How luxury brands are embracing AI to enhance customer experiences

The luxury sector has invested over $360m in AI in the past three years.

Artificial Intelligence (AI) is sparking a new era of innovation across industries, with luxury goods companies ramping up efforts to integrate AI capabilities into their offerings, according to GlobalData.

“Even the luxury goods industry, which thrives on personal touch, is preparing to capitalise on AI,” the report said.

The luxury sector has significantly boosted investments in AI, surpassing $360m over the past three years, a notable 79% increase compared to previous periods, as per GlobalData’s Technology Foresights platform, 

Sourabh Nyalkalkar, practice head of Innovation Products at GlobalData, highlighted the industry's focus on personalisation: “These innovations, such as AI-powered cosmetics recommendation systems and body measurement tools, aim to enhance the personal touch in their offerings.”

“Cosmetics recommendation systems are designed to consider various user features, both biological and non-biological, to suggest the best products,” he added. “Meanwhile, AI-based body measurement tools determine a user’s body type in the least intrusive manner to ensure the best product fit.”

For instance, Chanel is pioneering a makeup recommendation system that analyses user-selected images to suggest the best matching products. Similarly, Sephora, under LVMH Group, is developing a skin analysis system that evaluates skin tone and features to recommend suitable cosmetics.

Moreover, Estée Lauder also recently invested in Kiki World, a US-based firm utilising Web3 technologies for co-creating personalised products with consumers. 

Recently, Cartier has also teamed up with Snap to introduce AI and AR technologies, allowing customers to virtually try on jewelry before purchase.

“This development underscores the significance of AI and other technologies in transforming the luxury industry,” said Nyalkalkar. 

“Additionally, the growing startup ecosystem, particularly in Asian countries, is focusing on smart and digital approaches to fashion, which the luxury goods industry should start embracing,” he continued.