Retail Insights Report 2025: The evolution of buying in fashion retail

Fashion retail has reached a structural inflection point as the industry shifts from intuition-based buying to data-first decision-making. According to the 'Retail Insights Report 2025' by US-based B2B platform NuORDER by Lightspeed, 68 percent of senior retail leaders now rely on quantitative data as their primary forecasting tool.

The study, which surveyed 60 senior retail directors and executives from enterprise-level retailers with annual revenues exceeding 50 million dollars, highlights a seismic shift in operational priorities. While profitability remains the paramount business objective for 87 percent of respondents, the methods to achieve it have evolved toward risk management and technological integration.

Artificial intelligence doubles as core profitability driver

Investment in artificial intelligence (AI) and automation has doubled over the past year. Adopting AI-based forecasting grew from 11 percent in 2024 to 17 percent in 2025, as retailers seek more dynamic, forward-looking demand planning.

Retail client director Ashley Collins noted that while hard analytics are taking a front seat, the art of buying is evolving rather than disappearing. Data and AI now guide demand forecasting and assortment planning, while human instinct is increasingly reserved for understanding cultural shifts and creative taste.

Product mix optimization outweighs cost-cutting

Retailers are moving away from pure cost-cutting strategies in favor of optimizing their product mix to protect margins. The report identifies the following primary tactics for increasing profitability: Optimizing the brand and product mix (63 percent), reducing inventory risk (57 percent) and building customer loyalty and confidence (62 percent).

VP of retail programs Danielle Fairfield stated that mix optimization strikes the necessary balance between profitability and experience. By curating the right product selection, retailers aim to drive stronger sales while minimizing excess inventory.

Sustainability takes temporary back seat to margins

Customer-centricity has become a baseline requirement, with 62 percent of retailers doubling down on personalization and 52 percent prioritizing omnichannel convenience. However, sustainability has slipped in priority, cited by 25 percent of respondents in 2025 compared to 39 percent in 2024.

This shift reflects a short-term trade-off as retailers navigate a margin-pressured environment. Industry leaders suggest that retailers may need to focus on achievable, high-impact areas of sustainability that align with immediate profitability, such as encouraging click and collect to reduce shipping costs.

Focus on channel discipline over expansion

Strategic growth in 2026 is characterized by channel discipline rather than aggressive expansion. Only 48 percent of retailers plan to open new storefronts in 2025, a significant decrease from 62 percent in 2024.

Instead, fashion executives are focusing on maximizing existing sales channels and strengthening strategic partnerships. Successful retailer-brand collaborations are now defined by product differentiation and data-backed proof points rather than traditional volume-based relationships.

This article was created with help from AI.