How Artificial Intelligence is Changing the Luxury Industry


Personalization and Artificial Intelligence might seem disconnected, but in the world of digital marketing these aspects are connected with each other.

The luxury e-commerce industry is thriving on personalization and patterns its modern methods of marketing on the tenets of making consumers feel a direct connection. Traditional luxury marketers thrived on exclusivity, and while brands like Louis Vuitton and Chanel still make use of exclusive campaigns and words on their marketing spiel, the way they create and customize products are different. Luxury marketers are now using Artificial intelligence and improved data from customers to create personalized and specific content.

For example, Louis Vuitton is now including Asian millennial's in their creative marketing strategies. The shoe and shirt designs, as well as the bags that they are producing, reflect the current taste of millennial. Luxury marketing transformed and reshaped itself so it can gain an easier entry to the e-commerce economy. The products are becoming personalized, customers of Louis Vuitton can add their designs on the new bags. This is because the taste of affluent or elite clients has changed. Every e-commerce portal whether it be a luxury brand or not, has the duty of making everything simple and easy to understand. E-commerce sites must be updated, and should contain vital information that consumers need.

The modern luxury consumer, wants everything to be seamless. Easy to understand and use. Luxury consumers want authentic type of marketing, and prefer content that is up to date. This means that to keep up luxury marketers must always be on their feet, active and ready to engage as well as match the online and offline experience of the client. Luxury brands like Chanel, Gucci, Prada, Louis Vuitton and Alta Gift Basket is making sure that their websites and e-commerce portals are clear, concise, easy to grasp and navigate. The online world is unforgiving to brands that do not want to make everything easy to access.

Luxury brands now understand that their flawless stores need to be replicated online. This means not only for the creative designs, but making sure that their e-commerce sites are easy to use. It should be immersive due to the generational shift, and because of this a lot of high end brands are already working together with connective technologies like Artificial Intelligence. It also means massive and wider presence online, including websites that have better Search Engine rankings. This is why the prices of Search engine marketing continue to surge over the years.

Big Data and AI

Artificial intelligence on the other hand collects data from a number of places, and applies self improving analysis of the information collected. By 2020 more companies will rely on the data interpretation of artificial intelligence and the value of this business will reach up to 3.9 trillion dollars. We have a wealth of information that is available online, luxury brands know this and are now using the online behavioral habits of consumers to change the way they craft their products. For example, platforms like Netflix tend to study the viewing habits of people and tend to suggest movies based on the common genre that a person views on the platform. This will also be implemented by luxury brands, if there is a surge in the number of millennial's who are in love with 80's or retro inspired products, you can be sure that the products being featured will change. Artificial intelligence is now immensely useful for marketers in understanding client profile, customer interactions, context, behavior, location changes and more. By using artificial intelligence luxury brands are now able to adapt with the changing times, tailoring its online promotions so it can reflect the views and values of customers. Luxury brands are evolving together with their consumers.

To protect the privacy and rights of luxury clients, they are offering an opt-in method. Most luxury brands are now offering a disclosure on how the personal data of the client will be used. Luxury brands who respect the rights and privacy of their clients are sure to win them over in the long run.
After all, in the world of digital marketing, authenticity and transparency is valuable.

Four key innovations are now being set in place with the help of Artificial intelligence. The chat bots, machine learning, Voice recognition and image recognition. Current chat-bots are not yet as intricate or complex to converse with humans, but they are now being designed in such a way that they would be able to engage in effective conversation online. Chat-bots are often used by luxury brands who want to have a ready chat support system anytime of the day. Basic chat bots can now process order status updates, do product comparisons, check product availability within seconds and they are highly beneficial on luxury e-commerce sites.

Luxury brands like Tommy Hilfiger, Dior, Louis Vuitton, Burberry and Estée Lauder now have their own chatbots. For example, the LV digital assistant is integrated with AI technology. The AI is trained to provide sophisticated and personalized response to cater to the 23 million followers of the LV Facebook page. LV makes use of what they call as the Natural Language Processing or NLP into their chatbot, it is now able to resemble natural language of humans. Brands like Dior even use chatbots that can use emojis, and GIFs to make the consumers feel as though they are talking with real humans.

Young fashion shoppers demand personalization, this is why luxury brands like Tommy Hilfiger partnered up with IBM to come up with tools that will allow them to customize their online products for users. IBM has teamed up with Tommy Hilfiger and The Fashion Institute of Technology (FIT) Infor Design and Tech Lab on a project called Reimagine Retail or Wearable Tech. Tools were used and applied to 15,000 of Tommy Hilfiger’s product images, and 600,000 of the runway images were made public including 100,000 patterns on fabric sites.

The use of artificial intelligence is also to speed up the delivery of the products, and to enhance the creative process. AI makes use of natural language understanding, makes use of computer vision and is able to help hasten the initial design process of products. It is able to predict which products will become more in demand. By allowing consumers to customize the designs on their own, the AI machines are able to predict the trends and what will be marketable in the coming days.

Another Artificial intelligence system that luxury brands are using now is Machine Learning. This is when humans feed essential information to machines so it will learn on its own. Some of the early experiments conducted with machine learning is by training AI robots to play chess. The AI machine robots became so good at it, and was able to analyze different scenarios and strategies on how to win the game. The same thing was applied with machine robots for hospitals. Machines are now trained to learn complex medical procedures, and trained to diagnose diseases, and they are in fact able to out perform doctors today.

Machine learning is highly personalized and is now able to asses the needs of individual shoppers when it comes to luxury e-commerce sites. Cosmetic luxury brands as a result can already tailor fit the online advertisements they release. The social media preferences of clients are determined, and now tailored by AI. Another powerful AI technology that Luxury brands rely upon nowadays is Image Recognition. This tool can already process thousands of human photos in one go. Because of this complex AI tool, elite clients of luxury brands can now try some of the products online through AI-facial recognition.

Affluent or well-to-do consumers can allow images of their face to be captured, and the website will offer a customized product that will match their facial features. One of the biggest luxury brands to make use of this tool is Sephora. They called this the Visual Artist, wherein the consumer can upload their photo and try the make up online to see how they would look like using particular shade or color. Some luxury brands even include online games on their websites like fashion and dress-up games where clients can play around to check and see how these products will look on a certain model.

Luxury furniture stores are becoming intelligent and creative in presenting their marketing. Online games and mobile apps are infused with these interesting architecture games that make use of actual products and furniture designs. After playing, the gamer can check out the real products in their online stores.

To make it even more interesting, luxury brands are already integrating Visual search technology. This allows buyers to use AI to search for products that they have seen. For example, they want to find the exact same bag that Beyonce wore, or Kim Kardashian wore on a certain shoot, They can simply upload the image and the AI will locate it for them. These tools make every day shopping online really convenient. It will save the buyer time, and remove frustration improving the client experience. Some companies are also partnering up with top influencer companies in the world like Sothyal.com. The growing influence of online celebrities has created a new kind of market. Luxury brands understand that the attention span of clients is limited and therefore they need to find ways to cut the time of processing products.

Voice Recognition on the other hand, is still getting tested. Soon we can do voice searches. By 2020 they predict that more people would prefer using their voice as a form of command instead of typing. Modern consumers are likely going to want conversational artificial intelligence that allows them to interact with luxury brands in a much convenient and highly personalized way. One of the brands who are looking into this is Starbucks. Starbucks has incorporated the My Starbucks Barista on their mobile app feature, so that their clients could simply place their order using a voice command.

AI Integration in Online and Offline Marketing

Robots will be integrated in online and offline marketing of luxury brands. In 2020 more assistant robots would be unveiled by major luxury brands and integrated in shopping stores. Retail shopping assistants would come in the form of robots. The use of Holograms for shopping will also be a huge thing in any retail industry. There will be holographic representation of the goods on the shelves, and the holograms can be customized so that clients can create changes and replace materials. Traditional stores only make use of store mannequins, but this will also change with the introduction of Holograms. In the near future, it will be possible to change the design of the window stores as one passes by.

The way affluent consumers shop will change in a radical way. Luxury department stores will make use of AR to offer customers more options. It will include digitally enhanced changing rooms, where mirrored display will show videos and inspirational content that consumers can see. Instead of relying on a shop assistant to tell you whether you look great, a robot can assess it for you instead. The use of VR for direct sales opportunities will increase globally. Luxury brands will rely on AI to lure more shoppers in their stores through a range of virtual reality simulations. In China, the social media app WeChat, is already offering their followers additional perks and privileges like being able to check parking spots and pay for parking using the app. The social media applications are integrated with department stores, and already offer exclusive membership programs.

The main goal is to keep the consumers enticed, to stay ahead of the curve. It will also mean the adaptation of luxury brands in emerging countries like China, Philippines, Thailand and Malaysia. We will see more luxury brands like Alexander McQueen, Alaia, Phillip Lim, Balenciaga, Bottega Veneta, Burberry, Cartier, Chloe, Self Portrait and Lacoste adapt AI technology.