As we embark on a promising 2025, the fashion industry continues to face transformative shifts. With mounting regulatory demands, heightened geopolitical uncertainties, and evolving consumer expectations, “business as usual” is no longer an option. Companies that adapt to these changes by innovating and reimagining their business models will emerge as leaders. At Kezzler, we’ve identified three key focus areas for 2025 that can drive success: supply chain efficiency, regulatory compliance and sustainable practices, and customer loyalty.
Supply chain efficiency and visibility
Since the outsourcing of production to low cost countries, the fashion industry has enjoyed high gross margins, with few incentives to reduce production volumes since the cost of stock-outs has been much higher compared to discounting or other ways of disposing of overproduction. However, recent margin pressure from increased costs, combined with more focus on the huge problems related to overproduction and textile waste, means this is no longer the case.
Offshore production often comes with longer lead times, and companies need to invest in better trend and demand forecasting, shorter production cycles, and smaller production batches to build more agile supply chains and become more responsive. This shift is likely to be further fueled both by regulatory requirements such as the ban on destruction of unsold goods, but also by the geopolitical situation with more trade barriers. As a result, we should expect to see more local production (nearshoring) with a higher degree of automation.
Lowering production volumes while still maintaining high service levels also calls for increased focus on inventory accuracy and supply chain visibility, with more widespread use of RFID and visibility events solutions, e.g., powered by GS1’s EPCIS standard. The control and insights offered by such tools can help maintain service levels and healthy margins while—at the same time—reduce waste.
Regulatory compliance and sustainable practices
The EU’s Ecodesign for Sustainable Products Regulation (ESPR) entered into force in 2024. We must wait until 2026 to receive complete details from the delegated act for the textile sector, but the first working plan will be published during the first half of 2025 and the Ecodesign Forum will start to lay the groundwork. We’ll get further insights into the requirements throughout the year, including those on topics like the aforementioned ban on destruction of unsold goods. Other regulations and directives will also come into play in 2025, such as the Deforestation Regulation (EUDR), and more companies will be subject to the Corporate Sustainability Reporting Directive (CSRD). From 2025, as part of EU’s Strategy for Sustainable and Circular Textiles, Waste Framework Directive and Extended Producer Responsibility (EPR), member states will also be required to collect textiles separately. This will help scale sorting, re-use and recycling, and reduce waste.
The lack of regulation has made many consumers unaware of the breadth of environmental and social problems related to the fashion industry. This is now changing dramatically. The closer we get to the most comprehensive aspects of the regulatory requirements, the more awareness is created—separate collection of textiles is a good example of this.
The purpose of the regulations is obvious: we need a more sustainable fashion industry and need to move away from the 99% linear value chain seen today to a more circular model. Companies taking this seriously have already started to adapt to a new future and are investing in greener production and materials. Many companies have also started to implement Digital Product Passports (DPPs), even though the detailed requirements remain unknown. We expect this trend to continue through 2025. Companies realize that waiting for the delegated act’s details may prove to be too late—DPP unlocks many new opportunities, including supply chain visibility and a better response to consumers’ increasing demand for transparency.
Increased consumer awareness leads to two-sided pressure on companies, both from consumers and regulators. We’ve already seen examples of this, with strong growth in secondhand sales as well as an increase in repair services. This will continue into the new year, and brands need to engage and understand how to capitalize on this.
Customer loyalty
With increased consumer awareness around negative impacts stemming from the industry, brand loyalty will be even more tied to ethical practices and values. Personalized experiences will be further aligned with these. “Omnichannel” has been a buzzword used prevalently for years, but the importance of providing a consistent experience across all channels and touchpoints seems more important than ever before. At the core of this lies authenticity and transparency, not only up to the point of sale, but also post-sale. Brands that provide strong post-sale support, such as repair, resale, and end-of-life handling, are more likely to build customer loyalty. With DPP, brands can provide these services in new and better ways, creating even better customer experiences.
Kezzler: Your partner for a sustainable fashion future
As DPP awareness grows among companies and consumers, brands will be expected to lead the way in its adoption. If they haven’t already started, brands should take the opportunity in 2025 to investigate how a digital identity in each garment can be exploited to enhance customer loyalty, considering the entire value chain.
You might also find this interesting
- Our latest solution brief “The power of GS1’s EPCIS 2.0 standard”
- Our white paper “Digital Product Passport: From Concept to Compliance”
- Our work in Cirpass-2
- Learn more about R-strategies in the circular economy