Young consumers are driving growth as brands turn to AI amid tariff pressure

Despite higher prices due to tariffs and broader economic pressures, several consumer brands say younger consumers are helping drive growth in key product categories — including diapers, glasses and handbags — while artificial intelligence quietly increases efficiency and profitability.At the Reuters NEXT conference in New York on Thursday, senior executives from companies including Warby Parker, Tapestry and The Honest Company outlined how changing consumer behavior and new technology are shaping the retail landscape as 2026 approaches.

Neil Blumenthal, co-CEO of Warby Parker, said he expects the eyewear retailer to end 2025 “more profitable than expected,” crediting both operational improvements and AI’s role in helping ophthalmologists maximize patient time by reducing administrative work. He also noted that the company is “aggressively hiring” for its U.S. stores, especially optometrists, as it prepares for steady demand.

For Tapestry, the parent company behind Coach and Kate Spade, the outlook was surprisingly broad. CEO Joanne Crevoiserat said the Coach brand is seeing momentum “across all income segments,” with China’s middle class contributing significantly to the growth. She highlighted the spending habits of younger American consumers, who continue to shop even though they feel priced out of key milestones.

“Young consumers may be postponing life moments like getting married or buying a home, which they see as out of reach, but they’re still participating,” Crevoiserat said, adding that one of Kate Spade’s handbags is gaining popularity among younger demographics. She also said that Tapestry is preparing to hire employees who will be introduced to artificial intelligence – Generation Alpha – as they enter the workforce.

The Honest Company is also navigating a landscape characterized by rate pressure. CEO Carla Vernón said that in response to the Trump administration’s tariff policies, the company now has a specialized team of “tariff tacklers” focused on maintaining growth without leaning on steep price increases. While some consumers have moved to smaller sizes of higher-priced diapers, wipes and hair products, Vernón emphasized that they are “not buying fewer units.” Yet the resilience of younger shoppers – combined with the rapid adoption of AI tools – has given consumer brands a clearer path forward, even in a challenging economic cycle.

(Disclaimer: This article comes from Reuters)