bsp; From using this tech to create futuristic artist campaign videos and imagery to setting customers up with the perfect virtual shopping assistant, AI is reshaping the way luxury retailers operate.  In a Coresight report, analyst Charlie Poon outlined five ways AI is being used in today’s luxury retail landscape, ranging from product design and innovation to combating fraud.  How AI is being used in the luxury retail landscape  Product design and innovation “Luxury houses are using GenAI to inspire new product designs and even co-create products, accelerating creativity that helps designers stay ahead of fast-moving trend,” said Poon. In October 2024, Moncler collaborated with digital artist Lulu Li to launch The Moncler x Lulu Li Project collection in China.  For the collection, Moncler utilized AI tools to co-create a unique collection of its iconic outerwear, blending futuristic, AI-generated concepts with the brand’s traditional craftsmanship. Leveraging GenAI, Moncler generated numerous unique patterns and shapes, which were used to create 10 fully realized garments for this launch.  Immersive marketing and AI-generated content A large part of marketing in the luxury sector centers on crafting a dream through rich visuals and compelling storytelling. Poon explained that GenAI has emerged as a powerful creative tool for luxury brand marketing, generating immersive digital experiences that were previously impractical or impossible to produce just a few years ago.  Additionally, from an efficiency standpoint, AI-generated content can significantly reduce production costs and lead times for campaigns. Where a traditional luxury shoot can be a logistical nightmare, flying models and photographers to exotic locations, an AI-powered campaign can be mocked up in just a few days. However, it should be noted that luxury retail players need to be especially cautious when crafting AI-driven campaigns to maintain the brand’s high-quality feel.  For example, French luxury brand Jacquemus has been wowing viewers over the past few years with fantastical video campaigns, such as those featuring a giant-sized handbag rolling through the streets of New York and Paris. Whereas brands like J.Crew and Guess have irritated viewers and potential customers with imagery that felt shoddy – misaligned sweater stripes, shoelaces that seemed to vanish or just too “fake”. Ultimately, the best results will come when AI is used as a creative partner, generating innovative ideas that an art director can validate into usable content.   “A human in the loop – an art director or marketing team – is necessary to curate and fine-tune the AI outputs,” said Poon.  Customer service with shopping agents This year, agentic AI really came into play in the retail scene, with one brand after another launching their own AI-powered shopping tool to assist customers with questions and styling suggestions.  This September, Ralph Lauren introduced Ask Ralph, a personalized shopping agent available to US users in the brand’s app. Built on Microsoft’s Azure OpenAI services, Ask Ralph lets shoppers ask styling questions and receive outfit and accessory suggestions curated from the brand’s merchandise.   Employee empowerment and operational efficiency Unlike other retail sectors, Poon pointed out that luxury retailers, especially, need to balance exclusivity with efficiency and ensure that AI serves as a tool to augment their human sales teams, not replace them. Case in point: luxury conglomerate LVMH has been cautious about deploying chatbots directly to consumers. Instead, the company uses AI behind the scenes to empower its sales representatives.  In early 2024, LVMH announced the launch of its AI-powered clienteling platform MIA, a conversational assistant that helps sales representatives provide quick, tailored responses, such as tracking exclusive items. The AI system handles more than 1.5 million monthly queries from its employees, showing great potential for other luxury retailers to follow LVMH’s lead.  AI-enabled authenticity to fight counterfeiting One area where AI has been especially crucial in luxury retail is the fight against counterfeit products.  “Counterfeiting is the perennial challenge for luxury retail,” said Poon. “The very qualities that make luxury products desirable – limited availability at premium prices – also make them targets for counterfeiters. “By leveraging machine learning and computer vision, luxury brands and resale platforms can detect counterfeit goods, verify the authenticity of products and flag suspicious transactions or online activity.”  One company that has drawn attention in this high-powered retail sector is the AI-powered luxury authenticator Entrupy, which has developed portable devices and accompanying software that can verify whether a luxury item, such as a handbag, is genuine or fake within seconds.  Entrupy’s process involves taking high-resolution, microscopic images of specific parts of the product – such as the leather grain, stitching, logo embossing or hardware – using a special scanner or a smartphone attachment.  The images are then analyzed by a trained AI model that compares patterns against a vast database of known authentic and known-fake examples.  According to the company, Entrupy can authenticate luxury brands like Hermès, Louis Vuitton and Chanel with 99.1 per cent accuracy and has authenticated over US$7 billion worth of luxury products using a database of over 50 million reference images. AI’s future in luxury retail  Whether you like it or not, AI is reshaping the way luxury retailers operate, and those that don’t keep up will be shipped out.  “By embracing these technologies, luxury houses not only improve efficiency and profitability but also create more personalized, immersive experiences for their customers,” concluded Poon. “The future of luxury retail will likely be defined by brands that can integrate AI seamlessly into their creative and operational processes.” Further reading: Why Walmart’s partnership with OpenAI is a retail game-changer