y the London-based AI marketing agency Seraphinne Vallora, was met with major public backlash, with many consumers complaining that the generated image set unrealistic beauty standards and took away opportunities from human models. More recently, in May, a story went viral about Rainbow Shops, a US fast-fashion retailer, allegedly using model Francheska Pujols’ image to create an AI replica of her likeness. In September 2024, Pujols entered into a contract with Rainbow to star in several ad campaigns. The agreement allegedly expired on March 15, 2025. In a lawsuit filed on May 22 in New York Supreme Court, Pujols and her lawyer argued that Rainbow’s more recent ads featuring the model’s digital doppelganger were created without her consent. They contended that the contract she had previously signed allowed Rainbow only to lightly tweak or make “stylistic alterations” to photos previously taken, not use her likeness to create entirely new images. Additionally, Pujols contended that the poses her doppelganger was placed in for the ads, including one in which she is wearing a denim mini skirt and a white top with her legs spread wide over a barstool, were “crude” and damaging to her reputation as a model. Rainbow has fiercely denied any wrongdoing, stating: “We used our images properly and there’s no violation of her rights.” The legality of retailers using AI-generated models On May 29, Pujols dropped the lawsuit, leaving it unclear whether she settled with the brand out of court or reached another form of resolution. The attention surrounding Pujols’ initial lawsuit reflects the modeling industry’s ongoing efforts to prevent incidents of this nature from taking place without models’ consent. For example, the model advocacy nonprofit Model Alliance has been championing the New York Fashion Workers Act, a state law that will take effect on June 19. The law will tighten consent requirements, giving models more power over content featuring them in the age of AI. Between this case and the recent buzz generated by Dua Lipa’s agenda-setting lawsuit against Samsung in May, it is clear that both the retail industry and consumers remain uncertain about what the use of AI-generated models should look like. As retail strategist Christine Russo, principal of the Retail Creative and Consulting Agency, pointed out, the industry is in a transitional phase as it works out how AI-generated models fit into advertising. “In some instances, the cart got before the horse. A recent example can be seen in how Rainbow allegedly used a model in images that the model claims were not shot,” Russo said. “The details are more than likely in the fine print. The model and Rainbow had a contract, and it’s possible there was language that included AI usage of her likeness. If not, the model’s case can stand on New York State’s ruling in the July 2025 New York Fashion Workers Act that requires consent for AI-generated images.” Meanwhile, Alison Taylor, a clinical associate professor at the NYU Stern School of Business and author of “Higher Ground: How Business Can Do the Right Thing in a Turbulent World”, places the incident within the broader context of the AI backlash and an increasingly visible focus on the human qualities AI cannot replace. “I am sure AI models will become standard practice for some retailers, and I think it will be an increasing differentiator if a retailer commits to not doing that,” Taylor said. “That said, modelling is an inherently exploitative profession anyway, and I think this complicates the discourse. It is not enough to commit to still having human models; you also need inclusive beauty standards and good working conditions.” Trust is the issue Despite the controversy surrounding the Rainbow case, Russo noted that the use of AI-generated models would become more normalized as brands and retailers push the boundaries of creative advertising. In turn, consumers will become more accustomed to seeing them. Building on Russo’s comments, Barney Stacher, CEO of consultancy firm Stacher & Stacher, said the debate over AI-generated models is not really about technology. It is about trust. “Retailers have always adopted new tools when they can reduce costs, increase speed or improve flexibility. AI-generated models offer all three,” Stacher asserted. “Brands can create content faster, test more creative variations, localise campaigns and avoid the costs and logistics associated with traditional photo shoots.” The question is whether consumers care. Right now, Stacher said, the answer is, it depends. “Most consumers are unlikely to object to AI-generated models if the imagery is clearly disclosed, aligns with the brand and doesn’t misrepresent reality. However, problems arise when brands cross the line from creation into imitation – particularly when consumers or creators believe a real person’s likeness, identity or work has been replicated without consent. “The Rainbow controversy highlights a broader concern emerging across retail and media,” he explained. While consumers are increasingly comfortable with AI as a tool, they remain sensitive to issues of authenticity, transparency and fairness. When AI appears to replace people without acknowledgement or compensation, public reaction tends to shift from curiosity to skepticism. “From a sales perspective, I don’t believe AI-generated models alone will significantly impact purchasing behavior in the near term. Most consumers buy products, not models. However, retailers that build their brands around authenticity, community, inclusivity or human connection may face reputational risks if AI usage appears inconsistent with those values.” In the long run, AI-generated models will almost certainly become a standard part of the retail content toolkit, as the economics are simply too compelling. The more likely future is not one in which AI replaces human models entirely, but rather a hybrid ecosystem where brands use both, depending on the objective. “Human models will continue to play a critical role in storytelling, emotional connection, influencer partnership and brand-building, while AI models will become increasingly common for routine product imagery, testing, localisation and lower-cost content production. “The retailers that succeed won’t be the ones that use the most AI. They’ll be the ones that use it in ways that consumers perceive as transparent, ethical and consistent with the brand promise,” Stacher concluded. Further reading: AI, transparency, upskilling: How Amazon is adapting for the future of e-commerce