THE PALM INTELLIGENCE — MARKET NOTE

Fashion does not change only when silhouettes change.

Sometimes the more important shifts happen underneath the product: in what customers consider valuable, how they organize their lives and where they go to make a decision.

Here are three signals we think are worth saving.

01 — VALUE IS BEING REDEFINED

Customers are becoming more price-sensitive, but that does not mean they are interested only in the lowest possible price.

The State of Fashion 2026 reports that more than one third of shoppers intended to spend less across apparel categories over the measured Q3-to-Q4 2025 period. Almost 80 percent said that when prices rise they would wait for a sale, choose a cheaper alternative, postpone the purchase or buy secondhand. At the same time, more than 80 percent across price segments say good value for money is a top buying factor.

THE IMPLICATION: A product needs a reason behind its price. Fit, quality, versatility, durability, design and clarity are becoming part of the value equation.

02 — WELLNESS IS BECOMING IDENTITY

Eighty-four percent of US consumers in the report say wellness is a top or important day-to-day priority. Fifty-one percent say they would spend the same or more on health and wellness even if discretionary income fell.

THE IMPLICATION: Fashion categories connected to movement are being pulled into a larger lifestyle ecosystem. Activewear is no longer required to function only during a workout; it increasingly lives across the day.

03 — AI IS BECOMING A SHOPPING INTERFACE

Fifty-three percent of US consumers who used generative AI for search in Q2 2025 also used it for shopping. Shopping-related searches on generative-AI platforms grew 4,700 percent between 2024 and 2025. Forty-one percent say they trust generative-AI search results more than traditional advertising, while 85 percent report greater satisfaction with AI-assisted shopping journeys.

THE IMPLICATION: Product information is becoming discoverability infrastructure. Brands need precise, semantically rich product data while retaining the human storytelling that gives a product cultural meaning.

THE PALM TAKE — SCREENSHOT THIS

VALUE: Customers are not simply asking, “Is it cheaper?” They are asking, “Is it worth it?”

WELLNESS: Movement is becoming part of identity, not a single appointment on the calendar.

AI: The next product recommendation may arrive as an answer, not a search result.

OUR CONCLUSION: The next generation of fashion brands will have to justify their existence through more than aesthetics. Product, usefulness, identity, information and community are becoming increasingly difficult to separate.

SOURCE

McKinsey & Company / The Business of Fashion — The State of Fashion 2026

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