Rewired retail: Winning the future of fashion

In Deloitte’s Six forces shaping the future of the consumer industry, we examine how six converging forces—economic realignment, technological acceleration, geopolitical volatility, demographic shifts, climate pressure, and culture’s algorithmic remix—are fundamentally reshaping the consumer industry and rewriting the rules of fashion retail in real time.¹  Even legacy brands must adapt to stay relevant, as fashion and luxury is evolving at an unprecedented pace—a shift further explored in Deloitte’s Future of fashion and luxury. At their intersection stands a new shopper: Gen Z and Gen Alpha. 

We envision a near-future where these digitally native consumers flow fluidly from a TikTok trend to a voice-activated checkout, expecting hyper-personalized experiences that travel with them across platforms, not channels. Yet, many brands still bolt digital onto stores instead of architecting behavior-led ecosystems.

In the next era of fashion engagement, AI agents, ambient interfaces, and predictive engines knit together every touchpoint fluidly: online, offline, and everywhere in between. 

Delivering on that promise demands clean data, connected teams, and pathways that flex in the moment while staying unmistakably on-brand. The upside is tangible: Companies already mastering next-gen engagement are growing revenue on average 179% faster than their peers.²

Rise of the next-gen consumer

Gen Z and Gen Alpha aren’t just the future; they are already reshaping the global economy. Gen Z alone comprises more than 20% of North American³ (more than 68 million people) and 25% of the global population (nearly 2 billion people). Spending power is also on track to surpass baby boomers, reaching $21.6 trillion in the next five years.⁴

As Gen Alpha emerges and becomes more prevalent, these generations are not just collectively larger than their predecessors; they are actively redefining what it means to be a consumer, and brands must adapt now to stay relevant. At the same time, the erosion of the US middle class and a 9% decline in apparel’s share of wallet⁵ among younger consumers are accelerating the rise of a barbell economy, where spending bifurcates toward premium and discount tiers.⁶

To compete for share of wallet in this polarized landscape, fashion brands must work harder to earn relevance and capture spend, redefining value, pricing, and assortment while targeting micro-segments with greater precision and intent.

How Gen Z and Gen Alpha shop

The way Gen Z and Gen Alpha shop looks radically different from past generations. Their identities are deeply intertwined with their digital environments, driving a profound shift in how they define influence and shape brand relevance. More diverse in every dimension, including race, gender, orientation, and values, they are expressive, fluid, and hyper-connected.⁷ More than digital natives, they are becoming digital architects shaping trends and influencing what sells. Far from passive consumers, they co-create style on TikTok, shaping trends through user-generated content, and amplify brands with every share. Their influence is generally fast, participatory, and increasingly central to how culture and commerce move. More than 50% of Gen Z prefer creators over celebrities,⁸ and their path to purchase is no longer linear but rather instantaneous, fueled by a constant discovery loop on social platforms.

Commerce for these generations is ambient and embedded seamlessly into daily life. Globally, Gen Z is 29% more likely to make same-day purchases via social platforms,⁹ and over half expect consistent experiences across mobile, online, and in-store touchpoints with a willingness to pay more for a better experience.¹⁰ Brand loyalty is built through participation, not just promotion: Consumers want to be part of the process, not just on the receiving end of it. Co-creation through user-generated content outperforms traditional media sevenfold with 42% of Gen Z saying they have influenced others’ buying decisions.¹¹ 

What is emerging is not just a shift in marketing; it is a new paradigm. The traditional funnel has fractured.

This new fashion engagement ecosystem is fully fluid, nonlinear, and decentralized, shaped by platforms, creators, and algorithms, not owned by channels alone.

How brands can stay relevant

To stay relevant, brands should stop designing channel-specific journeys and start architecting living ecosystems that respond to context, behavior, and culture (figure 1).



Figure 1. The fluid fashion ecosystem of Gen Z and Gen Alpha

The future fashion ecosystem for Gen Z and Gen Alpha is dynamic with consumers fluidly entering through discovery, co-creation, and community. While illustrative, the actual ecosystem will vary based on consumer micro-segments and retail models (mass, specialty, department, or luxury), requiring brands to design not for a linear path but for a living ecosystem.

Winning in omnichannel today means knowing which pathways to prioritize for your segment (figure 2). Mass and department retailers succeed by optimizing the core: search, browse, transact, and fulfill. Their value formula is predicated on speed, convenience, and consistent post-purchase service. Specialty retailers go deeper by prioritizing community engagement, personalization, and ongoing interaction that builds affinity over time. Luxury brands, by contrast, thrive not through functional excellence but with emotional resonance. They build brand affinity and deep emotional connection by focusing on inspiration, curation, and validation. 

In these moments, exclusivity, storytelling, and identity alignment drive loyalty and transcend the purchase itself. In this nonlinear ecosystem, one pathway doesn’t fit all. Success hinges on identifying which pathways to prioritize for priority customer micro-segments and designing adaptive experiences that evolve with their behaviors and needs. 

Figure 2. Omnichannel value formulas by fashion segment

Success in omnichannel depends on identifying the right value formula for target customers and investing in experiences that evolve with their needs and expectations. Each retail segment has a distinct focus that informs where they prioritize to deepen engagement and loyalty with consumers. 

How Asia offers a glimpse into the future


While the cultural context differs, Asia offers North America a compelling glimpse into the future of next-gen retail. In 2024, live-stream commerce in Asia drove $104 billion in fashion revenue, compared to just $8 billion in the Americas.¹² Direct-to-consumer brands there translate social trends into real-time product drops, influencer-led discovery, and personalized interactions. 


Emerging metrics like “dwell time” (i.e., amount of time spent) in luxury showrooms highlight a shift from transactions to experiences by inviting Gen Z into third spaces where community and commerce converge. This generation is 2.7 times more likely than previous ones to receive product recommendations from artificial intelligence (AI), and 70% of them express interest in AI shopping agents.¹³ These aren’t edge cases; they are signals of a rising global standard: immediate, immersive, creator-powered commerce that meets next-gen consumers on their terms. 

Powering the new engagement ecosystem: The technologies and capabilities defining the future

To help fashion leaders understand how to navigate this new technological landscape, Deloitte has identified five strategic technology themes that reflect the top priorities for the next generation of consumers and will help drive the future of digital and omnichannel for fashion:

• Intelligent experience and personalization: Experiences should adapt in real time. Predictive systems, emotional awareness tools, and AI shopping agents (including agentic AI) shift personalization from passive suggestion to autonomous action.

• Immersive and spatial commerce: Shopping is becoming a visual, interactive experience. Augmented reality (AR) and virtual reality (VR), 3D displays, and spatial navigation tools, enhanced by next-gen smart glasses, are turning transactions into entertainment, exploration, and real-time personalization.

• Sustainable and circular systems: Conscious consumption is accelerating and shaping brand expectations. Digital product passports, resale platforms, and embedded care instructions extend life cycle value and reflect Gen Z and Gen Alpha values.

• Unified commerce ecosystem and infrastructure: Consumers expect retail to operate with speed, fluidity, and automation. Application programming interfaces, fulfillment intelligence, and Internet of Things (IoT) logistics enable flexible delivery, seamless checkout, and real-time availability.

• Co-creation and community platforms: Consumers want to participate, not just purchase. Creator storefronts, membership design tools, and digital loyalty tiers drive emotional connection and identity alignment.

Investing in the right technologies


We have mapped technologies across three time horizons (figure 3): current and scalable (<2 years), emerging adoption (2–5 years), and speculative (5+ years). While some are ready to scale today, others require more time and investments to fully develop and realize. However, all point toward a digitally fluid, consumer-shaped future.

Figure 3. Deloitte’s fashion technology horizons: Scalable, emerging, and speculative

Fashion brands face a rapidly expanding technology horizon that offers a growing set of options to power the future of omnichannel engagement. This visual maps technologies across five strategic themes and three investment horizons. Together, they represent the evolving portfolio brands must consider as they decide what to invest in, pilot, and/or watch.

While the technology landscape is expanding, not all solutions will yield equal return on investment across retail segments. For example:

• A mass or department retailer focused on affordability and scale, will invest in predictive fulfillment, intelligent automation, and price transparency. By leveraging AI to anticipate demand and optimize inventory across regions, overstock can be reduced, enabling faster and most cost-efficient deliveries. Automation in warehousing and checkout will lower operational costs, leading to a seamless, low-friction customer experience that delivers value at speed and scale.

• A specialty brand, centered on identity and community, will lean into loyalty gamification, agentic AI, and immersive retail experiences. These enable shoppers to become brand advocates. Agentic AI stylists that remember a customer’s preferences and curate personalized looks tied to upcoming product drops or in-store events drive brand affinity. Loyalty platforms can gamify engagement through rewards for sharing content, attending store-hosted creator sessions or participating in design polls. The outcome: stronger emotional connection and a community that drives organic growth.

• For luxury, the stakes are different: intimacy, exclusivity, and heritage come first—technology should elevate the brand, not dilute it. Personalized concierge services powered by AI, immersive digital storytelling that brings craftsmanship to life, or exclusive virtual showrooms are all tools to reinforce exclusivity and status. Luxury houses that use digital product passports not just for transparency, but to unlock curated services like access to legacy pieces and styling history can deepen the emotional value of every purchase.

Ultimately, leaders should align technology investments to their brand’s customer expectations, engagement strategy, and operating model.

The winning brands won’t chase trends; they will build digital advantage that reinforces their brand DNA. The path forward is not about more technology; it is about the right technology, matched to touchpoints that deliver relevance, resonance, and return.

Evolving core retail capabilities


Investing in the right technologies is only part of the equation. To truly deliver on a next-gen engagement ecosystem, fashion brands must also evolve core retail capabilities (figure 4). These retail capabilities—from merchandising to loyalty, inventory to supply chain—must become more intelligent, more predictive, and more integrated.



Figure 4. Deloitte’s fashion retail capability map

Successfully delivering next-generation engagement requires transformation beyond consumer-facing touchpoints. Behind the scenes, core retail functions must evolve to support the intelligence, speed, and personalization today’s consumers expect. This capability map highlights the most critical functions across the retail value chain impacted by digital and omnichannel transformation. Capabilities shaded in green represent the areas of greatest impact, keeping in mind that each fashion brand may be at varying levels of maturity.

For example:

• Customer value and loyalty: As Gen Z and Gen Alpha redefine loyalty through emotional relevance and identity alignment, fashion brands should evolve from transactional programs to intelligent, relationship-based ecosystems. Traditional personalization should give way to AI-driven experiences where agentic shopping assistants proactively curate, adapt, and respond to customers’ context and preferences. Loyalty platforms should gamify engagement beyond spend, rewarding behaviors like content creation, community participation, and advocacy. To enable this, brands need unified customer profiles, embedded analytics, and AI capabilities to power engagement ecosystems built on recognition and reciprocity, not just rewards. 

• Omnichannel inventory management: Omnichannel is the backbone of the future fluid customer ecosystem, but meeting next-gen expectations demands precision, speed, and flexibility. Gen Z and Gen Alpha want to know what’s available, where, and how fast they can get it. That means evolving from static inventory systems to predictive, AI-led fulfillment networks. Distributed order management, real-time replenishment, and micro-fulfillment must come together to create seamless inventory visibility and agile fulfillment. Done right, this capability can not just power logistics but build trust and drive conversion.

• Store operations: As the role of physical stores shifts from transactional hubs to experiential brand touchpoints, store operations should evolve to support flexibility, intelligence, and human connection. Traditional models centered on static layouts and manual processes won’t meet the expectations of Gen Z and Gen Alpha. Capabilities like predictive store management, associate enablement, and inventory organization must be reimagined with AI, IoT, and real-time data at the core. Smart fitting rooms, mobile-assisted selling, and modular layouts powered by shopper behavior insights will turn stores into dynamic environments that adapt to demand and mood. Empowered associates, armed with AI tools and contextual insights, will become experience-makers that bridge the gap between brand storytelling and operational efficiency.

Strategic imperatives for 2030: Future-proofing your business today


Next-gen consumers are rewriting the rules of engagement: moving faster, expecting more, and navigating across platforms with ease. They are not waiting for brands to catch up. With access to emerging tools like AI shopping assistants and AR-enabled experiences, they are already reshaping how they discover, decide, and buy. As these technologies scale, brands must evolve with them and build the capabilities to deliver intelligent, behavior-led experiences that adapt in real time or risk falling behind.

The fashion leaders of tomorrow won’t be those who chase every trend but will likely be those who rewire their organizations to match the speed, complexity, and expectations of the modern consumer.

What can fashion companies do about this today to compete, and lead, into 2030 and beyond?

1. Turn scattered data into strategic advantage

While businesses chase AI strategies, the real competitive edge starts with clean, connected data across systems, channels, and customer moments. To enable personalization and operational agility at scale with speed and precision, data must be actionable, accessible, and integrated across marketing, merchandising, service, supply chain, and more. Without it, predictive engagement and agile decision-making remain out of reach, and AI is just a shiny distraction. Start by mapping where your data lives, establishing a unified data layer and investing in customer and operational data that is in real time, reliable, and ready for activation. 

Ask yourself: Do we have the connected customer and operational data required to act in real time and deliver what truly matters, when it matters most?

2. Design for not only channels, but also behavior

Tomorrow’s customers move more fluidly than ever before, from creator content to smart checkout to resale, without thinking in steps or silos. Engagement ecosystems should reflect how people discover, decide, and buy across signals, platforms, and moments. Success means building adaptive engagement architectures that integrate AI agents, physical and digital touchpoints, and embedded commerce into a single, behavior-led ecosystem. 

Ask yourself: Are we designing ecosystems that follow real behavior, or simply updating the legacy paths we have always had?

3. Think ecosystems, not silos

Loyalty, commerce, content, and community must work in concert; not compete for ownership. A customer does not see separate channels, teams, or systems; they just see the brand. To deliver that unified experience, brands need to operate as ecosystems, not silos. That means integrating tech stacks so data flows across touchpoints, aligning key performance indicators so teams are incentivized to collaborate, and building shared engagement ecosystems that reflect how consumers move. Making this real requires cross-functional squads, shared data access, and a single view of the customer that every team can act on. 

Ask yourself: Can a customer move through our brand without friction, or do we drop them at some of the handoffs?

4. Don’t chase hype: prioritize tech that serves your brand and customer

In a constant stream of new platforms and emerging technologies, the real challenge and opportunity is prioritizing the tools that align with your customers, brand, and business goals. Every technology investment should align with your brand’s DNA, customers’ expectations, and your business model. That means developing a technology evaluation framework grounded in return on investment, brand relevance, and scalability. Conduct more intentional pilots and investments with clear goals and metrics, and don’t be afraid to walk away if they are not part of your value formula. 

Ask yourself: Does our technology elevate both experience and execution, or are we chasing novelty without clear payoff?

5. Prepare for the impact of agentic AI

Autonomous and semi-autonomous AI agents are no longer speculative; they are already shaping how consumers discover, shop, and engage. From proactive shopping companions to embedded styling assistants, agentic AI is changing the speed, scale, and structure of customer interaction. Fashion brands should act now to assess where agentic AI fits in their model: how it can extend service, elevate loyalty, and drive conversion, before the experience is shaped by someone else. 

Ask yourself: Are we ready for a world where AI shops with or for our customers?

Are you building a future-ready brand—one that evolves with your consumer, anticipates what’s next, and leads with purpose into 2030?

1. Jennifer Lacks Kaplan, Ron Offir, and Kasey Lobaugh, “Future of fashion and luxury,” Deloitte, 2025.
2. Capital One, “Omnichannel statistics,” last updated April 28,2025.
3. GilPress, “Gen Z: Statistics, data, and trends,” WhatstheBigData.com, February 4, 2024.
4. NielsenIQ, SpendZ: A global report, June 28, 2024. 
5. US Bureau of Labor Statistics, Consumer Expenditure Survey, 2023 Results: Table 1202 – Income before taxes: Average annual expenditures and characteristics, 2023.
6. Kaplan et al., “Future of fashion and luxury.”, 2024.
7. Ibid. 
8. Deloitte, 2024 Digital Media Trends, accessed July 2025.
9. Deloitte, 2024 Gen Z and Millennial Survey, accessed July 2025.
10. Deloitte, Navigating the digital divide, accessed July 2025.
11. Deloitte, 2024 Digital Media Trends.
12. Katharina Buccholz, “Asia – The live streaming continent,” Statista, March 3, 2025.
13. Arielle Feger, “5 key stats on the rise of agentic AI in retail,” EMARKETER, April 7, 2025.

The authors would like to thank Anita Wu for her contributions to this research.