What's Happening?
In October, The Business of Fashion (BoF) and The Business of Beauty convened industry leaders in Paris to discuss strategies for building brand equity amid economic pressures. The event, held at the Shangri-La, featured insights from BoF's director of content
strategy, Alice Gividen, and The Business of Beauty's executive editor, Priya Rao. The discussion highlighted the impact of macroeconomic pressures on consumer behavior, with a significant shift towards cost-conscious shopping. According to BoF's State of Fashion 2025 report, 64% of shoppers opted for cheaper alternatives in the third quarter of 2024, and over 70% planned to shop at outlets or off-price retailers in 2025. The conversation also touched on the importance of understanding and communicating value to consumers, especially as luxury brands face scrutiny over quality assurance.
Why It's Important?
The gathering underscores the significant challenges facing the fashion and beauty industries as they navigate a landscape marked by economic uncertainty and changing consumer preferences. With rising prices and tighter budgets, brands must adapt by redefining their value propositions and leveraging digital platforms to engage consumers. The shift towards online shopping, projected to account for over 30% of global beauty sales by 2030, highlights the need for brands to maintain a consistent digital presence. This evolution in consumer behavior presents both challenges and opportunities for brands to innovate and capture market share in a competitive environment.
What's Next?
As brands continue to adapt to these economic challenges, the focus will likely remain on enhancing digital engagement and exploring new models like agentic commerce, where AI-powered agents facilitate the shopping process. The integration of AI in commerce, as seen with OpenAI's partnerships with platforms like Etsy and Shopify, could reshape the customer journey, offering personalized shopping experiences. Brands will need to stay agile and responsive to these technological advancements to remain competitive and meet evolving consumer expectations.
Beyond the Headlines
The discussions in Paris also highlighted the ethical considerations for luxury brands, particularly in maintaining quality assurance amidst cost-cutting measures. The emphasis on value-driven consumerism may prompt brands to prioritize sustainability and ethical production practices to align with consumer values. Additionally, the role of digital platforms like Amazon in shaping consumer discovery and purchase decisions points to a broader shift in how brands approach marketing and sales strategies.
