Artificial Intelligence: priorities, myths, and realities in the Luxury industry

In January 2024, the Luxury Institute published an analysis on the priorities, myths, and realities of artificial intelligence in luxury goods and services. This study aims to assist luxury business decision-makers in implementing AI in their activities.


In January 2024, the Luxury Institute released a White paper  on the theme of artificial intelligence (AI) to help decision-makers in luxury understand this new technology. Their conclusion: “AI is here to stay. So how can it be used to continue to deliver the best goods and services possible?”. Luxury players must discern what is ephemeral, the “hype”, from what is pragmatically viable for their companies’ development. True to its motto “the expertise of emotional intelligence in luxury”, the Institute invites luxury Houses to not neglect the human and quality in favor of all-technological.


Following a survey conducted with 22 eminent members of the Global Luxury Expert Network (GLEN), the Luxury Institute gathered opinions and myths that decision-makers will face when implementing AI in their activities. Luxury companies have always waited for the right moment to adopt innovations, such as Ecommerce and algorithmic advertising. Experts now encourage them to stop considering AI as a novelty and to embrace it for concrete use cases by testing the tools in their activities.


AI in 4 Key Areas


Business intelligence: companies have large amounts of data that can be analyzed by AI to detect trends in customer behavior and predict future developments. The goal is to generate actionable insights for informed decision-making and marketing strategy adjustments.

Customer experience: AI will detect unidentified needs through user behavior. Luxury Houses will thus have a head start over their competitors in seizing innovation to provide a targeted response to customer expectations. The experience will become increasingly personalized, enhancing satisfaction and therefore customer loyalty.

Operational efficiency: many repetitive tasks requiring little creativity can be delegated to AI. It can also suggest improvements to internal processes and resource allocation. Artificial intelligence is also an excellent tool for controlling counterfeiting and authenticating products.

Sustainable development: although AI can help companies optimize their energy consumption, its own operating energy cost must be considered in sustainability strategies.


Myths Surrounding AI


AI is not a guarantee of success. The Luxury Institute reminds luxury players that the success of their business depends on multiple factors, of which technical implementations are only one aspect. Small and medium-sized structures are most vulnerable given their limited resources and sparse data samples, limiting AI’s effectiveness.


Algorithms cannot replace humans in ethical and legal decision-making. The resources used to train AI machines come from various sources, themselves more or less moral and legal. Errors in these areas would be irrecoverable for luxury brands that must control every step of their production and distribution in pursuit of excellence.


The implementation of AI will not be smooth or continuous. Given its frequent rate of “hallucinations”, it is necessary to verify the data it is based on and its proper functioning. ChatGPT itself, provides different answers over time for the same “prompt” (question asked by the user). It may have given a correct response a month ago, and be completely wrong today.


Personalization is not completely achieved with AI. The quality largely depends on the data collected; an error would result in a non-conforming final product. Human intervention is necessary. The Institute also warns about the protection and security of customer data.


AI does not replace human creativity. It is just a tool for artists who alone possess emotional intelligence and consciousness. Unless decision-making is delegated to algorithms, an original prompt is necessary to initiate a creative process using text, image, video, or even metaverse generation tools.


AI analyses are not always accurate as they are trained on data that is not always correct or even up-to-date. Luxury brands target a narrow clientele whose emotions and individuality cannot be reduced to a broad approximation. It is only through relational understanding that the true position of the client can be comprehended.


The public is not yet ready for experiences entirely driven by AI. The strength of luxury lies in optimal interaction with its clientele, generating brand trust.


Tomorrow’s world will undoubtedly recognize human customer service as a luxury, while mass consumption experiences will become increasingly automated and virtual. AI promises to help luxury companies boost their performance and efficiency but this transition requires “extraordinary agility” for them to maintain their status as reference and trustworthy brands. For the future of the luxury industry, the Luxury Institute bets on human creativity, lasting trust relationships, and emotional intelligence.



Featured photo : Generated by AI ©DALL·E (prompt used: illustration of the integration of AI to enhance the customer experience in the luxury field)

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The editorial team
Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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