices, it is necessary to adopt a new eco-fashion supply chain model that aims to reduce its carbon footprint through innovative and localized strategies. This transformation is essential for ensuring a sustainable and responsible fashion future.

keytakeaways

The future fashion supply chain will focus on increasing the use of recycled and responsibly sourced options, including plant-based nylon and regeneratively farmed cotton.

Energy efficiency will be crucial, with supply chains sourcing most of their electricity from renewable sources and adopting AI to streamline production and reduce emissions.

Future logistics will focus on decarbonization by shifting from air to ocean freight, adopting sustainable fuels, and investing in electric vehicles for last-mile delivery.

Future supply chains will be underpinned by comprehensive tracking, circular design, and in-house R&D for full transparency and innovation.

WINNING THE FASHION GAME

NEW DYNAMICS IN CONSUMER PREFERENCES

Consumers today exhibit diverse and evolving preferences, significantly impacting the fashion industry. In one respect, there’s a strong preference toward digital innovation and virtual connection, driven by technological advancements and the attraction of virtual experiences. Yet, at the same time, there’s a growing appreciation for sustainability and craftsmanship, reflecting a desire for a deeper connection with a product’s origins and a greater understanding of its cultural significance. These dual trends in consumer preferences are shaping the multifocal strategies of both global and local fashion brands.

THE VALUE OF VIRTUAL CONNECTION

As the digital age evolves, consumers are increasingly seeking out immersive ways to engage with brands. A growing segment of tech-savvy consumers is drawn to the convenience, customization, and novelty offered by virtual platforms. These consumers enjoy the ability to explore and purchase fashion in digital environments, where AI-enhanced recommendations and virtual try-ons dictate a new standard for shopping. This trend will only intensify in the future. The integration of NFTs and Web3 technologies is revolutionizing ownership and exclusivity in fashion.105 Consumers at the forefront of fashion and technology are increasingly attracted to digital garments and accessories that can be owned uniquely as NFTs, offering them a piece of fashion as well as a collectible asset that can appreciate in value.106 Meanwhile, Web3 facilitates a decentralized marketplace where these digital assets can be traded on blockchain platforms, enhancing the security and transparency of transactions.107 These platforms serve as social spaces as well as marketplaces, where trends are set and discussed in real-time by global audiences. Web3 enables communities to operate with greater autonomy and security, empowering users to create and participate in events and transactions without centralized control.

Interest in virtual communities is particularly strong among the younger generation, presenting a significant opportunity for fashion brands to capture and engage this demographic through innovative online communities and integrated real-world benefits. Boston Consulting Group’s Membership Program Survey, conducted in 2022, indicates that 56% of consumers are interested in joining or already belong to an online community, with 54% of these consumers indicating access to practical and functional benefits as a primary reason to join.108 Key motivators for this demographic of consumers include exclusive apparel, access to special events, and interaction with other community members. Notably, 21% of respondents indicate NFTs or other digital products as an incentive to join an online community. This demonstrates the power of bridging digital-only NFTs with real-world benefits to create utility beyond the digital asset itself.109

DRIVERS OF CONSUMER

interest in online communities

“How interested would you be in participating in an online membership that allows you to be part of a community and gives you access to exclusive content?”

SIGNIFICANT INTEREST IN ONLINE COMMUNITIES… … PRIMARILY DRIVEN BY UTILITY AND BENEFITS 56% of consumers are interested in joining or already belong to an online community Access to real-world utility and benefits

SOMEWHAT UNINTERESTED

UNINTERESTED

The importance of digital excellence in driving fashion sales cannot be overstated. Consumers demand superior digital experiences, as evidenced by the BCG report Fast-Moving Tech–Fast-Paced Fashion. This report reveals that nearly 75% of polled customers aged 18 to aged 34 prefer online-savvy brands.110

To build strong customer loyalty, brands must excel in digital engagement and provide personalized experiences. Agnieszka Jaworska, Pepco Group’s Commercial Director, recognizes this shift: “In a highly competitive market, customer loyalty is the highest value. Delivering a good product, collection, price, and service cements loyalty, but it is also important to personalize the customer experience, get to know them better, and respond to

“What are the primary reasons that you would subscribe to an online community?”

their individual needs.” Pepco Group’s mobile app strives to execute on these company goals, increasing proximity to the customer and enabling the company to meet their needs more effectively.

THE RISE OF LOCAL CULTURE AND CRAFTSMANSHIP

The fashion industry today is marked by the dominance of mass production, with fast fashion rapidly expanding. While the apparel market is set to grow by less than 25% between 2021 and 2027, from $1.6 trillion to $1.9 trillion, fast fashion is projected to more than double from $91 billion to $183 billion in this same time frame.111 However, amidst this overwhelming presence of mass production, there is a significant countertrend

emphasizing the importance of local brands. Consumers are increasingly seeking deeper connections to the origins of their purchases. Local brands those available within a particular geographic area and culturally connected with the domestic market are gaining momentum. A distinct preference for traditional craftsmanship has appeared in recent years, as more people seek to support local economies and sustainable practices by purchasing quality products that hold cultural connection and display artisan skill. Additionally, sustainable practices are increasingly important to consumers—BCG research suggests that 38% of consumers polled have already switched from a preferred brand to a brand that is more sustainable.112 The demand for transparency in the production process is on the rise. Consumers are highly interested and knowledgeable about production conditions, including the sourcing of raw materials, the manufacturing steps, and the labor practices involved. Production transparency fosters trust and builds a connection between the consumer, the artisan, and the community. As a result of consumer trends toward localization, artisan workshops and local brands—whose commitment to sustainability and ethical practices is often a core aspect of their identity—are thriving.

INCORPORATING LOCAL TOUCH AND BUILDING DIGITAL COMMUNITIES

In today’s fast-paced fashion world heavily driven by evolving consumer preferences, global fashion brands must adopt multifocal strategies to expand their consumer bases and maintain a competitive edge. Recognizing this imperative, global giants are increasingly integrating traditional craftsmanship and local cultural elements into their product lines to appeal to culturally conscious consumers. As a global leader in the sportswear industry, Adidas continually seeks innovative ways to remain culturally relevant and refresh its classic offerings. Recognizing the power of local art, Adidas collaborated with three local artists from the African continent in 2023 to redesign its iconic Samba sneakers.113

Simultaneous to local approaches, global fashion brands are also leveraging advanced technologies that resonate with digital natives to dominate virtual settings. These brands are creating immersive online communities in the Metaverse, utilizing virtual reality and augmented reality for interactive shopping experiences, and adopting NFTs and Web3 technologies to offer exclusive digital products. This dual approach allows global brands to maintain cultural relevance and authenticity while expanding their reach and engagement in the digital realm.

ADIDAS’ INTRODUCTION

OF LOCAL LEGENDS TO GLOBAL SPHERES

Adidas is an innovator in trendsetting and recognizes the value in bringing a local touch to its global brand. In 2023, the company selected three local artists from different regions of Africa, each known for their distinct artistic styles and cultural influences. Falko One is a Cape Town-born graffiti artist, Naledi Tshegofatso Modupi is known for her portraiture works, and Kabelo Kungwane represents the intersection between South African football, art, and design. The artists were chosen based on their artistic credibility, local influence, and connection to the cultural narratives of their respective regions. They were given creative freedom to redesign the Samba sneakers and encouraged to incorporate elements that reflected their cultural heritage and personal artistic styles. The collaboration was about telling a story through the product that aligned with local sentiments and global aesthetics. Each artist brought a unique blend of colors, patterns, and materials to the sneakers that were then produced in limited quantities to maintain exclusivity. Adidas worked closely with these artists to ensure that the designs remained true to both the artists’ visions and the brand’s identity.

Global luxury players are also adapting to trending consumer preferences. Dior has made significant investments in craftsmanship through collaborations with the Chanakya School of Craft, an esteemed institution dedicated to preserving and promoting traditional Indian craftsmanship. This collaboration was showcased during the 2023 Mumbai fashion show, presenting artworks that highlighted the spectacular traditional handcrafts of India such as Rajastha-

ni embroidery and Mughal-era zari silver and gold thread embroidery. On the other end of the consumer preference spectrum, Gucci is embracing the opportunities and challenges of the digital era by using the Metaverse for consumer engagement, loyalty, and community building. A powerhouse of creativity and innovation, the luxury brand is setting new standards of excellence in the digital fashion landscape.114

GUCCI BRINGS PHYSICAL HERITAGE TO THE METAVERSE

In May 2021, Gucci became the first luxury brand to launch an NFT. In the same month, the fashion leader opened the Gucci Garden Experience in Roblox, an online gaming community that allows users to design, create, and play games. Gucci followed this digital venture with the 2022 release of its first experience in The Sandbox, a leading decentralized gaming world that allows players to connect their crypto wallets to acquire digital, blockchain-based assets. Gucci Vault Land was open for a limited time and served as a landing space for all of Gucci’s Multiverse and Web3 efforts, including curated NFT artwork and Gucci’s own NFTs.

One of the most recent and remarkable examples of Gucci’s digital strategy is the launch of Gucci Cosmos Land in 2023, a digital experience set in The Sandbox aimed at building an immersive digital community. Innovative features of Gucci Cosmos Land include a digital interpretation of the physical Gucci Cosmos exhibit, which serves as a journey through the brand’s 102-year history, showcasing its history, values, and vision. Unlike its physical counterpart, the digital version of the exhibit lets all attendees wear Gucci in avatar form, with avatars extending beyond physical limitations to represent users’ personal mood and fashion sensibilities. Gucci Cosmos Land creates a unique opportunity for users to experience Gucci’s fashion in a new, immersive way. The platform also invites visitors to complete interactive quests and collect rewards. This gamification element enhances user engagement, while NFTs and digital assets like exclusive collectibles enhance the digital experience and foster a sense of exclusivity and belonging among digital community members.

LEARNING FROM LOCAL LEGENDS

Unlike their global counterparts, local brands are deeply rooted in their cultural heritage, often offering products that reflect local traditions and ethical practices. By leveraging direct consumer interactions and fostering strong community ties, local brands create a sense of belonging and loyalty that larger brands often struggle to achieve.

Local brands also benefit from the proximity to their customers and the ability to personalize offerings to meet regional trends and preferences. Local brands are leaders of the multifocal future of fashion, preserving cultural narratives while also promoting a more sustainable and community-centric fashion industry.

In line with this ethos, Ukrainian fashion brand Bevza incorporates elements of Ukrainian culture and heritage into its designs. The brand is renowned for its minimalist yet deeply symbolic collections, often drawing inspiration from traditional Ukrainian motifs and craftsmanship including spikelet elements, red viburnum berries, and Kozukh inspirations. “Our spikelet jewelry pieces are immensely popular among Ukrainians, both in Ukraine and in the diaspora. The spikelet has become a symbol of Ukrainian identity. When someone sees you wearing spikelet earrings, they recognize that you are Ukrainian or support Ukraine. This makes me incredibly proud, as it allows me to spread Ukrainian values through my brand,” shares Svitlana Bevza. The brand works closely with Ukrainian artisans to revive and preserve Ukrainian craftsmanship.

While traditional craftsmanship and local engagement are the focus of local brands, they also recognize the potential of digital platforms. Local brands are utilizing accessible digital tools to create strong connections with their audiences. For example, Instagram played a significant role at the beginning of Chylak’s brand existence and continues to support the brand today. Instagram helps local brands reach a wider audience and allows for direct interaction and engagement with customers, enabling both a digital presence and local community building.

Chylak celebrates Polish cultural heritage in product offering

Polish fashion brand Chylak has gained significant recognition for its high-quality leather goods, particularly handbags. Founded by Zofia Chylak, the brand emphasizes a design philosophy deeply rooted in cultural ethos and authenticity, defining brand identity. Zofia has a very sentimental nature, often reflecting on the past with her modern accessories. The history of Polish regional fashion serves as a great source of inspiration for the brand—In a previous collection, Zofia drew inspiration from Polish mountain region Podhale. For the brand’s 2024 collection, Zofia travels to the north region of Poland with her designs, incorporating characteristic elements of Żywiec embroidery tradition like ribbons and edging patterns into the collection’s lizard-textured leathers.115 The Chylak Heritage collection features hand-sewn and embroidered collars and ruffles. In an era of mass production, the brand emphasizes the artistry of hand craftsmanship—each collar requires several days of careful work.

I simply have the opportunity to showcase what excites and moves me most in Poland. It turns out that this greatly attracts people, that people identify with it, that people have a great need to speak beautifully about Polish traditions and to highlight them. And it seems to me that this creates some kind of connection with these customers, that it’s not just, ‘Hey, I made this bag, please buy it,’ but there’s smething more. There’s a credibility and authenticity in each piece.

*Zofia’s personal touch on products and the brand’s authenticity and high level of transparency in the production process builds consumer trust and creates a sense of local community. Zofia shares, “I put my own story into products, my heart, and this makes people attach themselves in some way, because they can identify with the story I create, that we have quite a lot of these Polish threads. I feel like I create community.”

NAVIGATING THE FASHION LANDSCAPE OF TOMORROW

Observing the strategies of both global giants and local legends, it is clear that a multifocal approach that embraces technological advancements and emphasizes local aspects and craftsmanship in product offering is essential for long-term success in the fashion industry.

keytakeaways

The Fashion industry is shaped by both a strong preference for digital innovation and a growing appreciation for craftsmanship and sustainability, reflecting diverse consumer preferences.

Emphasizing local craftsmanship and cultural heritage is crucial for local brands to connect deeply with consumers and promote loyalty.

Combining advanced digital strategies with personalized, localized elements will ensure that brands remain relevant and competitive.

AS ZOFIA PUTS IT:

The transformative juncture of the fashion industry is marked by a confluence of challenges and opportunities. Disruptions in supply chains, evolving consumer behaviors, and increasing regulatory pressures are reshaping the landscape. Companies must navigate these complexities to sustain and grow in a competitive market.

In this dynamic environment, several key trends rise to the surface, serving as a strategic roadmap for companies. Technological advancements, particularly in artificial intelligence and wearable technology, are revolutionizing the industry. Rising consumer expectations drive the need for high-quality, sustainable, and ethical products and processes. Optimizing supply chains through automation and sustainable practices is essential to reduce production costs and meet consumer demands efficiently. The industry is at a pivotal point where technology and sustainability are converging to shape the future. A multifocal approach that balances digital advancements with local and ethical production practices is crucial for lon-

g-term success. While the future of fashion may appear polarized between technological innovation and sustainability, the reality is far more multifaceted. The industry’s evolution will create space for diverse approaches where global brands, local artisans, cutting-edge technology, and traditional craftsmanship can all coexist and thrive. It is not a zero-sum game; rather, the industry’s strength will lie in its diversity and ability to integrate multiple perspectives and practices. By focusing on sustainability, embracing innovation, engaging consumers, optimizing supply chains, and adhering to new regulations, fashion companies can navigate current challenges and emerge as leaders in a dynamic market.

Winning with tomorrow’s fashion playbook

To excel in tomorrow’s competitive landscape, fashion companies will need to adopt multifocal strategies.

FOCUSING ON SUSTAINABILITY

EMBRACING TECHNOLOGICAL INNOVATIONS

ENHANCING CONSUMER ENGAGEMENT

Adopting circular fashion models and investing in sustainable materials. Focusing on reducing companies’ carbon footprint across all operations, from sourcing to logistics, and implementing sustainable practices that comply with environmental regulations.

Further integrating GenAI into business processes across the entire value chain, such as for predictive analytics, design acceleration, supply chain optimization, and sales and marketing activities. Unlocking employee time for strategic and creative tasks by leveraging GenAI tools.

Building and nurturing online communities to foster brand loyalty and engagement. Utilizing digital marketing strategies to reach and engage with tech-savvy consumers. Implementing personalized digital experiences that cater to individual consumer preferences.

OPTIMIZING SUPPLY CHAINS

ADAPTING TO REGULATORY CHANGES

Automating and streamlining production and logistics processes to reduce costs and increase efficiency. Exploring nearshoring and local production to mitigate supply chain risks and lower environmental impact. Using AI to enhance supply chain transparency and traceability, ensuring ethical and sustainable sourcing.

Developing a robust compliance framework to navigate evolving regulations. Proactively investing in technologies and practices that meet or exceed regulatory standards. Engaging with policymakers and industry bodies to stay informed about upcoming regulations and influence policy development.

BALANCING PERSONALIZATION AND PRIVACY

PROMOTING LOCAL AND ETHICAL PRODUCTION

LEVERAGING GOVERNMENT SUPPORT

Using consumer data responsibly to offer tailored experiences while ensuring data privacy and security. Being transparent with customers about how their data is used and protected. Implementing robust data governance practices to build trust and maintain compliance with privacy regulations.

Highlighting the use of local craftsmanship and ethical production processes in your marketing. Developing hyper-localized collections that resonate with local consumer preferences and cultural heritage. Engaging in storytelling to create a deeper connection with consumers and differentiate your brand.

Utilizing government incentives and support programs to boost capabilities and expand market presence. Engaging in public-private partnerships to drive innovation and sustainable growth. Advocating for policies that support the fashion industry’s evolution toward sustainability and technological advancement.

AUTHORS AND CONTRIBUTORS

OKTAWIAN ZAJĄC

MANAGING DIRECTOR AND SENIOR PARTNER, BCG WARSAW

PATRYCJA KRÓL PRINCIPAL, BCG WARSAW

ANNA GŁUCHOWSKA

SENIOR ASSOCIATE, BCG WARSAW

ANNA KHARKOVETS

SENIOR ASSOCIATE, BCG WARSAW

EMILIA MOSKAŁA ASSOCIATE, BCG WARSAW

GABRIELA POTĘPA CONSULTANT, BCG WARSAW

IRYNA NEKHAICHUK

SENIOR ASSOCIATE, BCG WARSAW

JULIA DUCH ASSOCIATE, BCG WARSAW

JAKUB BOROWY ASSOCIATE, BCG WARSAW

MAGDALENA KOSSAKOWSKA-MAZUR

SENIOR MANAGER, BCG X

MARTA SOBIECKA CONSULTANT, BCG WARSAW

MICHELLE WIERZCHOWSKA SPECIALIST, BCG PLATINION

MIKOŁAJ BARTYZEL

SENIOR ASSOCIATE, BCG WARSAW

SANDRA PRĘTCZYŃSKA CONSULTANT, BCG WARSAW

AGNIESZKA SZER-ANDRZEJCZAK

HEAD OF COMMS, BCG WARSAW

NATALIA MITUNIEWICZ MARKETING & COMMUNICATIONS SENIOR SPECIALIST, BCG WARSAW

KASIA JORDAN

CHAIRWOMAN AND PUBLISHER, VOGUE POLSKA

ZUZANNA KRZĄTAŁA

SUSTAINABILITY MANAGER, VOGUE POLSKA

SZYMON MACHNIKOWSKI

MARKETING DIRECTOR, VOGUE POLSKA

JOWITA MICHNIOWSKA

PROJECT MANAGER, VOGUE POLSKA

STEFANIA KOLANOWSKA ART DIRECTOR, VOGUE POLSKA

PIOTR PIROWSKI GRAPHIC DESIGNER, VOGUE POLSKA

We would also like to give special recognition to Stefania Kolanowska, who is responsible for the creation of memorable AI-generated images that we have incorporated into the report.

The authors wish to extend their deepest gratitude to the many BCG experts whose vast knowledge and insights were instrumental in shaping the quality of this report.

Special thanks are due to Alan Iny and Luc de Brabandere for inspiring us to think beyond conventional boundaries while exploring future scenarios for the fashion industry, and to Paul Michelman for his invaluable editorial guidance.

We are particularly grateful to Lisa Schmittecker and Joanna Dłutowska for their expert support and industry knowledge in fashion.

We also acknowledge the critical contributions of BCG X’s AI specialists, especially Marcin Drużkowski, whose engagement played a pivotal role in this project. A special mention goes to Anna Grzęda and Sandra Macionczyk for their dedicated efforts in bringing this project to fruition.

We would like to thank the representatives from various companies who generously shared their unique perspectives, which significantly enriched the content of this report.

Finally, our sincere thanks to Ewelina Kołodziej from Vogue Polska for her valuable support in our research.

CONTACT

For any questions or further information regarding this report, please contact the authors directly or reach out via: warsustainability@bcg.com & sustainability@vogue.pl

SOURCES

1. BLOOMBERG, OECD-FAO AGRICULTURAL OUTLOOK, US BUREAU FOR LABOR STATISTICS (2024). BCG ANALYSIS

2. OXFORD ECONOMICS, WTO (2024). BCG ANALYSIS. NOTE: UNIT WAGE COST INDEX FOR MANUFACTURING, 2015=100; UNIT WAGE COST=COMPENSATION PER HOUR/OUTPUT PER HOUR; MARKET SHARE IS EQUAL TO THE VALUE OF TEXTILE EXPORTS IN 2021

3. SHANGHAI SHIPPING EXCHANGE (2024). BCG ANALYSIS. NOTE: CHINA CONTAINERIZED FREIGHT INDEX

4. OECD (2024). BCG ANALYSIS. NOTE: OECD CONSUMER BAROMETER, WHICH CORRESPONDS TO THE MONTHLY GROWTH RATE OF THE NORMALIZED CONSUMER CONFIDENCE INDICATOR (CCI)

5. BCG (2024). BCG MEGATRENDS LIBRARY. BCG RESOURCES

6. OXFORD ECONOMICS, OECD, BLOOMBERG, WTO, PRESS ARTICLES, INCL. BUSINESS OF FASHION, WWD, FASHION NETWORK, VOGUE BUSINESS, FASHION UNITED, BCG ANALYSIS

7. EUROPEAN PARLIAMENT (2020). THE IMPACT OF TEXTILE PRODUCTION AND WASTE ON THE ENVIRONMENT (INFOGRAPHICS). RETRIEVED FROM HTTPS://WWW.EUROPARL.EUROPA.EU/TOPICS/EN/ARTICLE/20201208STO93327/THE-IMPACT-OF-TEXTILE-PRODUCTION-AND-WASTE-ON-THE-ENVIRONMENT-INFOGRAPHICS

8. EUROPEAN PARLIAMENT (2020). THE IMPACT OF TEXTILE PRODUCTION AND WASTE ON THE ENVIRONMENT (INFOGRAPHICS). RETRIEVED FROM HTTPS://WWW.EUROPARL.EUROPA.EU/TOPICS/EN/ARTICLE/20201208STO93327/THE-IMPACT-OF-TEXTILE-PRODUCTION-AND-WASTE-ON-THE-ENVIRONMENT-INFOGRAPHICS

9. TEXTILE EXCHANGE (2023). MATERIALS MARKET REPORT 2023. RETRIEVED FROM HTTPS://TEXTILEEXCHANGE.ORG/KNOWLEDGE-CENTER/REPORTS/MATERIALS-MARKET-REPORT-2023/

10. IMPACTFUL NINJA (2023). HOW SUSTAINABLE ARE POLYESTER FABRICS? A LIFE-CYCLE ANALYSIS. RETRIEVED FROM HTTPS://IMPACTFUL.NINJA/HOW-SUSTAINABLE-ARE-POLYESTER-FABRICS/

11. EUROPEAN PARLIAMENT (2020). THE IMPACT OF TEXTILE PRODUCTION AND WASTE ON THE ENVIRONMENT (INFOGRAPHICS). RETRIEVED FROM HTTPS://WWW.EUROPARL.EUROPA.EU/TOPICS/EN/ARTICLE/20201208STO93327/THE-IMPACT-OF-TEXTILE-PRODUCTION-AND-WASTE-ON-THE-ENVIRONMENT-INFOGRAPHICS

12. TRVST (2021). ENVIRONMENTAL IMPACT OF COTTON FROM GROWING, FARMING & CONSUMING. RETRIEVED FROM HTTPS://WWW. TRVST.WORLD/SUSTAINABLE-LIVING/FASHION/ENVIRONMENTAL-IMPACT-OF-COTTON/

13. BCG (2021). SUSTAINABLE MATERIALS IN FASHION. RETRIEVED FROM BCG RESOURCES

14. MYCELIUM SOCIETY (2021). MUSHROOM LEATHER: THE FUTURE OF VEGAN LEATHER. RETRIEVED FROM HTTPS://WWW.MYCELIUMSOCIETY.COM/2021/07/12/MUSHROOM-LEATHER-FUTURE-OF-VEGAN-LEATHER.HTML

15. PVH (2022). PVH CORP. AND HSBC PARTNER ON FIRST SUSTAINABLE SUPPLY CHAIN FINANCE PROGRAM TIED TO ENVIRONMENTAL AND SOCIAL FACTORS. RETRIEVED FROM HTTPS://PVH.COM/NEWS/PVH-HSBC-PARTNERSHIP

16. EUROPEAN PARLIAMENT (2024). THE IMPACT OF TEXTILE PRODUCTION AND WASTE ON THE ENVIRONMENT (INFOGRAPHICS). RETRIEVED FROM HTTPS://WWW.EUROPARL.EUROPA.EU/TOPICS/EN/ARTICLE/20201208STO93327/THE-IMPACT-OF-TEXTILE-PRODUCTION-AND-WASTE-ON-THE-ENVIRONMENT-INFOGRAPHICS

17. BCG (2023). AI USE CASES. RETRIEVED FROM BCG RESOURCES

18. FABRICDNA (2024). THE INDITEX WAY: ACHIEVING SUCCESS WITH AI IN FAST FASHION. RETRIEVED FROM HTTPS://FABRICDNA.AI/BLOG/ THE-INDITEX-WAY-ACHIEVING-SUCCESS-WITH-AI-IN-FAST-FASHION

19. CLO3D (2024). CHANGING THE WORLD WITH VIRTUAL GARMENTS. RETRIEVED FROM: HTTPS://WWW.CLO3D.COM/EN/

20. H&M GROUP (2021). RESPONSIBLE AI, IS BETTER AI. RETRIEVED FROM HTTPS://HMGROUP.COM/OUR-STORIES/RESPONSIBLE-AI-IS-BETTER-AI/

21. MAISON META (2024). ABOUT US. RETRIEVED FROM HTTPS://MAISONMETA.IO/ABOUT/

22. BUSINESS OF FASHION (2023). WHAT REALLY WENT INTO CASABLANCA’S AI-GENERATED MARKETING CAMPAIGN. RETRIEVED FROM HTTPS://WWW.BUSINESSOFFASHION.COM/ARTICLES/TECHNOLOGY/WHAT-REALLY-WENT-INTO-CASABLANCAS-AI-GENERATED-MARKETING-CAMPAIGN/

23. BCG (2024). AI AT WORK 2024: FRIEND AND FOE. RETRIEVED FROM HTTPS://WWW.BCG.COM/PUBLICATIONS/2024/AI-AT-WORK-FRIEND-FOE

24. BCG (2024). AI AT WORK 2024: FRIEND AND FOE. RETRIEVED FROM HTTPS://WWW.BCG.COM/PUBLICATIONS/2024/AI-AT-WORK-FRIEND-FOE

25. SURVEY CONDUCTED BY BCG (JULY 2024, 750 RESPONDENTS)

26. THE BUSINESS OF FASHION (2024). WHAT’S DRIVING EASTERN EUROPE’S FASHION TECH BOOM. RETRIEVED FROM HTTPS://WWW.BUSINESSOFFASHION.COM/ARTICLES/GLOBAL-MARKETS/WHATS-DRIVING-EASTERN-EUROPES-FASHION-TECH-BOOM/

27. WIFITALENTS (2024). TARGETED ADVERTISING STATISTICS: 63% OF CONSUMERS PREFER PERSONALIZED ADS. RETRIEVED FROM HTTPS://WIFITALENTS.COM/STATISTIC/TARGETED-ADVERTISING/

28. TRUSTCASSIE (2024). DATA PRIVACY WEEK 2024: DO CONSUMERS CARE ABOUT THEIR DATA?, RETRIEVED FROM HTTPS://TRUSTCASSIE. COM/RESOURCES/BLOG/DATA-PRIVACY-WEEK-DO-US-CONSUMERS-CARE-ABOUT-THEIR-DATA/

29. PERSUASION NATION (2024). 65 SHOCKING PERSONALIZATION STATISTICS FOR SMART MARKETERS. RETRIEVED FROM HTTPS://PERSUASION-NATION.COM/PERSONALIZATION-STATISTICS/

30. BCG INTERVIEW WITH GOOGLE POLAND (2024). FEATURED FURTHER IN THE REPORT

31. VOGUE BUSINESS (2024). A YEAR OF GENERATIVE AI AND PHYGITAL DROPS: HOW DID GUCCI DIFFERENTIATE. RETRIEVED FROM HTTPS://WWW.VOGUEBUSINESS.COM/STORY/TECHNOLOGY/A-YEAR-OF-GENERATIVE-AI-AND-PHYGITAL-DROPS-HOW-DID-GUCCI-DIFFERENTIATE

32. APPETITE CREATIVE (2023). THE RISE OF DATA-DRIVEN PERSONALISATION IN THE FASHION INDUSTRY. RETRIEVED FROM HTTPS://WWW. LINKEDIN.COM/PULSE/RISE-DATA-DRIVEN-PERSONALISATION-FASHION-INDUSTRY-APPETITECREATIVE

33. MAURICE BRETZFIELD (2023). AI IN PERSONALIZED MARKETING: TRANSFORMING CONSUMER ENGAGEMENT IN 2024. RETRIEVED FROM HTTPS://WWW.LINKEDIN.COM/PULSE/AI-PERSONALIZED-MARKETING-TRANSFORMING-CONSUMER-2024-BRETZFIELD-9XWPC

34. BCG (2020). PERSONALIZATION IN FASHION & LUXURY. RETRIEVED FROM BCG RESOURCES

35. BCG (2020). PERSONALIZATION IN FASHION & LUXURY. RETRIEVED FROM BCG RESOURCES

36. BCG (2020). PERSONALIZATION IN FASHION & LUXURY. RETRIEVED FROM BCG RESOURCES

37. BCG INTERVIEW WITH INPOST PAY (2024). FEATURED FURTHER IN THE REPORT

38. BCG INTERVIEW WITH GOOGLE POLAND (2024). FEATURED FURTHER IN THE REPORT

39. STITCH FIX (2023). HOW WE’RE REVOLUTIONIZING PERSONAL STYLING WITH GENERATIVE AI. RETRIEVED FROM HTTPS://NEWSROOM. STITCHFIX.COM/BLOG/HOW-WERE-REVOLUTIONIZING-PERSONAL-STYLING-WITH-GENERATIVE-AI/

SOURCES

40. TRUSTCASSIE (2024). DATA PRIVACY WEEK 2024: DO CONSUMERS CARE ABOUT THEIR DATA. RETRIEVED FROM HTTPS://TRUSTCASSIE. COM/RESOURCES/BLOG/DATA-PRIVACY-WEEK-DO-US-CONSUMERS-CARE-ABOUT-THEIR-DATA/

41. JUST-STYLE MAGAZINE (2023). FASHION DIGITISATION NEEDS GREATER CYBERSECURITY. RETRIEVED FROM HTTPS://JUSTSTYLE.NRIDIGITAL.COM/JUSTSTYLE_MAGAZINE_JUN23/FASHION_SECTOR_DIGITISATION_DEMANDS_GREATER_CYBERSECURITY

42. BCG INTERVIEW WITH GOOGLE POLAND (2024). FEATURED FURTHER IN THE REPORT

43. KANTAR RESEARCH (MAY, 2024)

44. EUROMONITOR (2024). APPAREL AND FOOTWEAR STATISTICS. RETRIEVED FROM HTTPS://WWW.PORTAL.EUROMONITOR.COM/STATISTICSEVOLUTION/INDEX

45. FASHION COMMISSION (2024). SAUDI 100 BRANDS. RETRIEVED FROM HTTPS://SAUDI100BRANDS.COM/

46. EUROPEAN COMMISSION (2024). EU STRATEGY FOR SUSTAINABLE AND CIRCULAR TEXTILES. RETRIEVED FROM HTTPS://ENVIRONMENT. EC.EUROPA.EU/STRATEGY/TEXTILES-STRATEGY_EN#:~:TEXT=THE%20EU%20STRATEGY%20FOR%20SUSTAINABLE%20AND%20CIRCULAR%20TEXTILES,ECONOMY%20ACTION%20PLAN%20AND%20THE%20EUROPEAN%20INDUSTRIAL%20STRATEGY

47. THE FABRIC ACT (2022). TAKE ACTION TO REPAIR FASHION. RETRIEVED FROM HTTPS://THEFABRICACT.ORG/

48. THE NATIONAL LAW REVIEW (2023). NEW YORK’S FASHION SUSTAINABILITY AND SOCIAL ACCOUNTABILITY ACT – ROUND 2 UNDERWAY. RETRIEVED FROM HTTPS://NATLAWREVIEW.COM/ARTICLE/NEW-YORK-S-FASHION-SUSTAINABILITY-AND-SOCIAL-ACCOUNTABILITY-ACT-ROUND-2-UNDERWAY

49. EUROMONITOR (2024). APPAREL AND FOOTWEAR STATISTICS. RETRIEVED FROM HTTPS://WWW.PORTAL.EUROMONITOR.COM/STATISTICSEVOLUTION/INDEX

50. FASHION COMMISSION (2023). STATE OF THE FASHION REPORT. RETRIEVED FROM HTTPS://SAUDI-FASHION-CO.OBJECTS.FRB.IO/2023_ SAUDI_STATE_OF_FASHION_REPORT.PDF

51. BCG INTERVIEW WITH SAUDI FASHION COMMISSION (2024)

52. WWD (2023). FIRST RIYADH FASHION WEEK POSITIONS SAUDI ARABIA AS MIDDLE EAST HUB FOR FASHION AND DESIGN. RETRIEVED FROM HTTPS://WWD.COM/FASHION-NEWS/DESIGNER-LUXURY/IYADH-FASHION-WEEK-POSITIONS-SAUDI-ARABIA-AS-MIDDLE-EAST-HUB-FOR-FASHION-AND-DESIGN-1235910158/

53. BUSINESS OF FASHION (2024). WHAT’S DRIVING EASTERN EUROPE’S FASHION-TECH BOOM. RETRIEVED FROM HTTPS://WWW.BUSINESSOFFASHION.COM/ARTICLES/GLOBAL-MARKETS/WHATS-DRIVING-EASTERN-EUROPES-FASHION-TECH-BOOM/?UTM_SOURCE=NEWSLETTER_DAILYDIGEST&UTM_MEDIUM=EMAIL&UTM_CAMPAIGN=DAILY_DIGEST_260624&UTM_CONTENT=INTRO

54. POLISH AGENCY FOR ENTERPRISE DEVELOPMENT (2022). CZY POLSKIE FIRMY ZAWOJUJĄ RYNEK TECHNOLOGII VR I AR. RETRIEVED FROM HTTPS://WWW.PARP.GOV.PL/COMPONENT/CONTENT/ARTICLE/81451:CZY-POLSKIE-FIRMY-ZAWOJUJA-RYNEK-TECHNOLOGII-VR-I-AR

55. BCG (2023). BUILD FOR THE FUTURE FASHION & LUXURY – DEFINING THE FUTURE OF FASHION & LUXURY AND HOW COMPANIES CAN ACHIEVE SUCCESS. RETRIEVED FROM BCG RESOURCES

56. BCG (2023). BUILD FOR THE FUTURE FUTURE-BUILT COMPANIES EMBRACE SUSTAINABILITY. RETRIEVED FROM BCG RESOURCES

57. BCG (2022). BUILD FOR THE FUTURE SURVEY. RETRIEVED FROM BCG RESOURCES

58. BCG (2024). BUILD FOR THE FUTURE ASSESSMENT – BOOSTING (GEN)AI, DIGITAL, AND TECH. RETRIEVED FROM BCG RESOURCES

59. BCG (2023). BUILD FOR THE FUTURE C-LEVEL GENAI SURVEY. RETRIEVED FROM BCG RESOURCES

60. BCG (2024) BUILD FOR THE FUTURE (BFF)XDAIXGENAI GLOBAL STUDY 2024. QUESTION: HOW DOES YOUR COMPANY FARE ON THE BELOW OVERARCHING DIGITAL AND AI METRICS? RETRIEVED FROM BCG RESOURCES

61. BUSINESS OF FASHION (2024). THE YEAR AHEAD: WHAT TO EXPECT AS NEW SUSTAINABILITY RULES ROLL IN. RETRIEVED FROM HTTPS://WWW.BUSINESSOFFASHION.COM/ARTICLES/SUSTAINABILITY/THE-STATE-OF-FASHION-2024-REPORT-SUSTAINABILITY-REGULATIONS-EU-FASHION-VALUE-CHAIN/

62. BUSINESS OF FASHION (2024). THE YEAR AHEAD: WHAT TO EXPECT AS NEW SUSTAINABILITY RULES ROLL IN. RETRIEVED FROM HTTPS://WWW.BUSINESSOFFASHION.COM/ARTICLES/SUSTAINABILITY/THE-STATE-OF-FASHION-2024-REPORT-SUSTAINABILITY-REGULATIONS-EU-FASHION-VALUE-CHAIN/

63. DELOGUE (2023). SUSTAINABLE FASHION: HOW THE EU TEXTILE LEGISLATION IMPACTS THE CLOTHNNG INDUSTRY. RETRIEVED FROM HTTPS://WWW.DELOGUE.COM/EN/BLOG/SUSTAINABLE-FASHION

64. BCG (2022). BUILD FOR THE FUTURE SURVEY. QUESTION: TO WHAT EXTENT ARE THE FOLLOWING AI DIMENSIONS TRACKED? SCALE:1-5. RETRIEVED FROM BCG RESOURCES

65. BCG (2023). BUILD FOR THE FUTURE FASHION & LUXURY – DEFINING THE FUTURE OF FASHION & LUXURY AND HOW COMPANIES CAN ACHIEVE SUCCESS. RETRIEVED FROM BCG RESOURCES

66. TECHNOLOGY REVIEW (2024). WHAT’S NEXT FOR AI REGULATION IN 2024. RETRIEVED FROM HTTPS://WWW.TECHNOLOGYREVIEW. COM/2024/01/05/1086203/WHATS-NEXT-AI-REGULATION-2024/

67. EU ARTIFICIAL INTELLIGENCE ACT (2024). HIGH-LEVEL SUMMARY OF THE AI ACT. RETRIEVED FROM HTTPS://ARTIFICIALINTELLIGENCEACT.EU/HIGH-LEVEL-SUMMARY/

68. DENTONS (2024). THE NEW EU AI ACT – THE 10 KEY THINGS YOU NEED TO KNOW NOW. RETRIEVED FROM HTTPS://WWW.DENTONS. COM/EN/INSIGHTS/ARTICLES/2023/DECEMBER/14/THE-NEW-EU-AI-ACT-THE-10-KEY-THINGS-YOU-NEED-TO-KNOW-NOW

69. DENTONS (2024). THE NEW EU AI ACT – THE 10 KEY THINGS YOU NEED TO KNOW NOW. RETRIEVED FROM HTTPS://WWW.DENTONS. COM/EN/INSIGHTS/ARTICLES/2023/DECEMBER/14/THE-NEW-EU-AI-ACT-THE-10-KEY-THINGS-YOU-NEED-TO-KNOW-NOW

70. HUGO BOSS (2024). INDUSTRY 4.0 IN PRACTICE. RETRIEVED FROM HTTPS://GROUP.HUGOBOSS.COM/EN/NEWSROOM/STORIES/SMART-FACTORY-IN-IZMIR

71. APPAREL RESOURCES (2020). A LOOK INSIDE HUGO BOSS SMART FACTORY. RETRIEVED FROM HTTPS://APPARELRESOURCES.COM/ TECHNOLOGY-NEWS/MANUFACTURING-TECH/LOOK-INSIDE-HUGO-BOSS-SMART-FACTORY/

72. HUGO BOSS (2024). CLIMATE PROTECTION. RETRIEVED FROM HTTPS://GROUP.HUGOBOSS.COM/EN/SUSTAINABILITY/PLANET/CLIMATE-PROTECTION

73. LINKEDIN (2023). SUSTAINABLE MANUFACTURING WITH AI: ADIDAS’ ECO-FRIENDLY INITIATIVES. RETRIEVED FROM HTTPS://WWW.LINKEDIN.COM/PULSE/SUSTAINABLE-MANUFACTURING-AI-ADIDAS-ECO-FRIENDLY-KHAOULA-WAHIDAL-0DGXE

74. ON (2024). CYCLONTM. RETIRIVED FROM HTTPS://WWW.ON.COM/EN-DE/COLLECTION/CYCLON

75. THE FABRICANT VIA MEDIUM (2021). MAKING FACTS FASHIONABLE AGAIN. THE FABRICANT ESTIMATES THAT DIGITAL SAMPLES REPLACING PHYSICAL GARMENTS DURING DESIGN AND DEVELOPMENT PHASES CAN REDUCE THE BRAND’S CARBON FOOTPRINT BY UP TO 30%. RETRIEVED FROM HTTPS://THEFABRICANT.MEDIUM.COM/MAKING-FACTS-FASHIONABLE-AGAIN-32951B13D9A5

76. JING DAILY (2023). AI’S ROLE AS FASHION DESIGN ASSISTANT: TOMMY HILFIGER, AI FASHION WEEK, AND TEXT-TO-DESIGN. RETRIEVED FROM HTTPS://JINGDAILY.COM/POSTS/ARTIFICIAL-INTELLIGENCE-FASHION-DESIGN-ASSISTANT-TOMMY-HILFIGER-MIDJOURNEY

77. ASOS (2023). ASOS SIGNS ELLEN MACARTHUR FOUNDATION’S NEW PLASTICS ECONOMY GLOBAL COMMITMENT. RETRIEVED FROM HTTPS://WWW.ASOSPLC.COM/NEWS/ASOS-SIGNS-ELLEN-MACARTHUR-FOUNDATIONS-NEW-PLASTICS-ECONOMY-GLOBAL-COMMITMENT/

78. EARTHDAY.ORG (2023). EARTH DAY: THE OFFICIAL SITE. RETRIEVED FROM HTTPS://WWW.EARTHDAY.ORG/

79. COMMON OBJECTIVE (2023). FASHION INDUSTRY - ENERGY | SUSTAINABILITY ISSUES. RETRIEVED FROM HTTPS://WWW.COMMONOBJECTIVE.CO/ARTICLE/ENERGY

80. UNFCCC (2018). UN HELPS FASHION INDUSTRY SHIFT TO LOW CARBON. RETRIEVED FROM HTTPS://UNFCCC.INT/NEWS/UN-HELPS-FASHION-INDUSTRY-SHIFT-TO-LOW-CARBON

81. SCOPE USED INTERCHANGEABLY WITH TIER. NOTE: BCG PROJECT EXPERIENCE

82. BCG (2023). WHAT LEADERS ARE SAYING ABOUT COSTS AND GROWTH IN 2024. RETRIEVED FROM HTTPS://WWW.BCG.COM/PUBLICATIONS/2023/WHAT-LEADERS-ARE-SAYING-ABOUT-COSTS-AND-GROWTH-IN-2024

83. CLEAN PLANET (2023). THE MOST POLLUTING FABRICS. RETRIEVED FROM HTTPS://BLUE-SKINCARE.COM/THE-MOST-POLLUTING-FABRICS

84. UNFCCC (2018). UN HELPS FASHION INDUSTRY SHIFT TO LOW CARBON. RETRIEVED FROM HTTPS://UNFCCC.INT/NEWS/UN-HELPS-FASHION-INDUSTRY-SHIFT-TO-LOW-CARBON

85. NATURE (2022). HOW FAST FASHION CAN CUT ITS STAGGERING ENVIRONMENTAL IMPACT. RETRIEVED FROM HTTPS://WWW.NATURE. COM/ARTICLES/D41586-022-02914-2

86. GEEKSFORGEEKS (2024). TOP 10 CLOTHING MANUFACTURING COUNTRIES IN THE WORLD. RETRIEVED FROM HTTPS://WWW.GEEKSFORGEEKS.ORG/TOP-10-CLOTHING-MANUFACTURING-COUNTRIES-IN-THE-WORLD

87. GOOD ON YOU (2023). WHAT ON EARTH IS A CLOTHING SUPPLY CHAIN? RETRIEVED FROM HTTPS://GOODONYOU.ECO/WHAT-ON-EARTH-IS-A-CLOTHING-SUPPLY-CHAIN

88. FASHION TAKES ACTION (2023). DECARBONIZING THE FASHION INDUSTRY. RETRIEVED FROM HTTPS://FASHIONTAKESACTION.COM/ DECARBONIZING-THE-FASHION-INDUSTRY

89. SNOWKAP (2023). CONSUMER POTENTIAL: WILLINGNESS TO PAY FOR SUSTAINABLE PRODUCTS. RETRIEVED FROM HTTPS://SNOWKAP. COM/CONSUMER-POTENTIAL-WILLINGNESS-TO-PAY

90. PATAGONIA (2021). BCORP REPORT. RETRIEVED FROM HTTPS://WWW.PATAGONIA.COM/2021-BCORP-REPORT-UPDATED-2-15-22.PDF

91. LULULEMON (2022). IMPACT REPORT. RETRIEVED FROM HTTPS://CORPORATE.LULULEMON.COM/~/MEDIA/FILES/L/LULULEMON/OUR-IMPACT/REPORTING-AND-DISCLOSURE/LULULEMON-2022-IMPACT-REPORT.PDF

92. NIKE BE (2023). NIKE RE-CREATION. RETRIEVED FROM HTTPS://WWW.NIKE.COM/BE/NIKE-RE-CREATION

93. SCIENCE BASED TARGETS INITIATIVE (2023). PARTNERSHIP BETWEEN UNITED NATIONS & CDP THAT HELPS COMPANIES SET GREENHOUSE GAS REDUCTION GOALS ALIGNED WITH CLIMATE SCIENCE. RETRIEVED FROM HTTPS://SCIENCEBASEDTARGETS.ORG/

94. NIKE (2023). IMPACT REPORT. RETRIEVED FROM HTTPS://WWW.NIKE.COM/A/NIKE-IMPACT-REPORT-2023

95. NIKE (2023). IMPACT REPORT. RETRIEVED FROM HTTPS://WWW.NIKE.COM/A/NIKE-IMPACT-REPORT-2023

96. H&M GROUP (2023). ANNUAL AND SUSTAINABILITY REPORT 2023. RETRIEVED FROM HTTPS://HMGROUP.COM/ANNUAL-AND-SUSTAINABILITY-REPORT-2023/

97. LULULEMON (2022). IMPACT REPORT. RETRIEVED FROM HTTPS://CORPORATE.LULULEMON.COM/~/MEDIA/FILES/L/LULULEMON/OUR-IMPACT/REPORTING-AND-DISCLOSURE/LULULEMON-2022-IMPACT-REPORT.PDF

98. PEPCO (2023). PACKAGING POLICY V1.1. RETRIEVED FROM HTTPS://PEPCO.PL/WP-CONTENT/UPLOADS/2023/10/PEPCO-PACKAGING-POLICY-V1.1.PDF

99. PVH (2022). CORPORATE RESPONSIBILITY REPORT. RETRIEVED FROM HTTPS://PVH.COM/-/MEDIA/FILES/PVH/RESPONSIBILITY/PVH-CR-REPORT-2022.PDF

100. NIKE (2023). NIKE’S ONE BOX CUTS PACKAGING IN HALF. RETRIEVED FROM HTTPS://WWW.NIKE.COM/A/NIKES-ONE-BOX-CUTS-PACKAGING-IN-HALF

101. PATAGONIA (2021). BCORP REPORT. RETRIEVED FROM HTTPS://WWW.PATAGONIA.COM/2021-BCORP-REPORT-UPDATED-2-15-22.PDF

102. ASOS (2023). ASOS SIGNS ELLEN MACARTHUR FOUNDATION’S NEW PLASTICS ECONOMY GLOBAL COMMITMENT. RETRIEVED FROM HTTPS://WWW.ASOSPLC.COM/NEWS/ASOS-SIGNS-ELLEN-MACARTHUR-FOUNDATIONS-NEW-PLASTICS-ECONOMY-GLOBAL-COMMITMENT/

103. FASHION REVOLUTION (2022). FASHION TRANSPARENCY INDEX 2022. RETRIEVED FROM HTTPS://ISSUU.COM/FASHIONREVOLUTION/ DOCS/FTI_2022

104. H&M GROUP (2023). SUSTAINABILITY REPORTING. RETRIEVED FROM HTTPS://HMGROUP.COM/SUSTAINABILITY-REPORTING/

105. LINKEDIN (2024). WEB3 AND NFTS: ELEVATING THE LUXURY EXPERIENCE THROUGH DIFFERENTIATION AND INNOVATION. RETRIEVED FROM HTTPS://WWW.LINKEDIN.COM/PULSE/WEB3-NFTS-ELEVATING-LUXURY-EXPERIENCE-THROUGH-TRAN-DUY-MAI-ANH-Y4LIC/

106. MEDIUM (2023). THE RISE OF NFTS AND THE NEED FOR NFT MARKETPLACE PLATFORMS ON DIFFERENT NICHE. RETRIEVED FROM HTTPS://MEDIUM.COM/ILLUMINATION/NFT-MARKETPLACE-PLATFORMS-ON-DIFFERENT-NICHE-842FBF0AD124

107. MEDIUM (2023). WEB3 GAMING MARKETPLACE – THE FUTURE OF GAMING IS DECENTRALIZED. RETRIEVED FROM HTTPS://MEDIUM. COM/NFTDAILYDOSE/WEB3-GAMING-MARKETPLACE-THE-FUTURE-OF-GAMING-IS-DECENTRALIZED-81816A185597

108. BCG (2022). BCG MEMBERSHIP PROGRAM CONSUMER SURVEY (3045 SURVEY RESPONDENTS). RETRIEVED FROM HTTPS://WWW.BCG. COM/PUBLICATIONS/2023/WEB3-CUSTOMER-LOYALTY-PROGRAM-OPPORTUNITIES

109. BCG (2023). WEB3 OPENS NEW PATHS TO CUSTOMER LOYALTY. RETRIEVED FROM HTTPS://WWW.BCG.COM/PUBLICATIONS/2023/ WEB3-CUSTOMER-LOYALTY-PROGRAM-OPPORTUNITIES

110. BCG (2024) FAST-MOVING TECH – FAST-PACED FASHION. RETRIEVED FROM HTTPS://WWW.BCG.COM/PUBLICATIONS/2024/FAST-MOVING-TECH-FAST-PACED-FASHION-WEAVING-THE-FABRIC-OF-THE-FUTURE

111. STATISTA (2023). REVENUE OF THE APPAREL MARKET WORLDWIDE FROM 2018 TO 2028. RETRIEVED FROM HTTPS://WWW.STATISTA. COM/FORECASTS/821415/VALUE-OF-THE-GLOBAL-APPAREL-MARKET

112. BCG (2023). REMARKING FASHION & LUXURY FOR SUSTAINABILITY. RETRIEVED FROM HTTPS://WWW.BCG.COM/INDUSTRIES/RETAIL/ FASHION-INDUSTRY

113. IOL (2023). LOOK: ADIDAS COLLABORATES WITH 3 LOCAL ARTISTS TO LAUNCH THEIR SAMBA SNEAKERS. RETRIEVED FROM HTTPS:// WWW.IOL.CO.ZA/LIFESTYLE/STYLE-BEAUTY/FASHION/LOOK-ADIDAS-COLLABORATES-WITH-3-LOCAL-ARTISTS-TO-LAUNCH-THEIR-SAMBA-SNEAKERS-E86C674D-2C3B-4900-B0FF-ECEC74322D52

114. INTERNET RETAILING (2023). GUCCI: THE RETAIL PIONEER OF THE METAVERSE. RETRIEVED FROM HTTPS://INTERNETRETAILING.NET/ CASE-STUDIES/GUCCI-THE-RETAIL-PIONEER-OF-THE-METAVERSE/ 115. VOGUE (2024). PREMIEROWO NA VOGUE.PL: KOLEKCJA CHYLAK NA SEZON WIOSNA-LATO 2024. RETRIEVED,FROM HTTPS://WWW. VOGUE.PL/A/KOLEKCJA-POLSKIEJ-MARKI-CHYLAK-NA-SEZON-WIOSNA-LATO-2024