Deloitte: AI to drive 'hyper-personalization in luxury retail'.

Luxury fashion

Over the next 12 months, generative AI (GenAI) and other tools will be used by more luxury retailers.

Luxury fashion retailers are implementing artificial intelligence (AI) to personalize customer shopping experiences.

More than half (52%) of retailers surveyed intend to use generative AI (GenAI) over the next year for content creation in publications and reports, and 25% intend to use it for branding and marketing campaigns, according to Deloitte Global's “Retail Reimagined:”. “Creating luxury customer experiences using data-driven insights” study. The report coincides with a recent Algolia poll which found that four in 10 (44%) respondents believe AI can improve your fashion sense.

“Consumers expect brands to understand their individual preferences and provide personalized interactions at every touch,” said Ida Palombella, partner, co-leader of fashion and luxury IP and IT, Deloitte Italia. and importance in the physical and digital realms. From styling to AI chatbots and beyond, the possibilities that GenAI brings are decidedly endless.

Deloitte Global cites several examples of luxury fashion retailers using artificial intelligence. In March 2023, The Prada Group partnered with Adobe to enhance the online and in-store customer experience through real-time personalization powered by data analytics. And during London Fashion Week in February 2023, Moncler Genius launched its first commercial campaign created entirely by GenAI, while Valentino launched a campaign for Maison Valentino Essentials, a collection with a new take on traditional menswear, also created with GenAI.

The report found the issue of unstructured data as one of the main obstacles to the wider adoption and use of GenAI by fashion brands, which often contains sensitive personally identifiable information (PII) and raises concerns about consumer trust and data security.

To cultivate trust with consumers, Deloitte says luxury retailers must base the design, implementation and communication of AI tools on four “fundamental” pillars: human connection, transparency, capability and reliability.

“Retailers are racing to improve the customer experience, from virtual shopping rooms to personalized recommendations and beyond,” said Ian McGarrigle, president of the World Retail Congress. “The luxury retail sector has always led the way in terms of understanding its customer base and now has a much wider range of tools at its disposal – the key will be learning to separate valuable data from redundant and obsolete” .

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