Why Are Consumers So Mad?
The Story: Four big brands – American Eagle, E.l.f., Adidas and Swatch – blundered into controversies in the space of a few weeks, touching on everything from cultural appropriation to eugenics. Why are we suddenly seeing so many of these micro-scandals in the US again? And what can brands do to avoid becoming the internet’s villain of the week?
Why This Is Happening: Fashion is caught between President Donald Trump’s anti-woke crusade and the young, progressive customer base brands covet most.
After Trump took office amid a conservative cultural shift, companies raced to remove mentions of DEI from their websites and back off the proudly inclusive messaging that had become a marketing staple since 2020. They’re being reminded now that those initials actually stood for something – at the very least, a diverse team is more likely to catch an unintentionally racist ad before it goes live – and that Trump isn’t the only one who can initiate a social media pile-on.
Walking a Fine Line: Social media outrage doesn’t always reflect real-world sentiment, and consumers have short memories when a brand they otherwise like missteps (nobody’s talking about Sweeney now that American Eagle has a collaboration with newly engaged Travis Kelce). They’re less forgiving of repeat offenders or hypocrisy, which is why having a strong brand identity, aligning with customers’ values and standing behind those values even while making amends, is so important. This is why E.l.f. skated through its controversy with a wink, while Target recently replaced its CEO after months of declining sales.
No Such Thing as Bad Publicity: One lesson from the last month is that it’s better to be controversial than boring. With tariff-induced price hikes on their way, brands don’t want to give consumers another reason to shop elsewhere. But being left out of the conversation entirely is a surefire way to lose market share in a sluggish economy.
The Trade War’s Aftermath
The Story: After months of uncertainty, tariffs are now fixed at between 15 and 20 percent on most countries with major garment and textile sectors, including Bangladesh, Indonesia, Vietnam and Cambodia. China’s 30 percent rate was extended until mid-November, while India was hit with a 50 percent tariff tied to its importing of Russian oil.
Remaining Questions: The new reality seems set in, if not stone, wet concrete. Tariffs are never truly fixed as long as Trump continues to use them as a cudgel to get what he wants in other areas.
There are also questions about implementation, particularly around the closure of the “de minimis” loophole that allowed shipments under $800 to avoid tariffs. Postal services from Japan to the UK say they will halt parcel shipments to the US when de minimis expires on Friday. It’s not clear how small businesses – and fast fashion giants like Shein – that relied on the exemption will fulfill orders from American customers when that happens.
Trading Down: De minimis aside, Trump has finally removed much of the guesswork around how tariffs will factor into future production costs.
How much of those costs can be passed along to consumers remains open to interpretation. Bargain retailers, from T.J. Maxx to Walmart, as well as at the resale platform The RealReal, all say business is booming. That’s potentially a sign shoppers are trading down, which is bad news for full-price brands.
Key Dates to Watch: Spending hasn’t cratered yet though, and retail stocks have continued to climb. Economic data will play an increasingly important role in setting expectations heading into the holidays, as will the Federal Reserve’s interest rate decision on Sept. 17. Watch for Friday’s release of July’s personal consumption expenditures index, the Fed’s favourite inflation metric. August unemployment data is out on Sept. 5, followed by the consumer price index reading on Sept. 11 and retail sales on Sept. 16.
Redefining Value
The Story: Consumers aren’t waiting for the next inflation reading to ask whether products are worth the price.
The Price Is Wrong: The question of value comes up most often in the context of luxury brands, where consumers seem to have finally said enough to price hikes on clothes that don’t live up to the four or five-figure number on the tag. This month, Louis Vuitton’s makeup launch, featuring a $160 lipstick, offered a new flashpoint.
Caught in the Middle: Contemporary brands are confronting the same questions, and many are flourishing. They face competition from Quince, which reproduces their basics at a fraction of the price and snagged a $4.5 billion valuation in July.
The best of these brands are incorporating design flourishes and unusual materials that are difficult to dupe. Others are moving upmarket out of Quince’s range, inhabiting the void left when big luxury brands hiked prices. Consumers are into it: sales are surging at brands that make good on promising luxurious quality and a designer’s perspective at circa 2017 luxury prices.
What to Watch: Luxury brands need to find their own version of this strategy, and more convincingly sell customers on the idea that their prices are aspirational, rather than ridiculous. and clearly The designer debuts coming in September, both in terms of the creativity and displayed on the runway, and how they are later merchandised, offer a prime opportunity to make this case.
The Sports Gold Rush
The Story: This week, the NFL announced a three-year partnership with Breitling and named Abercrombie & Fitch its official fashion partner. Cadillac’s F1 team reveal was swathed in Tommy Hilfiger branding. On Aug. 28, a WNBA team is staging a fashion show, and at the US Open, the competition to sponsor rising tennis stars rivals the action on the court.
Saturation Point: Again, that was just the partnerships that happened this week. The pairing of sports and fashion is not new, but the sheer saturation certainly is. Sports are so hot, and so singularly capable of reaching a mass audience, that brands are seizing on any opportunity they can, even if it means finding a way to dress American football players covered in helmets and padding. Or as Breitling CEO Georges Kern told BoF this week:
“We don’t have Formula 1, we don’t have the Olympics and we don’t have football. We were looking for a major property and now we are the first luxury brand sponsor of the NFL.”
The Gameplan: Fashion is taking two approaches as the market gets crowded. One is to go deep, sponsoring college athletes (Warby Parker announced Wednesday it had signed Arch Manning, a sophomore quarterback at the University of Texas to a three-year partnership), and finding obscure sports to sponsor (the streetwear brand Brain Dead has released products tied to rock climbing and, this week, disc golf). Or you can go big. Breitling and Abercrombie both had more limited collaborations with the NFL before announcing their deals last week.
A Crowded Field: Fashion had some catching up to do after ignoring the sports opportunity for so long. But the rapidly escalating number and size of these sponsorship deals is starting to feel frothy. There are only so many articles of clothing with your favourite football team’s logo on it that you can own, and only so many sports that can truly become the next tennis or F1. But until that limit is hit, there’s plenty of money to be made.
Learn More: If you want to stay up to date on the latest happenings at the nexus of sports and fashion, sign up for our just-launched newsletter The Kicks You Wear, written by the incomparable Mike Sykes.
What Is AI Good For?
The Story: Speaking of bubbles, the tech world was surprised to hear OpenAI CEO Sam Altman float the idea that AI might be in the middle of one. This came shortly after the company released GPT-5 to mixed reviews, and an MIT study found 95 percent of companies got no return on their AI investments.
Hold On: It’s natural to ask whether fashion’s AI obsession will come to nothing. That’s the wrong takeaway. Altman and the MIT study had the same message: there are likely still some potentially world-changing use cases buried under mountains of hype.
Not Giving Up: Fashion is plowing ahead. AI-generated models keep popping up, whether inside Vogue or (allegedly) a J.Crew ad campaign. AI shopping apps are live. Lululemon this week appointed its first “chief AI and technology officer.”
And Yet: But the doubts do creep in the longer we go without some of AI’s bigger promises becoming reality. Retailers are preparing for AI agents to make purchases on their websites, but no such service is available commercially. Critics love to pick apart the flaws in those AI models (though only the ones they successfully clock as generated images).
Time Will Tell: By the rules of the Gartner hype cycle, AI appears on its way from peak expectations to the trough of disillusionment. It’s in this phase that new technologies either fade away, or follow the “slope of enlightenment” to widespread usage.