GENERATIVE AI IN LUXURY. QUANTUM SHIFT, OR REALLY USEFUL TOOL?

An AI test produced by SUM as part of an ongoing project that explores the relationship between artificial intelligence and luxury fashion.

Since the launch of Chat-GPT, the use of AI and the news coverage about it, have spread like wildfire. 

Among students at schools and universities it has taken on such incredible momentum as to have already become a totally unstoppable force, and has left educators across the globe grappling with their new reality.

We are also witnessing an intense race among Microsoft, Google, IBM to launch generative AI tools, with billions being spent by each. As time passes machine-learning will ensure that AI will only get better and better at the things it does. 

So in some circles it might seem heretical to even dare to consider the possibility that it may not end up entirely dominating every aspect of our future lives.

In terms of a timeline we’re essentially at the start, and AI’s peak usefulness is yet to come. As in the case of autonomous driving, the question is when that peak will arrive and how our industry will look once it does so?

McKinsey suggest that AI has the potential to help fashion businesses become more productive, to get to market faster, and to serve customers better. They also propose some use cases, including Merchandising and product, Marketing, Supply chain and logistics, Digital commerce and consumer experience, Store operations, and Organisation and support functions.

Beyond the theoretical potential of generative AI, some brands are already employing it in consumer-facing branded activities. For example, in Kering’s experimental KNXT platform, and in the Zegna X configurator - which the Italian luxury fashion house created in collaboration with Microsoft. Each is a customisation tool that is personalised for each shopper. In the case of the KNXT platform, users meet Madeline, a ChatGPT-based luxury personal shopper who helps make recommendations based on detailed context from each user. 

So, will AI end up acting as a tool for the creation of a series of tactical newsworthy activities and some radical design approaches, or will it lie at the centre of a massive strategic shift in the luxury industry that radically affects the way we work?

BoF suggests that the current fears of designers and creators are akin to those expressed by painters at the advent of photography in the early 20th century. They come to the conclusion that AI can become an incredible tool for designers but will not make them reduntant any more than photography did to professional artists. They go as far as to suggest that AI might even result in a backlash that sees a reversion to authentic human craft skills. 

This is really where the tension lies. If you were to take a peak at the strategy of any serious luxury brand you’d almost certainly see the term ‘Authentic’ somewhere in its positioning, values, or tonality. Scratch the surface a little more and a sense of human talent, human tradition, and human craft skills would inevitably emerge as the substance underpinning that authenticity.

In this context we should look at the future of luxury brands not only in terms of what AI is capable of doing, but from a consumer perspective. 

For example, would a customer want to buy a piece of fine jewellery that is the product of craftspeople situated in a certain part of the globe whose artisans have been using skills honed over generations? Or would they prefer to buy a similar design that’s been created by generative AI? If it’s genuine fine jewellery that they’re after, then they’ll no doubt buy the piece that’s the product of human craft. 

In a similar vein, would visitors to a luxury brand’s website want to read the carefully-worded texts of a skilled copywriter who is an expert in the luxury space. Or will people be just as happy to read a text written by AI? Interestingly, we asked Chat GPT to tell us if there are any noticeable differences between a text that it might prepare, compared to one that a human might write, and it identified the following characteristics of itself: repetitive phrasing, overuse of uncommon words, lack of coherence, template-like responses, errors in facts or logic, and lack of emotional understanding. Would you really want your luxury brand to be publishing articles with any of these faults baked-in to the text? AI’s quality will of course improve over time, but this is where we are at the moment with its writing skills.

In each case it is the human aspect of luxury that produces its true value. It’s the reason why a brand can attach super-premium price tags to its high-end products. Once a consumer suspects that her product or its communications were in fact created by AI, then the brand is likely to see its perceived value decline overnight.

There will of course be important exceptions to this general rule, with some new 

luxury brands being created and marketed from the outset as being solely the product of AI. This does not mean that they will disrupt the entire industry; it just means that they are likely to attract the interest of a niche audience of some tech-savvy digital natives who warm to the idea of their clothing and accessories having been designed by robots.

One could contend that if a piece of fine jewellery was to be value-engineered through the use of AI, then it could be sold at a much cheaper price. While that could certainly be done, the piece would then no longer be seen by the customer as ‘fine’ jewellery. It would no longer represent true luxury. It would, at best, become ‘accessible luxury’.

As with so many aspects of the sector, the subject is not clear-cut.

Creators will of course start to use generative AI as a form of brainstorming tool, and retailers will increasingly use it to enhance their sales process by offering in-depth personalised solutions. But these are tactics that float around the edges of each luxury brand. They are not its strategic beating heart.

Some might view this as a head-in-the-sand mentality, and mention that so many failed companies ended up losing their relevance by choosing to ignore massive changes that lay just around the corner. We would say that while AI will indeed lead to significant transformations in some industries, here we are talking single-mindedly about luxury, and luxury has its own rules.

Kodak’s business was decimated by digital photography because people could see a better and easier way to take their snaps and did not have an emotional attachment to 35mm film. Blockbuster’s business was destroyed by online video because people could see a better and easier way to have a movie-night at home. The same is not the case for genuine luxury because the consumer knowingly pays a premium for human talent and effort and is not motivated to hear how easily her brand’s garment was to make or to market, nor even how much cheaper it is now. Quite the reverse.

In this context, while AI can be a great co-collaboration tool for luxury brands, it is unlikely to become a replacement to the strategies that lie at the core of luxury’s production and marketing process.

Big changes do of course lie ahead, with generative AI being used as a tool to add new tactical value across a number of functional aspects of the industry, especially as it ‘machine learns’, but these developments are unlikely to lead to a strategic upheaval in the space. Instead, if used sensitively, AI will be able to enhance the existing strategies of the brands we already know and love.