The CMO Brief: What's Driving Results in Fashion and Beauty Marketing

Fashion and beauty industries face rising customer acquisition costs, saturated attention channels, and diminished consumer appetite for discretionary spending amid economic turbulence. Consumers are increasingly price-sensitive and less willing to spend on nonessentials. Longstanding above-inflation price increases have eroded consumer trust, prompting Gen-Z to change spending habits. Performance marketing effectiveness has fallen, and many Gen-Z feel overwhelmed by brand exposure. Data privacy regulations constrain targeting and elevate the need for alternative engagement methods. Brands must invest more in communicating value propositions, rebuilding trust, and adopting advanced analytics and AI to improve marketing effectiveness and customer engagement.

In 2025, both industries face a number of challenges - from increasing customer acquisition costs to competing for attention across saturated channels. Although inflation has waned, consumers have a diminished appetite for discretionary spending amid today's turbulent global economy. This market reality requires brands to make additional investments to communicate their value proposition and to encourage consumers to part with their money - a pressure largely shouldered by marketing teams.

Meanwhile, consumer trust is under threat amid price hikes. Over the past 50 years, US brands have historically raised prices by 5 to 7 percent annually, more than twice the rate of inflation, according to Bernstein research. As a result, 73 percent of US Gen-Z consumers report changing spending habits because of increased prices, according to The Business of Fashion's The State of Fashion 2025 report, published in partnership with McKinsey & Company.

Communicating brand trustworthiness is increasingly complex. The effectiveness of performance marketing has dwindled, making it difficult for brand communications to cut through - 80 percent of Gen-Z globally report feeling overwhelmed by their exposure to brands, according to The State of Fashion 2025 report. The introduction of data privacy regulations, meanwhile, restricts customer targeting, meaning fashion marketers need to find new ways to engage shoppers.

Read at The Business of Fashion