The AI rush is on. Having been in the spotlight over the past eighteen months thanks to its accessibility to the general public via Chat GPT, generative artificial intelligence is likely to transform the vast majority of business sectors as its solutions proliferate. Luxury goods are no exception to the rule, as confirmed today by a study conducted by the Comité Colbert and Bain & Co.
The third in a series of studies on luxury and technology conducted by the French organisation for some 80 luxury goods companies and the consultancy firm, the study is based on a questionnaire sent to the member companies of the Comité Colbert and interviews with various decision-makers and technical profiles within the companies.
At a time when AI is emerging as a strategic tool and is being looked at by every management committee on the planet, the study “Artificial intelligence: the discreet revolution”, is unveiled.
“With this study, we wanted to provide vision and perspective. As well as understanding possible uses, our idea was to quantify the degree of adoption of solutions and those tested by companies. This will also enable us to measure their development over time,” explains Mathilde Haemmerlé, partner in charge of the Luxury Goods division at Bain & Company in Paris.
“We have covered analytical artificial intelligence, which has already been deployed for several years by groups, particularly for forecasting stocks or allocating them, and which requires considerable resources and specialised skills to create models, and generative AI, which has emerged more recently and is based on processing structured and unstructured data and is more accessible. What we see is that in the next 3-4 years the two will converge. It’s a revolution, because its fields of application concern the entire business value chain. Generative AI represents a huge wave. However, the culture of luxury, with its notions of intimacy, human relationships, authenticity and expertise, means that luxury has to find its own model. It won’t be possible to apply market solutions. AI will intrude with a significant touch of discretion and, this is what we are hearing from the houses, must never replace the human but be present to augment, participate in and enrich.”
The wave has not yet overwhelmed the sector, however. According to the study, which identified 20 AI use cases, on average homes have deployed 1.6. These are mainly operational efficiency topics, such as sales forecasting tools. However, in addition to these established developments, the companies are currently testing an average of 5.6 AI applications.
Four key themes emerged: operational efficiency, customer relations, augmented teams and the enrichment of creative functions. And while the impact of AI on the creative professions is regularly discussed, in reality the priority is operational efficiency. According to the study, 60% of fashion houses have adopted or are testing sales forecasting solutions and 50% are testing stock allocation solutions. AI should help to refine customer relations, through analysis, with enriched clienteling solutions, with 44% of houses using it to perfect the segmentation of their clientele, but also to provide more personalised content. This is a key area of work for half of those surveyed.
To develop this content or gain in speed and flexibility, the management committees also envisage AI being able to support employees in their tasks, whether in training or in automating low added-value tasks.
Creative teams more reticent
Finally, on the creative side, according to the study, the applications would also involve tools to support creation, but only 5% of companies have started to move forward in this area. “While in the operational teams, acceptance of AI is almost 90%, the creative side is clearly the field where there is the least acceptance. The application would provide support for inspiration, but in no way would it replace the creative spark. The companies are well aware of the challenges, and are redefining their missions. So it’s a major change management follow-up. But they see a gain in efficiency by focusing teams on tasks with higher added value, and in a period of standardisation in the luxury market, the possibility of being more relevant with the same number of staff. Daily life will change, but in a subtle way. The teams will remain in control of the artistic direction, the message, the product and the campaign. AI should enable them to do things better and faster. It’s a redefinition of tools, but not of tasks.”
But the real change may lie elsewhere. Generative AI could be an asset for independent brands. Because analytical AI is very expensive, often requiring the recruitment of data scientists, these technologies are currently adopted three times more by large groups than by smaller brands. But with generative AI technologies becoming more accessible both economically and technically, the game is changing.
“In the big houses, there are currently an average of 5.8 tests and pilots. In the smaller ones, we are at 5.3. This means that the start-up on generative AI is just as powerful for the whole sector. This came as a surprise, and can be explained by the fact that all the brands are seeing a return on their investment in these developments. This is in the top 10 strategic issues for all executive committees,” analyses the Bain & Co partner.
“This craze has nothing to do with investment in metavers,” says Bénédicte Epinay, general delegate of the Comité Colbert. “For us, the theme of AI was an obvious one. There are questions about data security, intellectual property and the fact that for a luxury house, technology should not be too obvious. What surprised me, however, was a kind of ebullience. The groups and companies with labs are teeming with ideas. Comex may be taken aback, but they’re watching, because it’s very much part of the value cycle of the companies. We’re not just talking tech here, we’re talking business!”
