Brands are looking at 2025 with both enthusiasm and angst.  A new year usually brings with it a sense of optimism and a fresh start.  However even the most optimistic can’t ignore the writing on the wall.  Some of the boldest is increasingly fragile consumer sentiment, which more than the economy, is the key to whether retailers will see strong sales or weak sales.

A cautious consumer environment often leads to inventory management issues. If sales slow down unexpectedly, brands and retailers could face excess inventory, resulting in markdowns and potential write-offs that would affect profitability. 

There is a risk that department stores and other retail partners may reduce their orders or seek more favorable terms due to economic pressures.  This could add further pressure to brands and their suppliers.

Any pullback from these retail partners could hinder the brand’s growth plans. 

Another key issue is greater pressure on meeting regulations around traceability and transparency.  The long term view is that new technology – most likely driven by AI – will help provide the necessary data.  The problem is managing through the short term until those longer term solutions can be implemented.

Here are the seven top challenges – and how brands could successfully navigate them.