Leveraging AI For Luxury
How artificial intelligence can empower luxury brands and retailers to transform fashion’s infrastructure.
One can be forgiven for not grasping the full potential of artificial intelligence (AI) as, too often, it is the sensationalist, gimmick-driven aspects which receive airtime. Yet its popularity is growing: Juniper Research estimates global spend on the sector will reach USD$7.3 billion by 2022, up 265 percent from 2018. And there are largely untapped aspects of AI that, if leveraged correctly, are highly likely to impact a brand or retailer’s success, as was explored at Sotheby’s Hong Kong and Jing Daily’s recent conference, The Future of Luxury: E-commerce in Asia.
Ahmad Qamar, director of machine learning at Sotheby's, raised some interesting points with regards to its most applicable forms: machine learning and big data analytics. “Within the last decade, AI algorithms have evolved that are proficient at finding patterns in unstructured data such as text, images and speech,” says Qamar. “Consumers nowadays create excessive amounts of content online, so there’s a lot of behavioural data which can be collected.”
Daniel Langer, chief executive of brand development and strategy firm Équité who also spoke at the event, warned that AI on its own is futile, believing it only becomes a game changer when used as a tool to decode information and make actionable insights: “It’s about creating an infrastructure that enables a brand or retailer to monitor data in real time, and from this information make better decisions on how to generate engagement, boost sales and increase returning customers,” he explains.
The ability to tap into the minds of consumers and observe their digital footprint is especially important for the luxury sector, where curated product offerings and personalised services are in high demand. According to Qamar, “in the luxury space, in particular, AI enables a seamless and low touch experience: with little input from the customer, brands and retailers can provide a personalised service that can leave consumers thinking they really understand them and their needs.”
Chatbots and digital assistants are currently one of the most favoured examples of AI implementation for luxury brands online, as they can help manage and optimise the customer service experience at scale. But other than addressing logistical queries including order status updates, product comparisons and stock availability, the technology is often able to instantly record valuable customer information and behavioural patterns, which can be leveraged to customise other aspects of the online shopping experience.
“AI enables a seamless and low touch experience: with little input from the customer brands and retailers can provide a personalised service”
Many brands are even modifying their chatbots to cater to consumers’ specific needs: Louis Vuitton’s version of the technology can suggest personalised items from their online catalogue and help with product care instructions, while Dior has integrated Natural Language Processing (NLP) to deliver a more humanised chatbot dialogue - complete with emojis and GIFs.
Visual search is another AI-powered tactic that luxury retailers are increasingly investing in, allowing shoppers to search for products they admire by uploading snapped images of similar items. In 2014, American department store Neiman Marcus teamed up with technology firm Slyce to launch ‘Snap. Find. Shop.’, a mobile app enabling customers to find and purchase products from the store’s online inventory using their own photos.
Similarly, online marketplace Farfetch introduced visual search functionalities to its mobile app in 2018 with the same capabilities. For both retailers, the goal of integrating image recognition technology was to incite discovery and engagement and provide a real connection between the online and offline world – all while collating important information on customer preferences, tastes, and behavioural trends.
Yet aside from tailoring offerings and services to enhance the consumer experience, leveraging AI-processed data can help brands and retailers improve their marketing strategies. As Langer points out: “If companies are not using AI effectively, then they are advertising and spending budgets blindly.” He adds that the technology can inform their decisions to “spend wisely based on solid numbers,” and thus “receive a better return on investment.”
While it’s impossible to predict the size of the role AI will play in fashion going forward, there is real scope for brands and retailers to differentiate themselves by integrating the technology across various stages of the consumer journey. Considering the extent of AI applications today, Langer for one thinks it has a really transformative power for all businesses: “If brands don’t constantly know what’s on a consumer’s mind, they are missing out on significant opportunities.”