Rising costs, inflation, and economic uncertainty are challenging the global retail and fashion industry, leading to shifts in consumer behavior and company strategies. While a cyclical slowdown is evident, McKinsey’s 2025 State of Fashion report highlights an increase in ethical purchasing habits, growing consumer awareness, and evolving sustainability efforts by brands.
Julie Holt, Global Business and Exhibitions Director for the International Expo Group and organizer of the Global Sourcing Expo, emphasizes these changes, noting that shifting buying patterns are visible across major markets. “While year-on-year growth continues in key regions like the US and Europe in both luxury and non-luxury categories, the slowdown from the peak in 2021 is evident. Meanwhile, China is experiencing marginal growth in the non-luxury sector but a decline in luxury sales,” she says.
Economic confidence and reduced overseas spending have impacted China’s luxury fashion sector, with Bain & Company reporting an 18-20 per cent decline in 2024. In response to these market conditions, retailers and brands must understand generational preferences to attract consumers effectively.
How different generations shop
Baby Boomers (52-plus): Affluent and financially stable, this group spends more on fashion than younger consumers. They value quality and prefer in-store shopping but are increasingly adopting digital platforms. Reports indicate that over-65s also allocate significant spending to travel, leveraging higher interest rates to boost their disposable income. Holt highlights the need for retailers to prioritize user-friendly digital experiences to engage this audience.
Generation X (45-60): Known as ‘hybrid shoppers,’ Gen X values convenience and affordability. They balance online and in-store shopping and show interest in sustainable products if pricing is reasonable. Loyalty programs and personalized shopping experiences appeal to this group.
Millennials (28-43): Highly influenced by digital content, reviews, and peer recommendations, Millennials prioritize experiences over possessions. This generation is drawn to exclusive shopping destinations and subscription-based services such as fashion rentals and streaming. Holt notes that brands targeting Millennials should focus on curating unique and immersive shopping experiences.
Generation Z (13-28): Dominated by social media influence, Gen Z shops primarily via mobile devices and values convenience services like express shipping and free returns. They are price-conscious and less brand loyal, prioritizing quality and affordability. Thrifting and sustainable fashion appeal to them, as they seek unique, long-lasting pieces while supporting environmental causes.
Industry collaboration for future growth
Holt emphasizes the importance of industry collaboration in navigating these evolving trends. “Events like the Global Sourcing Expo play a key role in connecting brands, retailers, and industry professionals. They offer a platform for sharing insights, fostering partnerships, and addressing challenges together.”
With shifting consumer demands and economic pressures, adapting to generational preferences and fostering industry cooperation will be crucial for sustained growth in the retail and fashion sectors.
