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This report examines three significant trends shaping the future of the fashion industry: pop-up spaces, artisanal fashion, and generative AI. These trends reflect changes in consumer preferences and technological advancements, driving the evolution of fashion toward more personalized, sustainable, and engaging experiences.

Pop-up stores have moved beyond short-term experiments. They are now crucial tools for brands to test new markets, create a sense of urgency, and engage consumers in innovative ways. As e-commerce grows and consumer behavior shifts, pop-up stores are becoming an integral part of omnichannel retail strategies. Over the next decade, these stores are expected to incorporate more advanced technologies, such as augmented reality (AR) and artificial intelligence (AI), to enhance the customer experience.

Artisanal fashion is experiencing a resurgence. More consumers are seeking sustainability, authenticity, and craftsmanship in the products they purchase. This trend highlights a shift toward conscious consumption, where customers prefer unique, handmade items over mass-produced fashion. Over the next ten years, demand for sustainable, artisanal fashion will likely increase, with brands preserving traditional techniques while integrating modern design.

Generative AI is revolutionizing fashion by transforming how products are created, marketed, and sold. AI allows brands to optimize their supply chains, improve creativity, and personalize customer experiences. Generative AI also opens new possibilities for product design, making it easier to create customized items at scale. In the next decade, AI is expected to play an even greater role, enhancing efficiency and innovation across the fashion industry.

This report offers an analysis of how these trends have emerged and developed and how they might evolve over the next ten years. Supported by research and data, the report concludes that these trends will continue to shape the future of fashion, aligning with consumer values and technological progress. Key visuals and research insights provide a clear understanding of the direction in which the fashion industry is headed.

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The fashion industry is changing rapidly. New technologies, consumer behaviors, and sustainability concerns are all playing a role. This document explores three key trends driving these changes: pop-up spaces, artisanal fashion, and generative AI.

These three trends were chosen because they represent the key forces shaping the fashion industry today. They reflect the intersection of innovation, culture, and commerce. Pop-up spaces meet the rising demand for retail that feels personal, flexible, and immersive. They also offer brands more adaptability in a post-pandemic world. Artisanal fashion speaks to consumers who value sustainability, authenticity, and cultural meaning. It brings attention back to local makers and traditional skills. Generative AI shows how fast the industry is moving toward digital solutions. It helps brands design, forecast, and personalize faster and more accurately. It also improves how brands manage operations and make decisions. Together, these trends highlight how fashion is changing across physical, ethical, and digital levels.

Pop-up stores have evolved from temporary retail experiments to essential tools for brand marketing. They create immersive, short-term experiences that engage shoppers in new ways. Pop-up stores can appear anywhere, offering brands the flexibility to reach different audiences and test markets.

Artisanal fashion is also growing in importance. As consumers increasingly seek sustainability and authenticity, traditional craftsmanship is making a comeback. Artisanal fashion values unique, handmade products that tell stories. It reflects a shift toward mindful consumption, with consumers supporting local artisans and preserving cultural heritage.

Generative AI is the third key trend. This technology is transforming the way fashion brands create, market, and sell products. AI helps brands design new products, predict trends, and personalize the shopping experience. It also allows brands to streamline operations and make more data-driven decisions.

This report explores how these trends are shaping the future of fashion and their potential impact on the industry.

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EMERGENCE

The pop-up store concept has a rich history that draws from various cultural and commercial influences. Its origins can be traced back to the vibrant European Christmas markets, particularly the Vienna December Market in 1928. These markets featured temporary installations and seasonal products, laying the foundation for what we now know as pop-up retail. However, the modern pop-up store began to take shape in 1997 with the Ritual Expo.

In the early 2000s, pop-up shops began to gain momentum, particularly in cities like New York and London. Independent designers, emerging artists, and entrepreneurs utilized these temporary retail spaces to showcase their products and test new markets without the commitment of long-term leases. (Matson, P., 2024). By 2009, pop-up stores had expanded beyond fashion and into other industries, such as food and beverage. These temporary spaces continued to leverage the principles of transience and exclusivity, creating a sense of urgency and offering unique experiences and products. The pop-up store model traces its roots back to traveling merchants in ancient times, but it gained significant popularity in the early 21st century. Retailers began using pop-ups as part of their omnichannel strategies. Rei Kawakubo, the founder of the Japanese fashion brand Comme des Garçons, opened her first pop-up store in Berlin in 2004. The store attracted large crowds by offering regular-priced merchandise, creating urgency. This concept continues to influence shoppers today. (Columbine, L., 2024).

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DEVELOPMENT

Retail spaces have traditionally focused primarily on product display and sales. However, the rise of e-commerce in the late 20th and early 21st centuries challenged this model, leading to a decline in brick-and-mortar stores. As a result, pop-up stores initially emerged as short-term solutions for brands to test new markets and increase brand awareness. Over the past decade, the role of pop-up stores has evolved. Instead of focusing solely on sales, these spaces now prioritize consumer engagement, shifting from transactional environments to experiential ones. Reinartz, W., Wiegand, N., and Imschloss, M. (2020) noted that Retail Insider (Patterson, 2017) declared 2018 "the year of the pop-up" in recognition of the significance of this retail format, which is valued at $50 billion globally (Rudkowski, J., Heney, C., Yu, H., Sedlezky, S., and Gunn, F., 2019).

ttempts to quantify Gen Z – those born after 1995 – are becoming more frequent, and for a good reason. By 2020, Gen Z will become the largest consumer group worldwide. The needs and habits of this group will inform not only the next generation of shoppers, but also the future of retail.

They are less pampered and more worried about money than Gen Y has been, having grown up with the 2008 financial crisis. They embrace the sharing economy, and like to buy less but better quality. Retail spaces in Asia are starting to adapt, becoming more social and flexible, less about the shopping and more about the experience.

Gen Z is over-connected, playing with multiple devices all the time, yet they prefer to interact in person. Although 77% have a bank account, only 38% make most of their purchases online, a recent survey by US-based research agency Sparks & Honey found. 43% favour brick-and-mortar shops. They have the power to hop between retailers – at physical and online stores – comparing prices and sharing pictures as they go. The enormous amount of information they have access to means they are savvy shoppers, and often turn to trusted curators for the most relevant experience.

New emerging retail formats appearing in Asia are different from a traditional shopping mall. Targeting Gen Z’s need for newness, the spaces are flexible and can be easily converted from a retail shop to an event area. The tenant mix is often temporary, featuring trending brands for a limited period of time.

Gen Z do not want a hard sell. They are looking for an opt-in service culture with a two-way dialogue. Stores need to offer compelling, brand-led experiences more about aspirational browsing and less about a direct push for transactions. A store's success as an aspirational marketing tool will need to be as high up in the matrix as sales.

Gen Z are savvy shoppers and retailers are offering more frequent deals to draw them in. Sales periods have extended from end-of-season to festivals popular among young consumers in Asia, particularly Valentine’s Day and Halloween.

Beyond offering discounts, retailers are appropriating these non-native events with themed experiences to give shoppers more reasons to visit stores.

Gen Z grew up in a world where options are limitless but their time is not. As such, they have adapted to quickly sorting through enormous amounts of information and rely heavily on trending pages to collect the most popular, relevant content.

Many retailers have developed smaller retail formats and a tightly edited merchandise selection to help Gen Z shrink their options down to a more manageable size.

Gen Z is as socially conscious as it is brand conscious. Studies show this generation has a real desire to change the world and, as a result, support brands that are good for society. Ethical and sustainable practices resonate strongly with Gen Z, and retailers in Asia have been subtly building up their green profiles and increasing transparency.

Genuine effort is key as Gen Z is also pragmatic. Retailers have to refrain from green washing or exaggerating their sustainability commitments, and simply ensure their efforts are visible and searchable (Wgsn.com. (2019)

Brands need to continue leveraging offline touchpoints such as pop-ups to create unexpected discoveries, win mind share with memorable experiences and capture emotional spending inspired by unexpected moments of joy, or Glimmers, to meet new omnichannel shopping behaviours.

Amid a maturing retail landscape, Asian shoppers with growing mall fatigue are seeking novelty and excitement through pop-ups. This drives the need for brands to balance a more permanent brick-and-mortar presence with a rotating roster of pop-ups to maintain relevance. With the shift to online for final transactions, brands must embrace the new role of pop-ups centred more on product discovery and brand education than just purchases.

To succeed in this evolving landscape, brands must create unmissable memory-making experiences. Emotionally rich storytelling will be key, as will interactive and fun ‘beyond retail’ third spaces powered by lifestyle extensions and cross-industry collaborations. Bigger will also continue to be better as hyperphysical activations evolve into fully fledged location takeovers.

Key strategies

Embrace interactive playscapes: fight pop-up fatigue and create rich, sensorial, unmissable experiences with pop-ups steeped in fun and play. Reimagine pop-ups as tech-enabled entertainment hubs and meaningful playgrounds where shoppers can find joy and create treasured memories over simply buying things.

Be bold with location takeovers: make an outsized impact among shoppers through large-scale takeovers underpinned by a focus on community and culture. Double down on hyper-physicality with large-format takeovers. This will turn your pop-up into a destination in its own right, underpinned by hyperlocal themes, creative collaborations and community events.

Push new boundaries for co-branded experiences: inject more novelty with unexpected cross-industry collaborations. Blend different brand identities to create novel experiences and innovative products, expanding your reach and renewing excitement around your brand.

Help shoppers slow down: align with new aspirational codes around leisure and slowness by creating mindful spaces that act as ‘pockets of pause’. Luxury and premium brands should turn pop-ups into momentary spaces of comfort and calm to cater to new aspirational codes built around slowness and leisure.

Case Study

Tapping into the rise of fandom-led spending, South Korean luxury eyewear brand Gentle Monster’s Tekken pop-ups across Tokyo, Seoul, Shanghai, and Beijing featured AR photobooths where shoppers could transform themselves into unique Tekken 8-style characters. By collaborating, Gentle Monster and Tekken are better able to engage each other’s audiences. The partnership unites high fashion and gaming to create a product that appeals to consumers from both industries. By offering an interactive experience that allows fans to participate in the collaboration, both brands are generating buzz. Inspired by the Tekken character Kazuya Mishima, the INFERNO frames showcase how storytelling can be integrated into product design. The bold design of the frames, which mimics Mishima’s iconic horns, elevates them from being just a pair of glasses to a collectible item for fans. These pop-up events and unique designs effectively increase organic engagement on social media (Team, K. (2024).

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FEATURE

Retail Week’s Talking Shop report showed that 89% of store staff believe prospective stores will introduce more tech, while 75% believe stores will become more experiential. (Retail-week-connect.com., 2025).  “We’ve seen many retailers abandon physical checkouts, replace them with mobile point-of-sale technology, and redesign stores around central seating areas where customers can wait while they are served.”

Key Retail Insight: The ‘phygital’ shopping experience is here to stay

The phygital model is an omnichannel strategy that combines digital elements to a brick-and-mortar store, or physical elements to an online store, offering a connected and seamless customer experience. The importance of fusing a physical storefront with digital elements and vice versa is crucial, given that consumers still prefer the in-person approach, but always check every product or service online.

Streamlining online and offline operations provides an immersive customer journey that is direct, interactive, and targeted. A phygital strategy will keep your customers engaged, making their shopping lives easier, increasing AOV, and boosting brand loyalty. Moreover, promoting your brand both online and offline will make your business more credible and build awareness around your name.

One of the many perks of a phygital approach is personalized recommendations and services, which can be achieved by merging data through disparate sources and touchpoints. Creating unified customer profiles will aid all retail businesses understand the needs of their audience and address them with no friction (Mckinsey (n.d.).

We are entering the world of “phygital”—physical and digital at the same time, where there is not a physical world or digital world in retail, but rather a completely connected one. More than 30 to 40 percent of cosmetics in Asia are being sold online. This will expand even more in the future. So, ten years from now, for certain product categories, the main part of the sale will be online, and you will only have flagships—for “showrooming”—in physical retail. There are companies out there that are personalizing the sounds you hear in the store and the scents that you smell. They’re personalizing what the associates know about you to help you find the right product more quickly. You’re going to see digital mannequins that quickly change what they’re wearing based on who you are and what you might be holding in your hand. You’ll see a lot more in-store experiences to help you engage with the product, touch and feel it, and get to know it. But when you go to buy the product, you might not just be grabbing it off the floor and walking out the door like you do today. It might be coming out of the back room, it might meet you in your car, or it might meet you at home (Adhi, P., Hazan, E., Kohli, S. and Robinson, K. (2021).

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EMERGENCE

Tailoring traces its roots back to ancient Egypt, where the earliest sewn garments were created from simple linen wrap. In Greece and Rome, tailoring techniques became more sophisticated, with garments like the toga and tunic that required precise cutting and stitching. Early tailors worked with basic tools such as needles made from bones and sinew threads. The medieval period saw the emergence of tailoring guilds in Europe, where professional tailors honed their skills and developed more intricate clothing styles. Clothing became a symbol of social status, with the wealthy commissioning elaborate outfits. The Renaissance period brought advancements in tailoring techniques, including using patterns and introducing padding to create structured silhouettes (Rockofeye, 2024). During the Zhou dynasty, China was the only country that knew the secret of sericulture. However, silks were traded internationally along the "Grassland Silk Road." This trade route was especially active from the 5th to the 3rd centuries BCE. Chinese silks traveled across the Altai Mountains and the Mongolian plateau into the steppes. Archaeological sites like the Pazyryk tombs in Siberia provide evidence of Chinese fabrics found in these regions (International for Asian Studies, 2021).

Long considered a sunset industry in industrial societies, the textile and clothing industries nonetheless continue to maintain a significant presence in the European Union (EU), both in terms of employment (more than 2 million people) and contribution to GDP. Since they are dominated by many small and medium-sized enterprises typically concentrated in particular regions, they also assume a cultural and social cohesiveness function (Stengg, 2001).

Over the four years between 1999 and 2002 (the latest for which data are available), employment in the EU clothing industry fell by 18% and employment in textiles by 10%. Given the labor-intensive nature of clothing production, productivity gains have been more likely to be achieved in the clothing industry than in textiles, where capital intensity has become the norm. Textiles are more fragile than initially thought, and yet clothing remains an important part of the local economy in many EU countries – doing so, albeit with difficulty, by embracing new ideas and technologies. This goes somewhat against the standard logic of optimal efficiency of wage rates and labor markets, which should lead to the demise of clothing and further mechanization of textiles in high-wage economies (Taplin, I.M., 2006).

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DEVELOPMENT

Labor-intensive industries, often with low levels of technical innovation and minimal capital requirements, they have experienced considerable competitive pressure in recent decades from low-wage, newly industrialized countries whose imports have penetrated Western markets. (Taplin, I.M. ,2006).

Handmade customization is revived by "sustainable fashion.” Sustainable fashion values ​​craftsmanship and traditional artisan techniques, which are often passed down from generation to generation. By supporting brands that value this craftsmanship, consumers can help protect cultural heritage and promote design diversity. In addition, incorporating traditional crafts into modern fashion design adds uniqueness and authenticity to the product. By choosing sustainable fashion, consumers can accept clothing with stories and connect with the skillful hands and cultural history behind each piece of clothing. (McCaffrey, C.,2023). As climate change and anti-fast fashion rhetoric continue to heat up, craftsmanship related to conscious consumption is on the rise. According to Pinterest, the number of pins for "thrift store crafts" has increased by 2,276% as manufacturers seek sustainable production concepts and materials. Here are the main trends in the field of ecological production (WGSN Interiors Team, 2020).

Craftsmanship plays a strategic role in high fashion. Preserving cultural heritage and enhancing craftsmanship are important to creating luxury brands (IED, 2015).

CASE STUDY

The third-generation heir, Mariano Rubinacci, and his children, Luca and Chiara, continue the tradition, but face a shortage of young craftsmen, with annual production falling from 1,500 sets 10 years ago to 750 sets. The birth rate in Italy has dropped, and the traditional tailor apprenticeship system has declined, making it difficult for the older generation of craftsmen to find successors113. A fully customized suit takes 40-60 hours to make by hand, with a starting price of £4,000. Although market demand is stable, production capacity is limited. (Nast, C. (2023). Then, through customized services, material waste is reduced, the resource life cycle is extended, young tailors aged 20-30 are hired first, and traditional skills are passed on through the "apprenticeship system" to ensure the continuity of craftsmanship from generation to generation. (Cvetkovic, A., 2015). The third-generation heir, Mariano Rubinacci, and his children, Luca and Chiara, continue the tradition but face a shortage of young craftsmen, with annual production falling from 1,500 sets 10 years ago to 750 sets. The birth rate in Italy has dropped, and the traditional tailor apprenticeship system has declined, making it difficult for the older generation of craftsmen to find successors 113. A fully customized suit takes 40-60 hours to make by hand, with a starting price of £4,000. Although market demand is stable, production capacity is limited. (Nast, C. (2023). Then, through customized services, material waste is reduced, the resource life cycle is extended, young tailors aged 20-30 are hired first, and traditional skills are passed on through the "apprenticeship system" to ensure the continuity of craftsmanship from generation to generation. «Instead of ordering and producing new fabrics, we use our archive for ready-made apparel too. Of course, pieces are very limited, and we cannot offer all sizes since we only focus on our bestsellers. Plus, we also allow creating made-to-order pieces, choosing from different fabrics, Luca Rubinacci concludes. For these ready-made, unique pieces made with vintage fabrics, Rubinacci set a fair price: «We don’t want to raise our prices because the fabric is vintage, and it has already been amortized so that we can offer high-quality fabrics at a reasonable priceﬂ (Bellotto, M., 2022).

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FUTURE

With the global handicrafts market size expected to grow significantly and an emphasis on sustainable and eco-friendly trends, the industry is at a critical juncture, influenced by consumer preferences, technological advancements, and the push for sustainable development.

Sustainability is an important trend, as people are increasingly interested in eco-friendly and sustainable handicraft materials. This shift towards sustainability is good for the environment and saves costs on handicraft supplies. The emphasis on sustainability is perfectly aligned with the inherent nature of handicrafts, which often use local renewable resources and traditional techniques and have a lower carbon footprint than mass-produced goods.

The digital revolution has greatly impacted the way handicrafts are marketed and sold. The shift from traditional retail to online markets has not only expanded the reach of handicraft producers but also made unique handmade products more accessible and democratized to consumers around the world. E-commerce platforms such as Etsy, Amazon Handmade, and eBay have opened up global markets for artisans, providing them with the opportunity to showcase their products to a global audience.

In addition, the incorporation of technology into crafts through digital tools and artificial intelligence has opened up new avenues for creativity and innovation. Technologies such as 3D printing have also opened up new possibilities for artisans, allowing them to create complex designs and utilize materials in previously unimaginable ways. Healthy craftsmanship, inclusivity and diversity, and technology integration into traditional crafts are all trends that highlight the industry's dynamic nature.

The future of handicrafts looks promising, with strong growth expected in emerging markets and a rising demand for sustainable, unique products. The industry is projected to grow at a compound annual growth rate (CAGR) of 11.8% from 2024 to 2032, reaching USD 2,149.93 billion by 2032. In the short term, the global handicraft market is expected to increase from USD 1,007.07 billion in 2023 to USD 1,972.32 billion by 2030, at a CAGR of 10.08%. Additionally, the handicrafts market will grow at a CAGR of 4.7% from 2023 to 2030, reaching USD 983.12 billion by 2030.

This growth is driven by the increasing demand for eco-friendly products, the rise of e-commerce, and the integration of technology in production. As the industry evolves, artisans must adapt to new technologies and market trends. Embracing sustainability, e-commerce, and technological advances will allow artisans to create innovative products that appeal to a global audience.

The COVID-19 pandemic has shifted consumer behavior, with more people seeking unique, personalized handmade items. Social media platforms have made it easier for artisans to showcase their work and connect with customers. In conclusion, the handicraft industry is set for significant growth in the coming years, fueled by emerging markets, sustainability, and technology. Artisans who embrace these trends will be well-positioned to succeed in this dynamic market (Sachdeva, T. , 2024).

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EMERGENE

Artificial intelligence (AI), is the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings. The term is frequently applied to the project of developing systems endowed with the intellectual processes characteristic of humans, such as the ability to reason, discover meaning, generalize, or learn from experience (Copeland, B.J. (2025).

The history of Artificial Intelligence is a journey of breakthrough transformation from philosophical thoughts to practical applications, reshaping many industries worldwide. Originating from the Dartmouth Conference in 1956, AI was officially recognized as an independent discipline. Thanks to the backpropagation algorithm, the field has experienced important milestones, including the revival of neural networks in the 1980s. Landmark achievements such as Deep Blue's victory over the world chess champion in 1997 and the emergence of big data in the 21st century have opened a new era for AI (Groove Technology - Software Outsourcing Simplified. , 2020).

The interaction of massive data resources and transformative technologies is driving artificial intelligence into an era of unprecedented capabilities and innovation. The explosion of digital data in the 21st century has revolutionized the development of artificial intelligence, providing the power needed for advanced machine learning systems. Big data enables algorithms to discover patterns and make predictions with unprecedented accuracy (Groove Technology—Software Outsourcing Simplified, 2020).

Founded in 2011 and headquartered in San Francisco, Stitch Fix has disrupted the fashion retail industry. Through customer input and the collaboration of AI and human stylists, the online styling subscription service eliminates the need for customers to go out and buy clothes or even browse online, as they regularly deliver personalized recommendations directly to customers' doorsteps, marking the landing of AI in the consumer experience. (Marr, B., 2018).

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DEVELOPMENT

While still nascent, generative AI has the potential to help fashion businesses become more productive, get to market faster, and serve customers better (Harreis, H., Koullias, T., Roberts, R., and Te, K., 2023). Artificial Intelligence is rapidly evolving and already being used in many sectors, including the fashion industry. Moreover, since its breakthrough in 2023, AI has been revolutionizing the way fashion is produced, marketed, and consumed. Moreover, according to the findings from the BoF-McKinsey State of Fashion 2024 Survey, “73% of fashion executives said generative AI will be a priority for their businesses in 2024.” Although there is much controversy around AI’s integration into everyday life, there is also much for businesses to gain through AI fashion (Hafeez, I.Z., 2024).

Artificial intelligence is not a new concept, but it is constantly evolving. Generative AI, in particular, is gaining prominence. It’s the technology capable of generating text, images, sounds, animation, 3D models, or other media types using generative models. Popular examples of generative AI are ChatGPT, Google Bard, DALL-E, & GitHub Copilot. A report by Bloomberg states that the generative AI market is estimated to reach $1.3 trillion by 2032. Another report by McKinsey states that generative AI has the potential to reduce the average worker’s workload by 60% to 70%. This equates to 40% of all working hours in the day. According to Glassdoor, the average salary for a generative AI engineer in India is 11 lakhs per annum, and in the United States, it is $153,000 per annum. Companies like Amazon, Netflix, & Meta are paying salaries as high as $800,000 for a senior director role with a generative AI tools skill set (Saurabh, 2017).

Foundation models and generative AI can be used across the fashion value chain. (Harreis, H., Koullias, T., Roberts, R. and Te, K. , 2023).

Merchandising and product:

Convert sketches, mood boards, and descriptions into high-fidelity designs (for example, 3-D models of furniture and jewelry).

Enrich product ideation by collaborating with AI agents that generate creative options (for example, new ideas and variations) from data (for example, past product lines, inspirational imagery, and style).

Customize products for individual consumers at scale (for example, eyeglasses based on facial topography).

Supply chain and logistics:

Support negotiations with suppliers by compiling research.

Augment robotic automation for warehouse operations and inventory management through real-time analytics (for example, insights enabled by augmented reality, or AR).

Tailor product return offers are based on individual consumers.

Marketing:

Identify and predict trends to improve targeted marketing from unstructured data (for example, consumer sentiment, in-store consumer behavior, and omnichannel data).

Automate consumer segmentation at scale to tailor marketing initiatives.

Generate personalized marketing content based on unstructured data from consumer profiles and community insights.

Collaborate with AI agents to accelerate content development and reduce creative blocks for in-house marketing teams.

Digital commerce and consumer experience:

Structure and generate sales descriptions based on past successful sales posts.

Personalize online consumer journeys and offers (for example, web pages, and product descriptions) based on individual consumer profiles.

Tailor virtual product try-ons and demos to individual consumers (for example, clothing try-ons, and styling recommendations).

Enhance intelligent AI agents (for example, conversational chatbots and virtual assistants) and self-service to address advanced consumer inquiries (for example, multilingual support).

Store operations:

Optimize store layout planning by generating and testing layout plans under different parameters (for example, foot traffic, local consumer audience, and size).

Optimize in-store labor to avoid bottlenecks such as gaps in staff allocation and theft detection through real-time monitoring of video data.

Support AR-assisted devices to better inform the workforce in real-time on products (for example, condition, assortment, inventory, and recommendations).

Organization and support functions:

Coach sales associates to sustain successful “clienteling” relationships via real-time recommendations, feedback reports, and high-value consumer profiles.

Develop individualized training content for employees based on role and performance.

Enable self-serve and automate support tasks (for example, HR tickets, accounting for large documents, review of legal documents).

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FUTURE

Sales

Generative AI could also change the way both B2B and B2C companies approach sales. The following are two use cases for sales:

Increase the probability of sale. Generative AI could identify and prioritize sales leads by creating comprehensive consumer profiles from structured and unstructured data and suggesting actions to staff to improve client engagement at every point of contact. For example, generative AI could provide better information about client preferences, potentially improving close rates.

Improve lead development. Generative AI could help sales representatives nurture leads by synthesizing relevant product sales information and customer profiles and creating discussion scripts to facilitate customer conversation, including up- and cross-selling talking points. It could also automate sales follow-ups and passively nurture leads until clients are ready for direct interaction with a human sales agent.

Our analysis suggests that implementing generative AI could increase sales productivity by approximately 3 to 5 percent of current global sales expenditures.

This analysis may not fully account for the additional revenue that generative AI could bring to sales functions. For instance, generative AI’s ability to identify leads and follow-up capabilities could uncover new leads and facilitate more effective outreach, bringing in additional revenue. Also, the time saved by sales representatives due to generative AI’s capabilities could be invested in higher-quality customer interactions, resulting in increased sales success (McKinsey, 2023).

Customer operations: Improving customer and agent experiences:

Generative AI has the potential to revolutionize the entire customer operations function, improving the customer experience and agent productivity through digital self-service and enhancing and augmenting agent skills. The technology has already gained traction in customer service because of its ability to automate interactions with customers using natural language. The research found that at one company with 5,000 customer service agents, the application of generative AI increased issue resolution by 14 percent an hour and reduced the time spent handling an issue by 9 percent. It also reduced agent attrition and requests to speak to a manager by 25 percent.

Customer self-service. Generative AI–Fueled chatbots can give immediate and personalized responses to complex customer inquiries regardless of the language or location of the customer. By improving the quality and effectiveness of interactions via automated channels, generative AI could automate responses to a higher percentage of customer inquiries, enabling customer care teams to take on inquiries that can only be resolved by a human agent. We estimate that generative AI could further reduce the volume of human-serviced contacts by up to 50 percent, depending on a company’s existing level of automation.

Resolution during initial contact. Generative AI can instantly retrieve data a company has on a specific customer, which can help a human customer service representative more successfully answer questions and resolve issues during an initial interaction.

Reduced response time. Generative AI can cut the time a human sales representative spends responding to a customer by providing assistance in real time and recommending the next steps.

Increased sales. Because of its ability to rapidly process data on customers and their browsing histories, the technology can identify product suggestions and deals tailored to customer preferences. Additionally, generative AI can enhance quality assurance and coaching by gathering insights from customer conversations, determining what could be done better, and coaching agents.

We estimate that applying generative AI to customer care functions could increase productivity at a value ranging from 30 to 45 percent of current function costs.

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•By 2035, the fashion industry will be defined by a blend of digital and physical experiences. Pop-up stores will continue to play an important role, evolving with new technologies like augmented reality and AI. These stores will become spaces for immersive experiences, offering more than just products.

• Artisanal fashion will continue to grow as consumers prioritize sustainability. They will seek products that reflect their values—such as craftsmanship, authenticity, and environmental consciousness. As younger generations demand ethical practices, the demand for locally made, sustainable fashion will increase. Supporting traditional craftsmanship will be seen as a way to protect cultural heritage while meeting modern consumer expectations.

• Generative AI will continue to drive efficiency and creativity across the fashion industry. AI will help brands design products faster, predict consumer trends, and manage inventory more efficiently. It will also enable highly personalized shopping experiences, making it easier for consumers to find what they want across both online and offline channels.

• In conclusion, the fashion industry’s future will be shaped by pop-up spaces, artisanal fashion, and generative AI. Brands must adapt to these trends by integrating technology and sustainability. The industry will be more innovative, conscious, and consumer-focused, offering a seamless blend of creativity and responsibility.