The ethical fashion market in 2025

The 5 drivers of sustainable fashion growth

1. Raised consumer awareness & increased scrutiny
   Fashion continues to be one of the most unsustainable industries on the planet, responsible for 3–5% of global carbon emissions. Awareness of its impact has reached new heights and consumers are increasingly scrutinising brands’ practices and demanding greater transparency. According to McKinsey’s 2023 State of Fashion report, 80% of consumers now say that sustainability is an important factor when selecting a fashion brand to buy from.

2. Innovations in material use & circular business models
   Growing interest in ethical fashion has brands reimagining their entire supply chains to reduce resource use, minimise waste and increase the durability of products. Innovations in raw materials can not only benefit the environment but also offer unique selling points for fashion brands, while circular business models further extend the lifespan of products and engage new customer segments.

3. Technological advances allowing greater traceability & transparency
   Technology has played a crucial role in enhancing traceability and transparency within the fashion industry. Blockchain and supply chain tracking systems are being used to provide consumers with detailed information about the production process and the origin of materials. This transparency builds trust and allows consumers to make informed choices.

4. A generational shift in taste with Gen Z & Millennials
   Millennials and Gen-Z now make up a considerable portion of the consumer cohort. They are increasingly willing to pay a premium for sustainable fashion, making sustainability a key selling point for brands looking to cater to this demographic.

5. Improvement in digital channels & logistics
   The digital transformation of the fashion industry has opened up new avenues for ethical brands beyond their local markets. New digital channels and optimised logistics are enabling them to profitably reach a huge international audience with a direct route to the global market. This shift has allowed ethical fashion to thrive even in the face of a changing retail landscape.

Retail trends accelerated by COVID-19

The COVID-19 pandemic accelerated several trends in the retail industry, which impacted the ethical online fashion market in the process.

The ‘death of the high street’

Even before the pandemic, the high street was struggling to deliver the sales growth fashion brands were seeking. Declining footfall, a failure to adapt to changing consumer demands and the loss of market share to pure-play brands has contributed to its decline.

Proliferation of e-commerce

Increased accessibility and improved logistics had led to runaway growth in e-commerce. The pandemic only amplified the shift towards online shopping as it became the go-to option for many consumers during lockdowns, and this trend is likely to persist.

Digital marketing

Growing sophistication in digital marketing has increasingly been required to drive attractive acquisition costs across paid media. Results will increasingly accrue to brands able to recruit and retain this talent.

Growth of premium lifestyle

Shoppers are increasingly focused on authenticity and experience, leading to the premium lifestyle market becoming one of the fastest-growing sectors in the UK apparel market, almost doubling since 2009 and estimated to be worth over £2.7 billion.

Rise of ethical shopping

Consumers' mindsets have shifted significantly, with a growing recognition of the consequences of fast fashion. Online searches for sustainable fashion and fabrics have seen substantial growth as consumers seek out ethical alternatives to throwaway fashion.

A post-pandemic shift in sustainability attitudes

Sustainability attitudes have not only persisted but have improved over the last three years. Importantly, sustainability is no longer solely a trend among the young; it's gaining traction across generations. A substantial 6% increase from 2021 indicates that 40% of consumers now choose brands with environmentally sustainable practices or values, making it a key purchase criterion.

The success of sustainable fashion brands and a shift towards circular business models shows that being good to the environment is not only a moral imperative but also a sound business strategy. The ethical online fashion market is set to continue its remarkable journey in 2025 and beyond, shaping the future of fashion.