BCG

FASHIONINDUSTRY

TheAI-FirstFashionCompany

By

SebastianBak

,RoelantKalthof,andBeccaSchwartz

ARTICLEDECEMBER04,20255MINREAD

Thisarticleand

theaccompanyingslidedeck

arepartofaseriesexploringhowcompaniesinspeci?cindustriescanadoptthemindset,expertise,andambitionrequiredtowininanAI-?rstworld.Forasimilarperspectiveondepartmentstores,see

TheAI-FirstRetailCompany.

AIisreshapinghowthefashionandluxuryindustrydevelopsproductsandconnectswith

consumers.Inanindustrybuiltoncreativityandbrandidentity,AIisbecomingacatalystforboth.

ThemostsuccessfulbrandswilluseAItoamplifytheirstrengths,notjustautomatethem.ThebestwayforthemtodothatistobecomeAI-?rstbymakingAIandagentscentraltohowtheyoperatetheirbusinesses.

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WhyNow?

FourconvergingforcesarecreatingmomentumandurgencyforfashiontogoAI-?rst.

ConsumersarealreadyshoppingwithAI.Nearlytwo-thirdsofUSconsumershaveusedAItoolswhentheyshop.Theyusevirtualstylists,personalizedrecommendations,anddigitaldressing

roomstoshapewhattheybuy.AsAIplatformsbecomethefrontdoortodiscovery,fashionandluxurybrandsmust?ndwaystoremainvisible,relevant,anddistinctive.

Technologyisenterprise-ready.AImodelsarefaster,cheaper,andmorecapablethanever.For

fashionbrands,thesetoolscangeneratedesigns,recommendfabrics,predictdemand,andsupportclienteling.

Competitorsareinvestingaggressively.Aeraslowstart,fashioncompaniesareplayingcatchup.TheretailandfashionindustryhasmovedintothetopthreeindustriesincreasingtheirAI

spending.

Talentisscarce.FortypercentofmajorretailandfashioncompanieshaveappointedseniorAI

executives.Slowmoverswillstruggleto?ndleaderswhocanorchestrateteamsofdesigners,datascientists,anddigitalagents.

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What’sNext

AIisrewritingbothsidesoffashion:howconsumersexperiencebrandsandhowcompaniesoperate.

External:AIRede?nestheConsumerExperience

AIplatformslikeChatGPT,Google’sAIMode,andPerplexityrecommendproductsandallow

consumerstobuygoodsdirectly.NearlyhalfofconsumersalreadytrustAI-drivensuggestionsmorethanrecommendationsfromfriends.

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Fashionbrandsfaceastrategicchoiceinhowtoengagewiththesenewchannels.Willtheyplaythedestination,evaluation,orhybridgame?

TheDestinationGame.Somecompaniescanconvinceconsumerstoshopdirectlythroughtheirownchannels,sidesteppingAIplatformstoprotecttheirbrandandmargins.Theywinon

uniqueness:emotionalconnection,distinctivedesign,andiconicexperiences.Hermès,for

example,stayso?fashionmarketplacesandreliesoncrasmanshiptodrawconsumerstotheirownchannels.

TheEvaluationGame.OtherswillintegratewithAIplatformstogainreach.Toberecommendedbydigitalshoppingagents,thesebrandsmustwinonutility:byo?eringthebestproduct?t,fastestdelivery,orbestpriceforagivenneed.Hanes,forexample,sellsonAmazontoexpanditsreach

andattractbrand-agnosticconsumers.

TheHybridGame.Brandscanblendbothstrategies—meetingconsumersonAIplatformswhileconvertingthemtoownedchannels.Theymustdecidewhichproducts,promotions,and

experiencestoputonAIplatformsandwhichtokeepexclusivetotheirownchannel.Nike,forexample,sellsbasicbutnotpremiumshoesonAmazon.

Regardlessofthemodel,visibilityonAIplatformswillbeessential.Leadingbrandsarealreadyinvestingin

answerengineoptimization

sothatchatbotsandvirtualadvisorscanunderstand,trust,andrecommendtheircollections.

Internal:AIAgentsAreTransformingFunctions

AgentsandAIaretransformingfunctionsacrossfashion—frommerchandisingandsupplychaintomarketingandstoreoperations.BrandslikeTi?any&CosupportclientelingwithAI-generated

consumersummariesandrecommendations,whileWalmart’sfashiondivisionusesAItosensetrendsandcutproductiontimebyupto18weeks.

AI-?rstfashionbrandsdon’tjustautomatetasks;theyorchestratedecisions.ThedesignerofthefuturewillleadateamofAIagents:oneforecastingtrends,anothergeneratingdesignvariations,anothersimulatingfabricsand?ts,andoneoptimizingassortmentandpricing.Theresult:fastercreationcycles,moreresponsivecollections,andlesswaste.

Inthisagenticworld,fashionandluxurycompanieswillhavetoguardagainstproductsacquiring

thesame“AIlook”orbrandslosingtheircachet.Theriskisn’tautomationbuthomogenization,

reproducingthesamedesignsoverandover.Brandsshouldensurehumancrasmanshipremainscentral,whileconnectingAItotheiruniqueconsumerdataandinsights.

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HowtoBecomeAI-First

BecomingAI-?rstisn’tjustaboutbuildingAI;it’sabouttransforminghowworkgetsdone.Mosttransformationsfallshort.FashionandluxurycompaniescanimprovetheiroddsbyfocusingonthreemovesdrawnfromearlyAIleaders.

Rewiretheoperatingmodel.

AIagents

allowteamstomakefaster,moreinformedcreativeandcommercialdecisions.Organizationscanmovefromsiloedhierarchiestocross-functional,?atterteams.Designers,technologists,anddataexpertscancollaborateinrealtimeacrossdesign,

merchandising,andmarketing.

Changeleadershipbehaviors.AItransformationsaremorelikelytosucceedwhentheyareledfromthetop.ExecutivesmustmakeAIastrategicprioritybyshowingthroughtheirwordsand

actionsthatitisessentialtothebrand’sfuture.Leadersshouldfocusonafewhigh-valuebetsatatimeandtracktangibleoutcomes.Theyunderstandthatsuccessdependsonpeopleandchangemanagement—

about70%ofthee?ort

—notjusttechnology.

Redirecttechnologyspend.LeadingcompaniesareusingAItoautomatemanualtaskssuchas

reporting,documentation,andcontractaudits.TheyreinvestthosesavingsintoAIenablers:higher-qualitydata(thenewfabricoffashion)andscalableAIinfrastructure.Thegoalisnottospend

morebutsmarter.

FashionisenteringanerawhenAIreshapesbothimaginationandexecution.TheAI-?rstfashioncompanywillmeetconsumersnotonlyinstoresoronwebsitesbutinsideAIplatforms—while

runningfaster,moreadaptive,andmorecreativeorganizationsbehindthescenes.

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RoelantKalthof

ManagingDirector&Partner

SiliconValley-BayArea

Authors

SebastianBak

ManagingDirector&Partner

LosAngeles

BeccaSchwartz

Principal

Seattle

ABOUTBOSTONCONSULTINGGROUP

BostonConsultingGrouppartnerswithleadersinbusinessandsocietytotackletheirmost

importantchallengesandcapturetheirgreatestopportunities.BCGwasthepioneerinbusinessstrategywhenitwasfoundedin1963.Today,weworkcloselywithclientstoembracea

transformationalapproachaimedatbene?tingallstakeholders—empoweringorganizatio