Experts concede 2025 is looking challenging for the fashion industry but there are wins to be had for those exploring AI, sustainability and focusing on supply chain resilience.

During 2025, experts agree the outlook in general looks bleak and fashion brands and retailers will need to drain the small pool of opportunities that can result in big wins if leveraged correctly. Among the most popular suggestions from the industry experts quizzed by Just Style were greater investment in AI, digitalisation, more focused approaches toward sustainability, and building agility in the apparel supply chain.

Fashion opportunity in 2025: Harnessing AI and digitalisation

Apparel brands and retailers can no longer overlook the importance of AI and digitalising their operations. Technology is offering greater efficiencies including speed to market, accurate forecasting and waste reduction.

And with measures like higher tariffs coming in and pressuring the bottom line, brands and retailers risk exposure if they cannot find a counterbalance such as reduced inventories and increased speed to market.

Rick Horwitch, chief of sustainability and supply chain strategy at Bureau Veritas Consumer Services notes: “Digitising processes, harnessing the power of data and collaborative communications, and verification, when appropriate, will drive significant improvements in speed, cost, and quality and customer satisfaction, retention and acquisition.”

Randy Car, CEO and President of emblem and patch manufacturer World Emblem says AI-driven customisation is the next big wave for manufacturers and will dramatically transform the manufacturing sector in 2025. He warns those who don’t adopt this “innovative technology will soon be extinct.”

“Customers increasingly want personalised, high-quality products, and AI will empower manufacturers to deliver them efficiently and at scale. In 2025, we predict that over 70% of emblem orders will be customised using some form of AI, with AI streamlining both design and production to meet those demands.

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“Beyond customisation, AI will enhance predictive maintenance, quality control, and inventory forecasting, optimising the entire manufacturing flow. Those in manufacturing who integrate AI will likely reduce waste, cut costs, and improve customer satisfaction — critical factors in staying competitive, especially in a sector where customisation and quick turnaround are increasingly demanded.”

AI is something MAS Holdings has already been experimenting with. It is using digital twins for product creation and supply chain control towers to enhance responsiveness and efficiency. MAS Holdings chief operating officer, Shakthi Ranatunga, says “effective digital integration is key.”

Gen AI is another area fashion brands and retailers should be actively exploring. According to Matt Jeffers, CEO of Accenture, the technology can help businesses manage soaring costs, particularly in the value chain.

“To remain competitive, apparel firms should invest in their technology infrastructure across the entire business, from manufacturing to supply chain and sales. New fast-fashion brands are redefining the industry. Online-only brands are attracting younger generations with their AI-driven, bespoke-to-order systems, forcing traditional apparel retailers to find ways to be more agile and responsive to trends. These brands leverage advanced technology, such as Gen AI, to offer personalised shopping experiences, tailoring products to individual preferences and trends in real-time. This approach not only captures the attention of tech-savvy consumers but also allows these brands to quickly adapt to changing fashion trends and customer demands. Traditional fashion retailers must adopt similar technologies and strategies to stay competitive and meet evolving customer expectations in the fast-paced digital marketplace.”

It is a sentiment International Apparel Federation (IAF) secretary general Matthijs Crietee strongly agrees with: “Its success hinges on a solid grasp of the fundamentals of product design and development and an ability and willingness to invest in supply chain processes.  

“Ideally, in 2025 we will see an industry that, as a response to competition and legislation, is changing itself at the core, investing in processes, unlocking the huge potential of AI and freeing up capital to invest back in more sustainable and resilient supply chains.”

Fashion opportunity in 2025: Investing in sustainability

According to a recent report from Source Fashion, sustainability is slipping down the priority list for fashion executives, simply because, consumers aren’t demanding it as much as they once were.

But Carr argues it must remain a priority for fashion brands and retailers as consumers are now expecting it to come as standard.

Beyond this, he says businesses must be prepared to see more mandates around eco-friendly materials and waste reduction, especially in industries that often involve large-scale production.

“Integrating sustainable practices will no longer be a luxury but a necessity to remain competitive. By adopting energy-efficient processes, recycling materials, and minimising waste, companies are not just reducing their environmental footprint but also future-proofing their business.”

Gherzi Textil Organisation partner Robert P. Antoshak agrees noting firms must proactively adopt eco-friendly practices and be transparent about how these efforts can offer a competitive edge. 

Ranatunga says a commitment to sustainable practices is no longer optional and that firms must position themselves for future regulatory and consumer expectations, adding firms that act decisively in these areas will lead the industry forward.

Laura Beachy, VP of global marketing and communications at Thermore agrees adding it goes beyond just fashion and that brands have a moral responsibility to the environment to ensure they are delivering on sustainability.

“If we do not tackle these issues directly with intentionality, our ecosystem will continue to slowly deteriorate. It is our responsibility as leaders in the apparel industry to embrace significant transformations and face sustainability challenges head-on  while also balancing evolving consumer demands. Anticipating trends and developing advanced technological solutions are crucial for success.”

At a brand level, H&M is considered one of the leaders when it comes to sustainability. Leyla Ertur, head of sustainability at H&M says within the brand, there is a sense of urgency around meeting sustainability expectations which needs to translate across the wider industry. She calls for collaboration to knock down some of the barriers around sustainability.

“Our industry can only reach its climate goals and required emissions reductions if the challenges our industry is facing are tackled collaboratively. The effects of extreme climate events on societies and businesses are no longer hypothetical scenarios of the future, we see its impact already today. With an estimated 99% of total fashion brand emissions occurring in the supply chain, our industry needs to accelerate the transition to net zero by sharing the financial risks and responsibilities of transitioning to renewable energy sources in garment and textile factories.”

But Antoshak acknowledges the elephant in the room, noting the challenge of balancing sustainability and profitability which he says “remains “the industry’s albatross” and a concern for many companies.

Sheng Lu, professor of apparel studies at the University of Delaware, notes this point but says while it may be a con, there are several pros to be leveraged by exploring sustainability in greater depth.

He talks of the “countless opportunities” in offering “sustainable” apparel products and using “preferred sustainable fibres” for fashion companies to diversify their sourcing base and expand their vendor networks.

“For example, studies show that in the US market, China and many other Asian countries are not necessarily the top suppliers of clothing made with recycled materials. Instead, Europe and countries in the Western Hemisphere or even Africa present unique sourcing advantages and capacities due to the unique nature of such products. Therefore, in 2025, we can expect an ever-closer collaboration between design, product development, merchandising, sourcing, and legal teams within fashion companies, working together to meet the growing demand for sustainable apparel and ensuring compliance with evolving regulations.”

Fashion opportunity in 2025: Agile supply chains

More sustainable and resilient supply chains appear to be the goal across the board for 2025.

Beachy believes success will belong to companies that adapt quickly to change, embrace sustainability, and drive innovation.

“Those unable to update their business models or respond to market demands risk falling behind.”

It is unsurprising that building supply chain agility is front of mind for apparel brands and retailers, especially with global uncertainties keeping executives up at night. Since 2020, the fashion supply chain has grappled with the fallout of a global pandemic to soaring inflation, cost increases in energy resulting from global conflicts and the impact of trade policies on business.

Ranatunga says: “From raw material shortages to logistics disruptions, these challenges can ripple through production timelines, impacting both operational continuity and our ability to meet consumer demands. We’re addressing these concerns through diversified sourcing strategies and robust supplier partnerships.

“Weak suppliers are at greater risk of missed deliveries or even closures, which means brands must carefully choose partners with robust financial and operational stability. Collaborating with financially sound suppliers with a proven track record offers peace of mind that production is in reliable hands.  

“Partnering with full-service suppliers that handle everything from design to logistics can enable brands to focus on core growth areas while leaving the intricacies of production to trusted partners.  

“The defining factor between winners and losers in 2025 will be adaptability. Firms that can swiftly respond to shifts in sourcing dynamics, embrace digital transformation, and anticipate evolving consumer demands will secure a competitive edge.” 

By Just Style