Shifting Spending Habits Redefine the Fashion Landscape for 2026

Following a tumultuous 2025 for the fashion industry—spanning department store retail, off-price players and resale platforms—select luxury and athleisure brands clearly emerged as share winners, according to data from research firm Consumer Edge.

The consumer insights group released its 2026 Apparel, Accessories and Footwear Report this week, unveiling insights that could redefine 2026 merchandising bets. With spending behavior differing dramatically by demographic groups, Consumer Edge reveals this shift is fundamentally changing where consumers shop, how much they spend and which brands are positioned to win.

“What’s striking is that income alone is no longer a reliable predictor of apparel spending behavior,” said Michael Gunther, vice president and head of insights at Consumer Edge.

Within this shifting landscape, Consumer Edge’s analysis (of the top 40 fastest-growing apparel, department store, and luxury brands by direct-to-consumer sales in 2025) found Miu Miu, Quince, Alo Yoga, Depop and Longchamp ranked among the fastest-growing DTC players, gaining ground despite broader softness in apparel spending.

U.S. consumer spending in the category declined modestly in 2025 (through Nov. 30) and underperformed overall consumer spending, per the report. Despite the pullback, value-driven brands continued to gain share—what Consumer Edge said was a sign that income alone can no longer reliably predict how people shop.

“Even higher-income consumers are becoming more selective, shifting spend toward brands that offer a clear value proposition—whether that’s quality, pricing, relevance or brand affinity,” Gunther said. “As we enter 2026, brands with a clearly defined customer and brand message will have an advantage over those taking a broad, one-size-fits-all approach.”

While all income cohorts reduced retail spending over the past year, the highest earners—those making over $150,000 or more per year—have “held up the best” by reducing their spending the least.

“Wealthier shoppers are increasingly seeking to balance pragmatism and indulgence,” the report reads. “Despite their more secure financial position, many are gravitating toward quality essentials at more accessible price points—reflecting a growing appetite for ‘quiet luxury’ and smarter shopping strategies.”

That said, younger Gen Z shoppers—those aged 18 to 24—reduced spending less than any other age group, favoring brands such as Coach, Depop, Béis and Shein, according to the report. This reflects their demand for culturally relevant, trend-driven brands that balance affordability with aspiration. While older cohorts might ‘curate’ their purchases, Gen Z tends to “collect” experiences through these brands; what the report highlighted as a distinct approach to brand discovery.

“Coach gained share among 18-24-year-olds in the ‘Single-Brand Luxury’ category, aided by viral ‘hero’ products like the Pillow Tabby and price points in the $150–$300 range which have positioned the brand as an attainable entry into luxury,” per the report. “Beyond affordability, nostalgia for early 2000s styles and influencer-led campaigns have reinvigorated Coach’s cultural relevance, with its blend of trendy designs and heritage credibility making it a compelling alternative to higher-priced competitors.”

Looking specifically at the luggage/travel accessories category, Béis gained significant share among 18-24-year-olds’ spend, while Away and Tumi lost ground.

“Béis’ influencer-led marketing, TikTok virality and feature-rich product design that blends affordability with aspirational aesthetics has garnered it a loyal following among younger shoppers balancing budget and status signaling,” the report reads. Specific TikTok behaviors such as “duffel unboxing” and “packing hacks” have created a viral loop, drawing attention to the product’s practicality and style. “By contrast, Away and Tumi’s higher price tags and more traditional positioning appear less aligned with Gen-Z’s preference for accessible, Instagram-ready travel gear.”

On that note, peer-to-peer resale platform Depop, again, ranked in the top 20 as it “continues to capitalize on consumer enthusiasm for budget- and environmentally-friendly alternatives to costly new purchases and cheap but unsustainable fast fashion,” the report reads. “Depop’s trend-driven approach—complete with recommendations powered by AI, influencer collaborations and social media integration—has made it particularly popular with younger shoppers in the Gen-Z cohort.”

Urban Outfitters’ subscription-based rental service Nuuly, meanwhile, also ranked among the fastest growers, “benefiting from demand for variety and sustainability by offering access to premium brands without the commitment” of ownership—what Consumer Edge called “a model that clicks with consumers seeking both affordability and novelty.”

Consumer Edge also found that legacy luxury labels and footwear/athletic brands are struggling to regain momentum, as they are “challenged by shifting consumer priorities and growing competition from digitally native disruptors.”

“Premium contemporary brands Reformation, Revolve, Aritzia and Miu Miu lean toward younger, affluent consumers—possibly leaving them less exposed to income stress, but more vulnerable to changing fashion trends or shifts in attitudes toward aspirational spending,” Consumer Edge reported. Shifts in demographic behavior are also shaping brand outcomes, per the New York-based company. While the youngest shoppers remain the most engaged with trend-led and digital-first concepts, adults aged 25-34 and seniors—along with the high-income consumers—are “displaying more cautious spending patterns and a clearer focus on value, practicality and comfort,” Consumer Edge found.

Plus, the power of digital marketing and highly tailored brand positioning has “never been more evident,” the report reads, as brands that invest in influencer-driven campaigns, strategic partnerships and collaborations, as well as community engagement, are “reaping the rewards.”

“Performance continues to diverge across retail segments, with off-price department stores and secondhand marketplaces thriving while traditional luxury and athletic brands struggle,” the report concluded. “Value-driven consumer behavior continues to reshape spending patterns, with shoppers across all income levels increasingly seeking affordability amid economic uncertainty—whether through discounts, dupes or alternative ownership models like rental and resale.”