The Themes That Will Define the 2026 Fashion Agenda

0:07Hello and welcome to The Debrief from the Business of Fashion, where each week we delve into our most popular BOF professional stories with the correspondents who created them. I'm senior correspondent Sheena Butler-Young. And I'm executive editor Brian Baskin. Every year, BOF and McKinsey ask fashion executives what word they would use to describe the coming year with the results published in our State of Fashion report. In 2024 and 2025, the most common answer was uncertainty. But for For 2026, they went with a different word, challenging. The industry is worried. They're worried about geopolitical instability, the global economy, and whether consumers will keep spending in the U.S.

0:51and other key markets. 46 % of executives surveyed said they expect industry conditions to worsen, an 8 percentage point jump from last year. But that same survey found nearly as big a jump in the share of executives who are more optimistic about 2026. AI is creating big opportunities, the luxury sector is entering a creative recalibration, and mainstream brands are hopeful about elevating their offerings as categories like smart glasses and jewelry experience new momentum. Today, we're taking a look at the 10 themes outlined in our 2026 State of Fashion Report that will define the fashion agenda in the year ahead.

1:28And with us is BOF correspondent Mark Bain, who worked on the report. Mark, welcome back to The Debrief. Hey, happy new year. Nice to be back, Brian and Sheena. I appreciate it always. Appreciate you being here. So it's hard to talk about 2026 without talking about tariffs. I mean, they were the dominant story last year. They drove basically everything happening in the industry. And I was hoping you could tell us where we left things at the end of last year and how the industry is feeling about tariffs heading into 2026. So at the end of last year, there was still a good amount of uncertainty, which is one of the key issues here that we can come back to.

2:08One good thing was that I think a lot of brands started to feel like they did have somewhat of a handle on at least how to mitigate some of the impacts, what they should do in response. But coming back to that point about uncertainty, we're waiting right now to see if the US Supreme Court is going to strike down some or all of the tariffs and exactly how that'll play out. So we're not quite at a point where everyone can just make plans for the future just yet. Of course, the word for next year is challenging, not uncertainty, if you'll recall my intro. But in all seriousness, I mean, you alluded to it here, but holiday spending in the U.S.

2:48was actually quite strong. Sales grew 4 % according to MasterCard. We haven't seen the U.S. consumer pay a price for tariffs just yet, it seems. And I'm curious why then the industry seems so pessimistic in this survey? If, you know, the Supreme Court could strike these things down tomorrow, it doesn't seem like the tariffs are causing all that much damage yet. I mean, what is hanging over everybody? I think there are a few things going on. One is that I don't think we've actually seen the full impact of the tariffs just yet. A lot of brands pulled forward their inventory. And so they got in a lot of products ahead of the tariffs really kicking in.

3:29Now they have gone through a lot of that product. And, you know, we have new season stuff coming. Some of the tariffs were walked back, others were not. So I think, you know, some of the worst case scenarios that we saw on April 2, with tariffs on places like Vietnam, were taken down to some degree. So that stuff is all good. But we're also expecting that in 2026, we're really going to finally see the full impact of the tariffs as brands are now, you know, that, like I said, that inventory that they pulled forward ahead of the tariffs kicking in has run out. And now, you know, that shift from uncertainty to challenging is like, uncertainty was like, we don't know what's going to happen.

4:13The challenging is like, we know what's going to happen and it's going to be tough. So in a way that's better in that, you know, maybe you can plan a little bit more. But yeah, definitely still not like the most reassuring signs. And when you say tough, Mark, are we talking also on the consumer side, like with price hikes? So for example, this is not fashion related, but I went into Dollar Tree on Sunday and I was talking to some of my friends. I'm like, it went from a dollar to a dollar 25. And now we're at a dollar 75 is like the baseline in Dollar Tree. So there's definitely something happening with pricing.

4:47And I think we keep saying consumers are resilient. They're resilient. The holiday spending was resilient. But how much further can this go? And are tariffs to blame? Yeah, I mean, that's always one of the big questions. It's like, when are consumers finally going to really pull back on spending? I do think tariffs are definitely to blame for some of the price hikes. In the state of fashion, part of the executive surveys we did, the strategy that the highest number of executives said was their way of mitigating the tariff impact was raising prices, which makes sense. To some degree, there's just no way around that.

5:25You can do it strategically, but at some point you're probably going to have to raise prices. And that brings us to another one of the themes in the report, which was the elevation game. And it's exactly actually what you're talking about, Sheena. I don't think Dollar Tree is mentioned in there, but it said that at every segment, at every value segment, whether we're talking about fast fashion or really right up to luxury brands, although that's a bit of an exception that we'll get into, they're all raising prices, as we said. The question is, though, how do you offer something to justify those higher prices?

5:56I mean, this is the trap luxury brands fell into as they raised prices and people said, well, it's the same product, it just costs twice as much. It sounds like there's ways that brands can avoid that. Mark, tell us what are some of the recommendations there? I mean, the really big one, and it sounds so obvious, it's almost like, why do we have to say this out loud? But actually offer the value for the price. I mean, that's really what it comes down to is like if you're going to ask people to pay more, you should offer them more. And I think where we've seen this is certainly what happened with luxury is what they did not do is have corresponding improvements in quality or creativity of their products.

6:36Just the price went astronomically up for like a like for like product. What we've seen with a lot of big mass market players, like Zara and Koss, that are really trying to push up market more, they are trying to offer a somewhat better product as well. They can't really compete on the low end with Shein in terms of pricing, but they don't want to compete on that product either. They actually have to offer consumers something that they're willing to pay more for. It was interesting because I worked on a report last year where Divya from Revolve, she's the chief merchandising officer, talked about this strategy of like they were only going to sell things at like$800 or more if they were especially unique.

7:18Otherwise, if there was something comparable, they weren't going to sell it above that price point. But then where does that leave luxury brands? Because it seems like there's been almost this consumer revolt against higher prices there and a lot of skepticism about the value that they're offering. And I'm curious, you know, we saw all the new designer debuts in September and October. I guess this is the year they have to prove that they have something to offer, right? Yeah. So one of the, you know, of the 10 themes in the report, luxury recalibrated was one of them, specifically for the reasons that you're talking about.

7:50You know, the luxury industry really sort of lost trust with consumers over the past couple of years because of these price hikes and because of what's, you know, perceived as like a lack of innovation in the product. And so the industry is really in 2026, I think, under the gun to like rebuild that trust and sort of reinvigorate excitement around luxury. And we've seen a lot of efforts to do that with like the big creative director resets, you know, a huge number of brands. And, you know, that's going to be a big theme throughout 2026 is just seeing whether the brands can actually pull off these turnarounds.

8:28One of my favorite themes also in the report is the well-being era. We've been talking about wellness for probably like a decade now in fashion, and it sort of like means everything and nothing at all. But we're now in this phase where brands have landed on well-being and like this concept of third spaces. Where does that shake out in 2026? Like, is that the way forward, like making your store into like an interesting place where people can go? Are there other ways that brands can get after wellness that feels more authentic in the year ahead? Yeah, there definitely are ways. I think so in the report, we've some of the little behind the scenes insight here is we really thought about like we knew well-being was going to be a big factor in the year, like all the signs point to it.

9:11But we were like, but how does fashion really get involved in this? Like, you know, brands are they're selling products based on their aesthetics and that sort of thing. It's like it's a little bit of a tricky space to play in. Third spaces, like you mentioned, Sheena, are definitely a huge part of it. Although controversial, by the way, like it's based off a sociologist's theory that shouldn't involve consumerism. But yet here we are. Yeah, we did a whole episode on this, actually. But it's just to define the term. It's basically that there are places outside of the home or where you work that you want to spend time and interact with other people.

9:45And there's a lot of retailers that think they can provide that. But in a way, if you're being asked to buy a product, it's some people think it's antithetical to the whole idea of genuine human interaction if there's commerce involved. And so some of the different things we've seen brands do are like members clubs, but also restaurants. And then, of course, you know, if you're like a fitness brand, you can have like a yoga studio sort of thing. I think Allo does that. But there are other ways that brands can get involved, too. And that's, you know, again, it goes back to like really mapping out like how does your brand actually fit into the space in a way that makes sense?

10:21And it could be like, you know, introducing skin care products or it could just be focusing on like fitness items like, you know, Celine last year launched Pilates collection, a very high priced Pilates collection, which, you know. Back at pricing again. But if you are a diehard Celine customer and you would like some Celine Pilates gear, you know, that's an option for you. But it also comes through in things like your marketing, like, you know, you can promote balance and vitality and, you know, work with ambassadors and influencers. But it's it is definitely a kind of a tightrope you have to walk where you don't want to turn well-being just into a way to sell more stuff.

11:04and you also want it to feel like some way authentic to your brand, which is it's definitely not an easy thing to do. But in the year ahead, you know, as more consumers are leaning into well-being and putting more money toward it, if you're a fashion brand and you are facing a whole bunch of choosy customers, that's one way that you can look to see like, you know, where you can get their attention. We're running a story this week that has a great example of this. It's about the London designer, Alex Eagle, who in 2020 opened fitness studios in her stores and then started selling hats with Alex Eagle Sporting Club on them.

11:42And weirdly, even though she sells like $500 minimalist sweaters and things that are not logo hats, like those have become some of her best selling items because it hits a lot of those buttons we just talked about. It creates the sense of community. There's a wellness aspect to it. There's a bit of a third space aspect to it. And it seems like if you do it right and you're not the 20th brand to the party as the other factor here, it can really pay off. We'll be back with more of The Debrief right after this.

12:19So we've talked a lot about consumers not shopping or how hard it is to get them to spend money on stuff in this climate. There is this huge exception, though, to the rule, and that's jewelry right now. Like jewelry has been booming for at least the past year and it's expected to continue to do so in 2026. Mark, what's so special about jewelry? Why is that booming right now? There are a few factors behind that. One, jewelry did not hike prices as drastically as like other luxury segments. Like when we're talking, when I'm talking about jewelry here, I'm talking about like fine jewelry. So they did hike prices, jewelry brands, but it wasn't as dramatic.

12:56It was more gradual and it didn't come across as like the sudden shock to the system. There was also like there's been a lot of innovation in jewelry. So people are excited by, you know, new designs. And then another really big thing is that the perception of jewelry is just that it holds its value really well. It's not like, you know, a handbag. There are a really small number of handbags that actually hold their value really well. And if you beat them up through like regular use, they don't hold their value so well. Jewelry is like, it's a bit different. You know, it's hard luxury. You can wear it a lot and it can still be in good shape.

13:34It does hold its value. And we've seen the price of like gold and silver, like shooting up and that sort of thing. I think all of those factors have contributed to people continuing to buy jewelry, even as they pulled back on some other categories. Yeah. You get tired of your jewelry, you can just melt it down. I was going to say, if our features editor Diana Pearl was on, she'd talk about that maximalism meets minimalism trend where people are dressing in very muted, understated clothing, but then adding these over-the-top accessories, that's probably also driving a little bit of this jewelry momentum.

14:05him. Another big thing is like, and this is probably a more sort of historical look, but like for the longest time, you know, the way a lot of women got jewelry was men bought it for them. That has shifted. Like women are buying themselves jewelry now and they use it to, you know, to treat themselves just because they want to. That's, it sounds like almost silly in 2026 at this point, but that's been a big shift is, you know, more women are actually buying jewelry for themselves at this point. Something else people are definitely buying is, and I know this is one of your favorite topics, Mark, is smart frames.

14:40I mean, smart glasses, we were talking about for a decade, probably two decades, I don't know how long. And then suddenly they just burst onto the market with Meta and Ray-Ban, I guess a couple years ago now. And this year, it sounds like they're going to be everywhere. Tell us more about that. Yeah, Meta and Ray-Ban did a really smart thing with their smart glasses, which is they didn't make them look like smart glasses. They just look like sunglasses or, you know, regular glasses if you don't have the, you know, the tinted lenses. But that was like sort of a key unlock to the category. Like they still, you know, the technology had to evolve too.

15:15Like the components had to become small enough that we could work them into those like normal looking frames. But we've gotten to that point. They are continuing to add more features like AI, you know, so you can literally look at something with your glasses, ask it what you're looking at. it will snap a picture and analyze it and tell you like what it is using AI. I mean, and it just looks like a regular pair of Ray-Ban frames. So I think that was, you know, that was a big deal. And then now we're seeing more capabilities being added, like the display in the meta Ray-Ban display glasses, where you have like an actual digital like overlay on your field of vision, which allows you to do more.

15:56And we're seeing more entrance into the category, Like Google and Warby Parker are going to put out their first smart glasses this year. And, you know, we have Chinese companies in Asia, like getting into the category as well. And so there's an expectation that there's going to be a lot of ramping up this year where we just see more models on the market, more capabilities. And even though, you know, it's really still a small category overall, it's like ultimately pretty tiny in the, you know, the glasses market more broadly. But it's going to ramp up and it's going to start to really gain some momentum this year.

16:32And that probably brings us to our favorite topic of it all. Like you can't have a conversation about 2026 and the workplace or fashion or anything without AI. So shall we start with the theme around the workforce being rewired this year? I think that's what it's called in the report. So obviously tech is reshaping the workforce. I think we're still not sure whether it's more of a helper or a one-to-one replacement, depending on the role. But what did executives say they felt about AI and productivity for 2026? Is it still exciting? Is there also some reservations? Where did we land? It's a big priority for 2026.

17:06For some of the reasons that we've already talked about, like it's shaping up to be kind of a tough year in some ways. Like consumers are, you know, just being cautious with their spending. Brands are facing a lot of higher costs from things, including tariffs. We also just see like a macro environment that is just generally kind of volatile. And a lot of businesses are looking for efficiency. You know, they're trying to figure out like where can they get those efficiency gains to just run better as a company. And one of the big hopes for the year is that AI will be able to do a lot of that. AI and automation and, you know, technology more broadly, but AI being a big piece of that.

17:45But then, yeah, so sort of the hope is that there will be a lot of like efficiency gains through AI this year. Well, do you think the roles that were going to be impacted or that we were predicting would be impacted in 2025? Like those creative, what they would call the low stakes menial tasks, like like a copywriting, like a some of the social media posting stuff. Are those the same kinds of jobs that people are expecting to be at risk, so to speak, in 2026? Or is it different now? Yeah, I think it's mostly the same jobs. I mean, copywriting is a big one that's already been pretty heavily impacted.

18:19You know, some of the roles that we looked at in the report as ones that could see a lot of change because of AI, where, you know, workers will have to be like upskilled and that sort of thing. It's like marketing, merchandising, sales, like, you know, some of these very like classic and core and functional roles in the fashion workforce. And I think one of the things about this wave of automation that we've seen, unlike previous ones where, you know, historically automation affected blue collar workers who, you know, were working with their hands doing like physical tasks. Well, now it's doing a lot of like the AI is automating a lot of knowledge work.

19:02So that's anything from copywriting to, you know, pulling data insights out of reports on sales. The report also talked about how AI is going to affect consumers. There was a chapter on the AI shopper. And that was one that we really saw a lot of headlines about toward the end of the year during holiday shopping season. Everyone rolling out their AI agents and their shopping, AI-powered shopping services. Is that something that's really going to break out next year? Or is it kind of like the job losses where it's always just on the cusp of happening and doesn't quite hit? We talked about how to frame this a bit in the report.

19:42I guess maybe it depends what you mean when you say break out. Because overall, the numbers are ramping up. The percentage increases are crazy. They're like 1 ,000 % jumps in the number of consumers. Well, when you're going from zero, it's an infinite jump. That's exactly the point is like, it's going to ramp up. It'll still be small overall. It's not like everyone by the end of next year is going to be using ChatGPT instead of Google. But, you know, the expectation is like, it'll be a significantly higher number than this year. And at a certain point, you know, even if it's like 5 % of shoppers or 8 % or 10 % or whatever, It's like it's still enough that you as a business have to start accounting for that traffic and paying attention to those customers because, you know, you can't afford to lose those shoppers just because you're like, well, it's not the majority of my consumers coming through AI platforms instead of Google search.

20:39It's like, no, you still want those customers. So I think it's going to have a big impact in 2026, although it will still be, you know, not the majority of shoppers. Does it feel like the industry is actually preparing for this? Is this one of those ones that's like so obvious? Why are we saying it? Or do people actually still need to hear, hey, this is coming, you'd better start thinking about this? Everyone I talk to is thinking about it already. They're like they're already seeing an impact in their their traffic, their website traffic specifically. What I think is less clear is what you do about that.

21:13You know, there's been the rise of what's called like GEO, like generative engine optimization. But a lot of the guidance is like, it's very similar to what you would already be doing for SEO. And, you know, some of the things are like, you know, these AI platforms right now, the AI is not very good at like reading JavaScript. And a lot of like fashion sites, you know, they have these like flashy JavaScript displays. But it's like, what do you do you strip all that out because you have this small share of traffic coming from AI that doesn't know what to make of that? So there's a lot of like trying to think about like, how do we start preparing now?

21:53But I haven't seen a lot of like a huge revolution, like brands redesigning their websites or anything like that. At least not yet. All right. Why don't we wrap things up by offering some predictions? Why don't each of us pick one of the themes and say where we think it's headed in 2026? I will start. I'm going to put myself out on a limb and try to make a call on the luxury reset. But I'm going to take a bit of a mealy-mouthed answer and say I think it's going to work to an extent, at least stop the bleeding. I think, though, that these brands have basically opened the door to consumers having more of a say in how luxury is defined and in letting challengers take some of that market share and mind share.

22:40And it's really hard to shut the door on that, even if you get your sales growing again. What I think will be interesting to watch, and this is sort of a prediction, is AI in the workplace this year. I think we've been talking a lot for the last couple of years about whether it's going to replace jobs or upskill people or create new opportunities. I think it's going to challenge leadership more than it has in the past to set the tone. I have a story that came out this month and it talks about what it takes to lead in 2026 as like a CEO or someone that's VP level and above that's managing a team.

23:15And one of the key themes is that they need to be hybrid, that they need to understand and embrace technology, but also be more human. And I think 2026 will be the year that it challenges leaders in a way that it hasn't before to be both of those things. I actually have a prediction that I'm doing in my newsletter, which is like, so admittedly, and I say this in the newsletter, this is not the most daring prediction. It's not putting myself out there all that much. But I think when it comes to AI, there are going to be so many stories that are like two steps forward, one step back, where it's like this company is implementing AI, but then we keep running into all these challenges.

23:55and there are going to be all these hilarious stories about AI going wrong. My prediction is that, you know, companies don't feel like they can sit out AI at this point. So they're going to push ahead trying to integrate it. In many ways, they need to find ways to, like, improve that efficiency and do that sort of stuff. But there are going to be a lot of stumbles along the way and a lot of stories that come out about, you know, things going wrong, mishaps that are sometimes inadvertently hilarious. and there's going to be a lot of backlash against AI with people saying like, see, it is not producing the returns that we wanted.

24:33But my feeling is that this always happens with new technology and companies are going to push ahead. They're going to find ways to start eking out some gains and scale from there. And AI will become more embedded by the end of the year, even though there are going to be a whole lot of bumps along the way. Mark, thank you so much for joining us today. Please be sure to check out the State of Fashion 2026 as well as Mark's articles at businessoffashion.com. This and other stories are available to BOF professional subscribers only, and you can find the links in the episode notes. You've been listening to The Debrief, produced and edited by Olivia Davies and Eric Ria.

25:11I'm Sheena Butler-Young. And I'm Brian Baskin. We'll be back next week with a new episode. Thanks so much for joining us and be sure to follow us wherever you get your podcasts. When You Love Me