JB Insights
The State of Fashion:Luxury 2025
McKinsey & Company and BoF Insights report
Global fashion faces challenging landscape
The ninth annual State of Fashion report by McKinsey & Company and BoF Insights highlights the challenging landscape the global fashion industry faces in 2025. With economic uncertainty, changing consumer behaviors, and evolving market dynamics, the year is expected to be a critical juncture for many brands.
Overview
Economic Challenges: 80% of executives foresee no improvement in the industry, and only 18% rank sustainability as a top concern, down from 29% in 2024. Consumer confidence and spending remain major issues.
Key Drivers: Price sensitivity, the rise of dupes, climate change acceleration, and reshuffled global trade create a difficult environment.
Geographic Shifts: Growth engines in Asia, particularly India, Japan, and Korea, are becoming pivotal as China faces economic challenges.
Themes Driving the Agenda
Trade Reconfigured: Brands are diversifying sourcing to align with evolving trade policies and sustainability targets. Nearshoring and political alignment are critical considerations.
Asia’s Growth Engines: While China slows, India, Japan, and Korea are emerging as vital markets for growth.
Discovery Reinvented: AI-driven curation in e-commerce promises to help overwhelmed shoppers navigate abundant choices.
Silver Spenders: The growing over-50 demographic offers new opportunities for incremental growth, emphasizing the need for inter-generational appeal.
Value Shift: Resale, off-price, and dupe markets are flourishing as consumers seek better value amid persistent economic pressures.
The Human Side of Sales: Enhancing in-store experiences by empowering well-trained sales staff can drive demand for physical retail.
Marketplaces Disrupted: Online non-luxury marketplaces face existential challenges, struggling with declining demand and rising customer acquisition costs.
Sportswear Showdown: Challenger brands are rapidly gaining market share, driving competition in the dynamic sportswear segment.
Inventory Excellence: Advances in inventory management and agile supply chains are key to addressing margin pressures and meeting sustainability goals.
The Sustainability Collective: Collective action is essential to meet decarbonization goals despite consumer reluctance to pay premiums for sustainable products.
Looking Ahead
The industry’s outlook remains sluggish, with revenue growth stabilizing in low single digits. Luxury’s dominance in profit creation is challenged by non-luxury segments for the first time since 2010. Brands that act nimbly to address geographic shifts, demographic changes, and technological innovations will find opportunities amid the turbulence.
Growth in the jewellery sector will be fueled by rising demand from ultra-high spenders and continuous investment from luxury houses in technology and expertise.
The new playbook for 2025 emphasizes adaptability, localization, and sustainability, while redefining value and consumer engagement. The fashion sector must innovate, embrace technology, and prioritize long-term resilience to navigate this period of reckoning successfully.
JB Insights
Jewellery Advertising and Promotion Hijacked By AI and Algorithms
From decoding what Gen Z wants before they even know they want it, to conjuring surreal ad campaigns featuring models who don’t have a pulse, tech is rewriting the rules of luxury.
By Steve Fernandes
Forget dusty velvet trays and weeks of agonizing over sketches. The jewellery world—an industry notoriously obsessed with heritage, heavy gold, and “the way we’ve always done it”—just got a massive software update.​Artificial Intelligence has officially crashed the atelier. From decoding what Gen Z wants before they even know they want it, to conjuring surreal ad campaigns featuring models who don’t have a pulse, tech is rewriting the rules of luxury.

But while algorithms are churning out prototypes at warp speed, the industry’s heavy hitters are drawing a hard line in the gold dust: AI can crunch the numbers, sure, but only human hands can give a piece a heartbeat.
​The Tireless Studio Assistant

Walk into a modern design studio today, and you’re just as likely to see prompt engineering as you are pencil shavings. With gold prices hovering in the stratosphere and lifestyles shifting toward lighter, everyday statement pieces, brands can no longer afford to guess what will sell.
​The conversation around AI isn’t about replacing artisans—it’s about removing the guesswork. AI test-drives hundreds of variations in gemstones, proportions, and finishes before a single gram of gold hits the workbench. Instead of looking in the rearview mirror at last season’s sales, AI scours search trends and social chatter to predict the next big silhouette.
Pair AI-driven trend forecasting with next-gen hardware—think 3D printing, paper casting, and electroforming—and you get intricate, feather-light pieces hitting shelves at record speed. Throw in blockchain for airtight traceability, and suddenly, the ancient trade of goldsmithing looks straight out of Blade Runner.
​Decoding the Modern Buyer

If you think AI is just a backend factory tool, think again. It’s also reading the room—and the customer.
​In hyper-discerning markets shoppers want it all: a heritage bridal set steeped in tradition for the wedding, and sleek, contemporary pieces for Monday morning brunch.
By analyzing buyer behavior, AI helps jewellers nail hyper-personalization, offering virtual visualizations and bespoke directions tailored to specific milestones, self-rewards, or celebrations.
Remember:​ You can’t code the intuition of a seasoned karigar hand-setting a diamond, nor can an algorithm translate a family’s multi-generational story into an heirloom. AI is a creative enabler, not a replacement.
​Pixels, Faux-Models,
Of course, the revolution isn’t just happening at the workbench—it’s taking over your feed. Traditional luxury shoots are notoriously brutal on budgets: massive crews, exotic locations, and logistical nightmares. Enter generative AI, slashing content production times by up to 65%.
​Brands are ditching physical sets for surreal, dreamlike digital editorials—picture golden heart pendants floating in zero-gravity landscapes—and tapping virtual influencers to front major drops. Just look at Indian label KALON Art Jewellery, which rolled out its “Wildfire” collection starring AI influencer Naisha Bose.
​The Glitch in the Glamour

Before we hand the keys of the vault over to our silicon overlords, let’s talk about the catch. For all its swagger, AI still has a glaring blind spot: reality.
​Generative algorithms don’t understand physics, metal thickness, or stone-setting mechanics. A ring that looks transcendent on a screen might be structurally impossible to forge in a real workshop without a complete CAD overhaul. Worse, AI still trips over basic human anatomy—nothing kills a luxury vibe faster than a viral campaign featuring a model with six fingers or a warped gemstone.
​Then there’s the trust factor. Buying fine jewellery is an emotional, high-stakes flex, and consumers are starting to push back when they realize the radiant model wearing a diamond choker doesn’t actually exist.
The law is catching up, too—New York just passed a landmark regulation forcing brands to slap a disclosure label on ads using “synthetic performers.”
​The Verdict
The future of fine jewellery isn’t a cage match between the algorithm and the artisan—it’s a collab. The brands poised to win the next decade are the ones bold enough to let AI handle the heavy lifting of data, speed, and hyper-personalization, while fiercely protecting the raw, messy, irreplaceable magic of human craftsmanship.
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