The Tamesis
We hope these invisible AI improvements will increase sales—no more waiting a week for a product to come back in stock, or being treated like a stranger on bi-monthly store tours, so our promise comes true. While it has long been an accepted wisdom in the luxury retail world that advanced tech features have little place in brick-and-mortar stores—a point reinforced by the rise and fall of Web3 hype concepts like VR headsets—experts say things are different this time around because the technology is solving real retail pain points.
Those working on the cutting edge of experiential retail say AI is also enhancing what they call “empathetic” retail design, from store concepts where lights change color or music changes to the rhythm of a customer’s breathing, to poetry hand-written by AI delivered to customers in seconds based on their appearance and attire. In the AI era of luxury retail, a core focus on humanizing every experience is the common denominator.
“Customers now have high expectations of luxury retailers – they expect they already know a lot about them, their services, what they buy, what they might like,” said Andrew Hill, creative technology director at Random Studio. “But there will be less and less visible technology in the visual presentation of offline and online store environments. Artificial intelligence is the virtual, invisible layer underneath everything that makes the store a more magical and interesting place.”
digital twin
Brands are currently laying the groundwork behind the scenes to be able to deliver this AI-assisted hyper-personalization at scale. “One of the most interesting AI use cases we see in the luxury industry today is customer relationship management [CRM] Andrea Steiner, an associate partner at Bain & Company who focuses on luxury retail and fashion, said: “Our teams are building ‘digital twins’ of their customer base in a digital environment. Brands are uploading all the details they have, such as what customers have purchased in the past, how they interact with the brand’s website and how often they shop, and then segmenting their customer base to find patterns and personas. Unlike traditional static CRM, Personas vary, and AI enables brands to create dynamic virtual representations of individuals, simulating their behaviors and preferences in real time, and constantly updated with data from multiple sources – hence the term “digital twin”.
Critics say this new data feedback loop could have a dark side: Certain fast-fashion brands began making headlines last year amid speculation they were following the airline industry’s lead and experimenting with using artificial intelligence for dynamic pricing that responds to factors such as demand, inventory levels, scarcity and currency fluctuations. But historically, luxury brands have been hesitant to avoid volatile or transactional pricing.
