Fashion 2026: the AI shopper arrives in a value market

Fashion enters the year expecting little help from the market. The State of Fashion report from The Business of Fashion and McKinsey describes low growth, tariffs and a cautious shopper, with AI arriving in the middle of it all (BoF-McKinsey, 17 Nov 2025).

In brief: Fashion enters 2026 in a low-growth value market while product discovery moves into AI assistants. In The State of Fashion 2026, 46% of executives expect conditions to worsen, and the report calls AI chatbot responses “the new SEO”. Research by BCG with Women's Wear Daily finds that 40% of younger consumers already use AI to shop.

A value market

46% of executives surveyed expect industry conditions to worsen in 2026, up from 39% a year earlier, and tariffs are their number one hurdle (BoF-McKinsey, 17 Nov 2025). Consumers are pulling back too: in McKinsey's discussion of the report, 70% of consumers said they plan to spend less and 80% showed value-seeking behaviour, such as waiting for sales (McKinsey & Company, 11 Feb 2026).

Value does not simply mean cheap. Resale is forecast to grow two to three times faster than the firsthand market through 2027 (BoF-McKinsey, 17 Nov 2025). And 84% of US consumers call well-being a top priority, with more than half saying they would keep spending on themselves even if their discretionary income fell (McKinsey & Company, 11 Feb 2026).

The AI shopper

Discovery is moving into assistants. Customers use large language models to search for products, compare offers and get tailored recommendations, and some already use agents as style advisers. The report's conclusion is blunt: “These shifts make AI chatbot responses the new SEO.” (BoF-McKinsey, 17 Nov 2025)

BCG's research with Women's Wear Daily finds that 40% of younger consumers use AI to shop. It projects that Gen Z and Gen Alpha will account for 40% of the US fashion market over the next decade, and tells brands to prepare for agent engine optimization (BCG, 29 Oct 2025).

McKinsey's authors add an uncomfortable detail: in their research, some larger brands were less well represented on AI assistants than disruptive challenger brands (McKinsey & Company, 11 Feb 2026).

Inside the business

More than 35% of fashion executives already use generative AI in areas such as online customer service, image creation, copywriting and product discovery (BoF-McKinsey, 17 Nov 2025). Scaling is harder: McKinsey says about 90% of the industry's AI projects have stalled at the pilot phase (McKinsey & Company, 11 Feb 2026).

What it means for marketers

• Audit your AI shelf. Ask the assistants your customers use about your category and see whether your brand appears, and how it is described.
• Feed the models. Rich product data, reviews and earned media are what assistants draw on. Content matters more now, not less.
• Show the value. In a trading-down market, quality, craft and durability have to be demonstrated, not claimed.
• Treat resale and well-being as brand territory, not side projects.

Fashion's rules are changing on two fronts at once. The brands that do well will be the ones a shopper, and the shopper's assistant, can both understand.

Frequently asked questions

How are consumers using AI to shop for fashion?

Customers use large language models to search for products, compare offers and get tailored recommendations, and some already use agents as style advisers, according to BoF-McKinsey. Research by BCG with Women's Wear Daily finds that 40% of younger consumers use AI to shop, and projects that Gen Z and Gen Alpha will account for 40% of the US fashion market over the next decade.

What is the outlook for the fashion industry in 2026?

Cautious. In The State of Fashion 2026, 46% of executives expect conditions to worsen, up from 39% a year earlier, with tariffs the top hurdle, and resale is forecast to grow two to three times faster than firsthand through 2027. In McKinsey's discussion of the report, 70% of consumers planned to spend less and 80% showed value-seeking behaviour.

How are fashion brands using generative AI?

More than 35% of fashion executives already use generative AI in areas such as online customer service, image creation, copywriting and product discovery, according to BoF-McKinsey. Scaling is harder: McKinsey says about 90% of the industry's AI projects have stalled at the pilot phase, and some larger brands were less well represented on AI assistants than challenger brands.