Podcast Summary:
The Business of Fashion Podcast – The Themes That Will Define the 2026 Fashion Agenda
Published: January 7, 2026
Host: Sheena Butler Young, Brian Baskin
Guest: Mark Bain (BOF Correspondent)
Overview
This episode of The Business of Fashion Podcast takes a deep dive into the "State of Fashion 2026" report, exploring the top 10 themes poised to shape the fashion industry in the coming year. Hosts Sheena Butler Young and Brian Baskin, alongside correspondent Mark Bain, discuss challenges such as tariffs, pricing pressures, consumer sentiment, technological advances, and evolving sector dynamics—offering direct insights, survey data, and predictions for fashion executives and creatives navigating an uncertain and rapidly transforming landscape.
Key Themes and Discussion Points
1. From "Uncertainty" to "Challenging": Industry Sentiment Shifts
Timestamps: 00:19–01:20
- The State of Fashion survey word-of-the-year shifted from "uncertainty" (2024/2025) to "challenging" for 2026.
- Executives worry about geopolitical instability, the global economy, and waning consumer spending, with 46% expecting deterioration in industry conditions (an 8-point rise from last year).
- Quote – Brian Baskin (01:01):
"AI is creating big opportunities. The luxury sector is entering a creative recalibration, and mainstream brands are hopeful about elevating their offerings..."
2. Tariffs and Trade Tensions
Timestamps: 01:39–04:27
- Tariffs remained a dominant and unresolved topic heading into 2026, with many brands awaiting clarity from possible US Supreme Court rulings.
- Holiday spending was resilient (US sales up 4% per MasterCard), but the full tariff impact is expected to materialize this year as pre-tariff inventory is exhausted.
- Tariffs are anticipated to put renewed pressure on both brands and consumers through price hikes.
- Quote – Mark Bain (03:12):
"That shift from uncertainty to challenging is like uncertainty was like, we don't know what's going to happen. The challenging is like we know what's going to happen and it's going to be tough."
3. The Elevation Game: Justifying Price Increases
Timestamps: 05:29–07:42
- Across every segment (fast fashion to luxury), brands are moving up-market and raising prices, but only those offering meaningful value or uniqueness are succeeding.
- Risks highlighted for brands that hike prices without corresponding improvements in product quality, creativity, or value.
- Examples include Zara, Koss, and Revolve—brands working to pair higher prices with better products or more unique offerings.
- Quote – Mark Bain (06:10):
"...offer the value for the price. I mean, that's really what it comes down to… if you're going to ask people to pay more, you should offer them."
4. Luxury Recalibrated: Restoring Trust and Innovation
Timestamps: 07:42–08:29
- Luxury brands face consumer backlash over steep price increases and a perceived lack of innovation, leading to declining trust.
- New designer appointments and creative overhauls in major houses are positioned as crucial efforts to reset and revitalize the sector in 2026.
- The industry must "reinvigorate excitement" and demonstrate authentic creativity or risk further erosion of consumer allegiance.
5. The Well-Being Era and the "Third Space" Strategy
Timestamps: 08:29–11:28
- Well-being is a prominent consumer focus, with fashion brands experimenting beyond physical products into experiences—e.g., in-store clubs, restaurants, and fitness studios.
- Authenticity is essential; superficial attempts to cash in on wellness may backfire.
- The concept of "third spaces" (destinations beyond home and work) is controversial, as it arguably commercializes what should be genuine social havens.
- Quote – Sheena Butler Young (09:26):
"Although controversial, by the way. Like, it's based off a sociologist theory that shouldn't involve consumerism. But yet here we are." - Example: Alex Eagle’s London studio with wellness spaces and branded hats becoming best-sellers (11:28).
6. Jewelry: A Standout Growth Category
Timestamps: 12:11–14:35
- Fine jewelry has outperformed other segments due to less aggressive price hikes, ongoing design innovation, and strong perceptions of value retention (even for self-purchasing women).
- Contrasts with segments like handbags, which do not retain value as reliably.
- Quote – Mark Bain (13:48):
"...jewelry is like, it's hard luxury. You can wear it a lot and it can still be in good shape. It does hold its value."
7. Smart Glasses and Wearables: Category Momentum
Timestamps: 14:35–16:32
- Smart glasses (Meta x Ray-Ban) now combine subtle style with advanced tech (camera, AI analysis, augmented reality overlays).
- New entrants (Google, Warby Parker, Asia-based firms) will accelerate the category’s expansion, although total market size remains small relative to eyewear overall.
- Innovation and seamless integration are key to consumer adoption.
8. AI: Redefining the Fashion Workforce
Timestamps: 16:32–19:08
- AI and automation are now viewed as essential for efficiency and cost management amid a volatile macroeconomic environment.
- Knowledge work roles (copywriting, marketing, merchandising, sales) are most exposed to AI-driven change—unlike traditional automation’s focus on blue-collar labor.
- Quote – Mark Bain (18:13):
"...this wave of automation...now it's doing a lot of like the AI is automating a lot of knowledge work."
9. The Rise of the AI Shopper
Timestamps: 19:08–21:00
- AI-powered shopping assistants are seeing rapid adoption, but remain a minority access point for now.
- Brands are beginning to focus on "Generative Engine Optimization" for AI search agents, but best practice overlaps heavily with traditional SEO (e.g., making websites AI-readable not just JavaScript-heavy).
- Quote – Mark Bain (19:39):
"...the expectation is like, it'll be a significantly higher number [of AI shoppers] than this year.... you as a business have to start accounting for that traffic."
10. Predictions for 2026
Timestamps: 21:59–24:52
- Luxury Reset: Will stabilize but cannot close the door to new definitions of luxury or all challengers.
- Brian Baskin (22:45):
"...brands have basically opened the door to consumers having more of a say in how luxury is defined..."
- Brian Baskin (22:45):
- AI in the Workplace: Leaders will be tested to balance tech adoption and human-centered management like never before.
- Sheena Butler Young (23:28):
"...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."
- Sheena Butler Young (23:28):
- AI Integration: Adoption will accelerate despite stumbles, inefficiencies, and inevitable public backlashes.
- Mark Bain (24:14):
"...there are going to be a whole lot of bumps along the way."
- Mark Bain (24:14):
Notable Quotes
-
On the Industry Mood:
"The challenging is like we know what's going to happen and it's going to be tough."
— Mark Bain (03:12) -
On Raising Prices:
"...if you're going to ask people to pay more, you should offer them..."
— Mark Bain (06:10) -
On Wellness & Third Spaces:
"You don't want to turn well-being just into a way to sell more stuff. And you also want it to feel like some way authentic to your brand..."
— Mark Bain (10:49) -
On Smart Glasses Innovation:
"...the technology had to evolve...we've gotten to that point. They are continuing to add more features like AI."
— Mark Bain (15:09) -
On AI's Workplace Impact:
"It's not producing the returns that we wanted. But my feeling is that this always happens with new technology..."
— Mark Bain (24:31)
Section Timestamps
- Industry Sentiment, Survey Results: 00:19 – 01:20
- Tariffs & Macro Challenges: 01:39 – 04:27
- Consumer Pricing & Elevation Game: 05:29 – 07:42
- Luxury Recalibration: 07:42 – 08:29
- Well-being & Third Spaces: 08:29 – 11:28
- Jewelry Momentum: 12:11 – 14:35
- Smart Glasses/Tech: 14:35 – 16:32
- AI Workforce Transformation: 16:32 – 19:08
- AI Shopper: 19:08 – 21:00
- Predictions for 2026: 21:59 – 24:52
Memorable Moments
- Dollar Tree anecdote (Sheena Butler Young, 04:27): Personal reflection on price increases as a relatable illustration of inflation’s impact on everyday shopping.
- Alex Eagle’s branded hats unexpectedly outselling luxury basics (Brian Baskin, 11:28): Highlights the unpredictable intersections of community, wellness, and product trends.
- Discussion of fashion’s challenge with authenticity in wellness and rapid AI advances—balancing innovation with skepticism and the need for genuine consumer connection.
Tone and Language
The conversation balances candid, data-driven analysis with the approachable, insider tone typical of BOF reporting. Speakers are pragmatic about risks and opportunities, and skeptical but optimistic on the impact of AI and sector resets. The dialogue is conversational yet laced with expert insight, offering actionable intelligence for fashion professionals and industry watchers alike.
For further reading and the full State of Fashion 2026 report, visit businessoffashion.com (subscription required).