Bain’s 2025 Luxury Market Forecast report paints a turbulent picture for the luxury sector. With macroeconomic headwinds, cultural shifts, and the return of tariff-driven uncertainty, global luxury is navigating its most unpredictable period since the 2008 financial crisis. Tariffs imposed by the new U.S. administration have triggered global price adjustments and dented consumer confidence across key markets. Bain now outlines three possible scenarios for 2025:

Bain’s 2025 Luxury Market Forecast paints a turbulent picture for the luxury sector. With a potential -2% to -5% market contraction considered the most likely scenario, traditional luxury is wobbling.

Meanwhile, Gen Z consumers are questioning luxury’s price-to-value ratio, and once-resilient growth markets like China and the U.S. are losing steam.

In short: traditional luxury is wobbling.

But for custom fashion brands, this instability is a rare window of opportunity. As consumers seek more than just a logo, your strengths in personalization, craftsmanship, and purpose are exactly what the market now craves.

Here are seven strategies to turn this market shift into your brand’s runway for growth.

1.Anchor Your Brand in Purpose, Not Price

Bain’s report asks a provocative question:

“Who are we as a brand, and what do we stand for?”

As consumers grow weary of inflated price tags and rinse-repeat designs, they’re gravitating toward brands with clarity of purpose. This is especially true for younger generations who care as much about why you create as what you sell.

For custom fashion businesses, this is an advantage. You’re not mass-producing trends—you’re solving real needs. Focus on your story. Do you specialize in garments that fit non-standard body types? Do you work with local tailors or source deadstock fabrics? Do you co-create designs with clients? Tell that story. Your brand has soul, and in today’s market, soul sells more than status.

2. Shift from Transaction to Transformation

Luxury’s long-standing model: price + logo = prestige is cracking. Today’s consumers, especially Gen Z and Millennials, are more interested in personal identity and transformation, which is the core strength of custom fashion.

Frame your service as a journey. Create “behind the stitch” content showing how a garment takes shape. Celebrate the client milestones your garments are made for, from weddings to promotions. When you position your service as a transformational experience, you deepen loyalty and increase perceived value.

Ideas to bring this to life:

• Offer personalized storytelling during fittings. Why is this garment important? What moment is it for?
• Create “behind the stitch” content on social media: show how a garment takes shape from pattern to final press.
• Celebrate client milestones: weddings, promotions, anniversaries—turn your work into their life story.

When you position your service as a journey, not a transaction, you deepen loyalty and increase perceived value without needing to raise prices.

3. Embrace the Rise of “Small Luxuries”

Bain’s report points to a rise in accessible indulgences like fragrances and eyewear that feel personal without the sticker shock. This “lipstick effect” applies to fashion, too.

Custom doesn’t always mean couture. Offer entry points into your brand, such as monogrammed button-downs or made-to-order chinos in seasonal colors. This allows you to expand your audience without diluting your brand’s core identity.

By creating entry points into your brand, you expand your audience without diluting your identity. Let new clients start small—and grow with you.

4. Use Fashion Tech to Innovate Past Slower Giants

Big luxury brands are losing agility. They’re retreating from wholesale, struggling to justify 70%+ price increases, and watching their engagement plummet (Bain notes a 40% drop in brand-related searches and a 90% slowdown in social follower growth). As a smaller brand, you can use technology as a multiplier to move faster.

Custom fashion brands can use technology as a multiplier:

• 3D product visualization lets clients preview garments before production begins.
• AI-based style assistants can help build a client’s confidence in their design decisions.
• Digital body scanning ensures precision in fit without lengthy fittings, while also unlocking a new layer of client experience: It transforms the traditional fitting process into a sleek, tech-powered moment of personalization.

These tools are accelerators that make your process more modern and inclusive. Platforms like Scanatic™ Studio allow you to visualize, prototype, and sell designs with no physical inventory required.

5. Build a Community of Belonging

In a volatile market, people crave connection more than status. Custom brands are perfectly positioned to become partners in self-expression and community.

• Spotlight client stories on social media. Who are they? Why did they choose this look? What does it say about them?
• Host events (virtual or live). From style workshops to preview nights, give clients a reason to engage.
• Create loyalty through meaning. Offer repeat clients early access, custom fabric options, or even archive designs others can’t get.

This strategy doesn’t just retain customers, it turns them into your most powerful advocates.

6. Turn Regional Shifts into a Strategic Advantage

While the U.S. and China are slowing, Bain identifies growth pockets in Latin America, Southeast Asia, and the Middle East. For a niche brand, this is a strategic clue.

Micro-exporting occasionwear or gender-inclusive tailoring can unlock new demand. You can achieve this by offering concierge-style remote fittings powered by video and 3D body scans or by partnering with fabric mills already serving these markets.

7.  Evolve Your Creative Identity

Lastly, Bain underscores that price fatigue and creative stagnation are plaguing luxury. But innovation doesn’t mean trend-chasing. For custom brands, it can mean deepening your design language and offering fresh ways to engage.

Keep your vision evolving by introducing rotating seasonal color palettes, collaborating with artists, or reworking archive patterns into modern fits. Customers return for how you see the world.

Customers return not just for what you offer, but for how you see the world. Keep that lens clear and evolving.

The Opportunity in the Downturn

This luxury slowdown isn’t just temporary turbulence; it’s a turning point. Bain calls this a “pivotal new chapter” where brands must redefine value, reconnect emotionally, and rethink how they earn loyalty.

This is your time to step forward smartly and strategically. If you build your brand around what customers truly crave: identity, connection, and meaning, you won’t just survive this shift. You’ll lead it.