Luxury brands are traditionally reluctant and slow when it comes to adopting the latest digital trends. For example, a stunning 40% of high-end brands still don’t sell their products online. This doesn’t come across as being entirely strange if we bear in mind that people who buy luxury goods insist on the highly personalised shopping experience.
Moreover, it’s a truth universally acknowledged that consumers willing to splurge on jewellery, exquisite watches, and haute couture possess a distinctive taste meaning that they look down on e-commerce and consider it unsuitable for their sophisticated approach to shopping. Besides, e-commerce is believed to be lacking in exclusivity, and that’s something that both luxury brands and their customers hold in high regard. No wonder that online shopping accounts for only 4% of luxury sales.
But, with the development of AI and other disruptive technologies which allow personalization and a tailored customer experience, luxury brands have finally found a match and embraced the luxury of digital innovation.
Collect and Process Customer Information
Creating an exceptional customer experience is something that every luxury brand strives for. Now, with the help of AI, deep learning, and big data, it’s possible to understand your customers better than ever before and be in the know about what exactly they want and need.
For example, Stitch Fix, a personal style service, combines AI with the information that their customers provide in order to create tailored wardrobe ensembles. To be more precise, customers fill out an 85-question quiz after they sign up. Using their customers’ body measurements, this company manages to select the most suitable pieces based on the data such as what particular skirt was favourably received with other customers with the same body type. Almost $1 billion in revenues and more than 2 million loyal customers show that the company has succeeded in implementing AI. It’s almost as if you have your own AI-powered personal shopper who’ll remember all your preferences.
Burberry, a luxury fashion brand, uses different kinds of loyalty and reward programs in order to motivate their customers to share personal information, including social media activity, which is then used to create and evolve a comprehensive brand history of each customer. And what’s even better, this works both for online and bricks-and-mortar stores, since assistants have access via tablets to the carefully analyzed data according to which they make clothing and accessory recommendations when a customer enters the store. The company increased their repeat customers by 50% in 2015 thanks to this technology. In addition to that, Burberry equipped their physical stores with RFID tags which communicate with customers’ smartphones and allow them to get information about a particular product, as well as how to wear it and pair it with other items.
Dorchester Collection, a luxury hotel operator, decided to take their customer service to the next level by employing AI. Instead of guessing what their customers want and what they think about their hotels, this company went far beyond customer surveys and mystery shoppers. The AI Metis platform is a powerful machine that doesn’t just scratch the surface – it’s capable of reading, processing, and analyzing thousands of online customer reviews and identifying what customers like or don’t like. This way, they totally eliminate the guesswork and make sure that their customers’ observations or complaints are taken into consideration. This intelligent platform understands almost all languages and can condense key findings into valuable reports.
Hilton introduced another novelty into the hospitality industry – Connie, a robot concierge. Its role is to help guests decide on what to visit, where to dine, and how to easily find their way around the property. Connie talks to visitors in a friendly and helpful manner, and the more it interacts with customers, the more skilled it becomes in providing recommendations and personalizing customer experience.
Fight Counterfeits
According to the Global Brand Counterfeiting Report 2018, luxury brands lost $1.2 trillion due to global counterfeiting, while it’s expected that this amount will reach $1.82 trillion by 2020. Burberry, being one of the most frequently counterfeited brands in the world, decided to help their customers tell whether the product they’re eyeing is genuine or fake. Namely, the company enlisted the help of the intelligent image recognition system Entrupy, which can use a photograph of a small section of a product to determine the authenticity of the item in question. This technology uses minuscule details such as the texture and weaving to spot counterfeits with incredible accuracy – 98% to be more precise. This smart hi-tech solution allows the company to fight the lucrative counterfeiting business, and spot shady retailers and shut them down.
Improve Communication with Your Customers
By 2020, almost 50% of all searches will be voice searches. An increasing number of luxury brands leverage conversational AI chatbots in an attempt to provide all the information their customers need in a timely manner, thus removing potential friction and speeding up their purchasing decision. So, we’re currently witnessing the rise of chatbots and these smart, AI-powered algorithms can help you attract potential customers and keep them. The fact that chatbots can legally collect data and still be GDPR-compliant is a nice addition.
The Dior Insider is an AI tool which allows the brand to connect with their customers and brand admirers in a personalised and fun way. It’s integrated with the Facebook messenger, and besides being able to chat, this solution is also e-commerce-enabled which means that it displays personalised slideshows with links to the online store.
Other luxury brands have tapped into this technology too. De Grisogono, a Swiss luxury jewellery brand, launched its Botler, which is a synergy of a chatbot and a butler, in order to help their customers find different amenities in St. Moritz, the famous Swiss ski resort. This Facebook messenger application is the idea of the De Grisogono’s founder and reflects his love of the luxurious mountain village by providing valuable tips and information about how to make the most of your ski trip.
The company has one more ace up its sleeve. Their product-driven chatbot was designed to talk to potential customers and help them navigate through the selection of the brand’s fine jewellery. This AI chatbot is capable of making a small talk, complimenting customers, and asking questions about their taste and interests. This way, it humanises the brand and collects valuable information, based on which it makes informed product recommendations.
Implement Smart Search
Louis Vuitton, a luxury retail company, has raised the bar for other brands when it comes to digital marketing. Namely, the company which currently tops the Gartner L2 Digital IQ Index: Luxury China Report, heavily invested in SEO and social search. One of their most innovative and effective strategies was creating the so-called Fragrance Diagnosis Tool in cooperation with the Baidu Artificial Intelligence lab. This cool widget targets people who search their keywords, or competitor keywords, and prompts them to upload their photos, which are then analyzed by means of facial recognition technology. As a result, they are matched with a celebrity with whom they share similar facial features, and based on that one of the seven LV perfumes is suggested to them.
All these examples show that the luxury industry can greatly benefit from implementing AI in their digital marketing.
