Keeping it Real: AI Integration in Luxury
As we all know, art and luxury are not associated with cutting-edge technology. They are known by eminence and emotional involvement with consumers. A stay at an Aman isn’t an invitation to be treated like a generic customer prototype (unless, of course, requested). Similarly, today’s art collectors seek connection with individual artwork and the artists’ personal story. These subjective, emotional encounters – however temporary – are what elevates art and luxury from mere expense.
Artificial intelligence is no longer a dystopian point of differentiation for businesses but has swiftly become the baseline. However, the intrinsic rarity that accompanies a luxury experience and owning original artwork conflict with democracy and accessibility, the founding principles of the internet. Herein lies a prominent challenge for businesses: harmonising automation with what makes luxury, luxury.
This article discusses why the creative world needs a human-first, tech-second approach to adopting AI. The essence of art and luxury hinges on emotional resonance and providing value beyond practicality. So, while the following considerations focus on luxury, they hold relevance for the art market as well.
Illustration from Gucci SS18 Campaign (2018) by Ignasio Monreal. Photo Courtesy: Ignasio Monreal.
Early Approaches of AI Integration
Luxury brands have been dipping their toes into AI, embedding predictive models and personalization platforms into the consumer journey at scale. Consider Neiman Marcus Group (NMG). NMG acquired the digital styling chatbot “Stylze” and developed a proprietary app tool, NM Connect, for personalised shopping experiences. The company also announced plans to spend $500 million on digital technology by 2025, aimed at combining technology with human expertise. [1]. Personalization is becoming the expectation for both retail and e-commerce experiences, an evolution NMG is staying on top of.
Meanwhile, Burberry uses AI to provide customers a virtual try-on experience before purchasing items. But Burberry is also exploring another avenue of automation: AI image-recognition technology to identify counterfeit products. [2].
Breitling, Swiss watch brand beloved among aviation aficionados, has become an exemplary model of NFT integration in physical goods. All Breitling watches are now equipped with a blockchain digital passport, ensuring full traceability and forging a new dimension of digital scarcity. Collaborating with Arianee, a leading track-and-trace blockchain and web3 consumer engagement platform, Breitling effectively eliminated the need for collectors to keep physical proof of authenticity.
Breitling, Watch Digital Passport. Photo Courtesy: Breitling.
LVMH has also jumped on the blockchain bandwagon by launching a block-based authentication system known as Aura. This move underscores a growing trend in the sector to hit two birds with one stone: improve product authentication, and improve consumer satisfaction by establishing ownership securely within the digital realm.
Let’s not forget about luxury’s next-door neighbour, the art market. Both face the same challenge of preserving human creativity amid digitalization. Some galleries are reluctant to integrate AI into curatorial work, while other players in the industry are more welcoming. Christie’s, for example, uses AI for extracting data and cataloguing preparation. The result is a better understanding of collector behaviour and preferences, a big step toward the promised land of brand loyalty. Art market platforms such as Sang.art streamline the process of art acquisition. Like Breitling, Sang.art is driven by transparency and improving the consumer experience. Founder Sang Tanzer says, “I want to democratise and bring transparency to the art market, because 99% of art lovers have no knowledge about the reasons to buy art as an investment.” [3].
Sebastian Errazuriz, Rendering of MAZE: Journey Through the Algorithmic Self (2023). Photo Courtesy: Artsy.
Thankfully, consumer responses to early bets on AI are positive. According to Vogue Business and Google’s report, “Unfolding AI: New worlds of fashion,” 60 percent of consumers are willing to engage more with brands using AI over the next three years. They favour interaction with tools such as personalised shopping, AR try-on, visual search, and metaverse platforms. Consumers are much more reluctant to engage with AI generated design and blockchain traceability. [4].
Understanding Consumer Divides in AI Adoption
Emotional involvement is paramount to art and luxury consumers. Viviane Paraschiv, ex-head of Business Development at Farfetch, mentioned that the e-commerce giant’s plummeting market value is largely due to lack of emotional attachment to the brand. Her personal take is that technology should be used to anticipate consumer needs, not replace all human interaction. [5]. Like in romantic relationships, forging an emotional connection necessities understanding the other person’s wants, needs and values.
Art and luxury buyers are not a monolith. They have varying preferences and willingness to engage with certain technologies. Just like a one-size-fits-all marketing strategy wouldn’t be effective across cultures, the same goes for AI strategy across consumer segments. Understanding these preferences should be a priority for luxury and art businesses looking to instil artificial intelligence into the consumer experience.
The Vogue Business and Google report examined how nearly 3,000 consumers from the US, UK, Italy and France perceived AI tools. The report outlines three predominant groups: purists, expressionists, and activists. As expected, these cohorts embody different mindsets. Across the board, “User acceptance of technology is fundamentally based on two factors: perceived usefulness, and perceived ease of use.” As the technology becomes more accepted, perceived usefulness will undoubtedly increase, and brands will get closer with end-users.
Balancing Automation with Craftsmanship
The question of how to balance automation with authentic craftsmanship remains. NMG Chief Product and Technology Officer, Bob Kupbens, recognizes this: “Luxury is sophisticated, it’s complicated, it’s personal - we don’t believe a digital platform can do that on its own. We put these tools in the hands of our sales associates and let them interact with our customers, and AI is the power behind some of these great recommendations.”
Kupben makes a good point. By suggesting that some combination of human and artificial intelligence is necessary, he highlights the important task of maintaining authentic connections. While AI can certainly offer short-term wins and accelerate progress, the long-term challenge will be ensuring that technology and human emotion co-exist.
We must remember that AI merging with luxury and art doesn’t only imply creative and visual uses. Predictive models and machine learning can be the cherry on top of businesses if managed correctly. Technologies are dependent on being used by humans as their guide. At the end of the day, AI should enable the luxury experience, not take it over.
Footnotes:
Pamela N Danziger, “Neiman Marcus’ Cultural Transformation Proves Luxury Is a Relationship Business,” Forbes, October 17, 2022, https://www.forbes.com/sites/pamdanziger/2022/10/16/neiman-marcus-cultural-transformation-proves-luxury-is-a-relationship-business/?sh=6f45581334fa.
Adina-Laura Achim, “How Luxury Brands Use Technology to Gain Customers,” Jing Daily, July 22, 2021, https://jingdaily.com/luxury-brands-technology-ai-burberry-alibaba/.
Veena McCoole, “How AI Is Changing the Art Market | Artsy,” Artsy, October 26, 2023, https://www.artsy.net/article/artsy-editorial-ai-changing-art-market.
“Unfolding AI: New Worlds of Fashion,” Vogue Business, October 20, 2023, https://www.voguebusiness.com/technology/unfolding-ai-new-worlds-of-fashion-google-white-paper.
Viviane Paraschiv. "The Luxury Consumer.” MALB02: The Luxury Market. Lecture at Sotheby’s Institute of Art, London, November 15, 2023.
Lily Holmes
The Luxury Edit Editor, MADE IN BED