Fashion & Retail
Responsibility in the Back Seat?
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A FADING PRIORITY
For much of the last decade, sustainability was heralded as fashion’s next great transformation, with ethics also high on the agenda. But in 2025, both have fallen from grace eclipsed by AI, brand differentiation and short-term growth despite a steady stream of scandals exposing how fragile the industry remains on these fronts. Of course, what many miss is that responsibility can be brand differentiation.
And the irony is clear: climate shocks, labour scandals and new regulations make sustainability and ethics more urgent, not less. Yet investment has slowed, often replaced by surface-level gestures that serve as effective PR tactics but do little to address systemic problems.
This Spotlight asks a harder question: is the industry losing its long-term survival instinct? And if so, what are the overlooked fundamentals holding it back, and how can tackling these pitfalls safeguard both profit and people, as well as the planet?
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Courtesy of Loro Piana, whose recent troubles highlight the industry’s ongoing transparency challenge
THE VALUE GAP
Discount culture has reshaped fashion’s economics. 70% of consumers plan to continue shopping from off-price retailers, even if their disposable income rises. Once people have paid less for the same item, why would they return to full price? The result: brands lose pricing power, and their value proposition at the top end looks hollow.
Luxury faces the sharpest risk. After years of price-led growth, even affluent consumers are questioning whether the promise of luxury carries any real substance or if it has become, in the words of one recent report, an “empty suit.”
Yet consumer appetite for meaning is not gone. Over half of US adults say recent climate disasters have made them more determined to make sustainable choices. This is a reminder that defining value beyond price is no longer optional. Brands that fail to do so could quickly lose relevance.
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Courtesy of Gucci - under pressure to reaffirm its value as sales slump while prices climb
THE UNSEXY LEVERS
Fashion is quick to rally around the next big idea, from immersive retail to digital flagships. But some of the less visible changes, already proven to deliver tangible returns, still struggle to get the same attention.
Take inventory for example, still the industry’s Achilles heel. Climate volatility makes seasonal demand unpredictable, while product and channel complexity adds further strain. Poor sell-through doesn’t just squeeze margins, it locks up working capital and creates avoidable waste. McKinsey highlights that the fix isn’t simply buying less. Smarter tactics are emerging from AI-powered forecasting that can cut stock-outs by up to a quarter, to 'test and react' buying that reduces overproduction risk, to digital twins that help brands’ model inventory across every channel.
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Courtesy of ASOS, streamlining its brand mix to combat choice paralysis and manage stock more effectively with test & react buying
THE UNSEXY LEVERS
The human layer is another operational weakness. Shoppers say they spend more when they receive good service, yet frontline staff are too often overlooked. Without the tools or knowledge to tell a brand’s story including its sustainability efforts, the chance to build loyalty is wasted.
And in supply chains, the cracks are widening. Exploitation scandals and tightening EU regulation are forcing brands to prove exactly how and where things are made. Localisation, stronger supplier partnerships, and worker protections are shifting from optional extras to business-critical basics.
The truth is, resilience and credibility are built as much on these operational fixes as on the bold ideas that make the headlines.
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Courtesy of Shiseido, whose Digital Academy has upskilled more than 10,000 employees
RECLAIMING SUBSTANCE
Not every solution that matters is radically new. Repair, resale, material innovation, and supplier partnerships have been circulating for years. The same goes for the operational basics we’ve highlighted in this Spotlight: inventory discipline, empowered store staff, transparent supply chains. What’s missing is the discipline to make these commercially viable, scalable, and relevant to consumers.
One example of this in practice is TômTex, a material innovator making leather alternatives from mushrooms and waste. Recognising that fashion alone won’t provide the scale needed, the company is now moving into sectors like hospitality. It’s a smart way to grow, broadening applications to secure volume while keeping sustainability at the core.
That’s where the real test lies. True responsibility isn’t about side-projects or a headline play, it’s a long game of execution: aligning operations, people and storytelling so that change sticks. For both fashion and retail, the task now isn’t another reinvention, it’s delivering on promises long overdue.
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Courtesy of Clarins, whose ‘Domaine Clarins’ in the Alps established in 2019 serves as a long-term living laboratory for sustainable cultivation and biodiversity protection.