The Best of BoF 2023: A New Consumer Economy

In the face of relentless inflation, sky-high interest rates, and ever-gloomy consumer sentiment, a clear picture of what’s working in retail — and what isn’t — emerged in 2023.

The winners? Active and outdoor brands such as Alo Yoga and Salomon-owner Amer Sports, benefitting from millions who adopted a more health-conscious lifestyle after the pandemic; e-commerce players agile enough to pivot to wholesale and retail as shoppers returned to stores; and the savvy retailers who have successfully conveyed a sense of value to the cash-strapped consumer. All the while, luxury has stalled immensely as the so-called aspirational shoppers ran out of disposable savings. Well-capitalised direct-to-consumer companies reckoned with a broken business model that favoured growth over profit — the consequences of which have finally caught up.

Unfortunately, dismal market conditions are here to stay. While economists doubt the likelihood of a recession in 2024, discretionary spending will continue to be challenged as we enter the new year.

Even so, the consumer has proven to be resilient time after time. Despite unfavourable circumstances, brands and retailers will shine when they show their best side: convenience, service, and a differentiated product.

Top Stories

Where US Consumers Are Shopping and What They’re Buying: Luxury spending may be flagging, and Miami has lost some of its pandemic-era heat. But there are plenty of opportunities for fashion brands if they know where to look.

Pedestrians on a busy retail corridor. — American consumers are still spending. Retail sales rose 0.2 percent in June and 1.5 percent from a year earlier, marking the third straight month of growth. (Shutterstock)

What Parade’s Sale Says About the State of DTC: The Gen-Z intimates brand’s sale to a little-known strategic is the latest in an ongoing series of less-than-desirable exits for unprofitable digitally-native start-ups.

Parade’s playful and inclusive sex appeal made it feel like Gen-Z's answer to Victoria's Secret, making its exit to an obscure licensing firm all the more shocking. (Parade)

Farfetch Found Its White Knight. What’s Next?: The South Korean e-commerce firm Coupang has saved Farfetch from potential bankruptcy, and could use its logistical and marketing might to solve some of the luxury e-tailer’s seemingly intractable problems. But “everything stores” have a spotty track record when it comes to high-end retail.

Farfetch reports disappointing sales and lowers its outlook for the full year by $500 million. (Shutterstock/Shutterstock)

Hyper Growth Is Over for Sneakers. What’s Next?: As incumbents like Adidas and Nike grapple with a cooling market, niche players and newcomers have an opportunity to flourish.

Nike, sneakers, sneakerheads, shoes, footwear — Nike’s inventory pile-up totalled $9.3 billion in the quarter ending Nov. 30. (Getty Images)

Why Some Brands Are Thriving in a Tough Economy – and Others Aren’t: BoF analysis of dozens of publicly traded fashion and beauty retailers’ latest earnings shows companies that can make the most compelling case for value have been the most successful.

Shoppers queue outside Selfridges ahead of the Boxing Day sales on December 26, 2015 in London, England. (Getty Images/Getty Images)

How Uniqlo Finally Won Over Gen-Z: Its viral cross-body bag and other TikTok favourites have helped the brand catch the attention of younger consumers. Now, the retailer wants to open more stores in the US and Europe.