Top Luxury Brands Embrace Technology and Artificial Intelligence

However, disruption is on the way. Generation Z will soon be a dominant group of luxury goods consumers. This generation has known technologies like smartphones and the internet their entire lives. And then there are younger millennials who’ve grown up in a digital dominated world too.

One thing is clear — now’s the time for luxury brands to start getting tech-savvy. And luxury brand managers are aware of that. Here’s how today’s most dynamic luxury companies are integrating tech into their customer experiences.

Technology and Big Data in the Luxury World

Innovative tech trends create a widespread buzz about leading luxury brands. But more than any specific technology, it’s the massive amount of customer data that is reshaping the customer experience.

With so much data at their fingertips, companies have likewise begun investing in tools to protect it. Even regulations like GDPR focus on data protection. That’s why virtual private networks (VPN), ​file encryption software​, and other means to protect data became so prominent.

By deploying similar technologies, luxury companies can reduce the risk of embarrassing and costly data breaches like those at ​Neiman Marcus​and ​Marriott​. It helps companies to maintain consumer confidence in their brands and benefit from other changes in tech.

Technology and AI Trends to Watch Out For

1. Personalization

eCommerce platforms were the first to push this trend. For example, the experience of signing into Amazon and seeing recommended products or welcome back greetings. Not to mention getting targeted emails after you checked a product but didn’t buy it.

Brands across the fashion industry have picked on these trends to deliver personal experiences based on user browsing and purchasing behaviors. The best brands have even found a way to

take this into their ​brick and mortar locations​to provide a unique touch to the real-world experience.

2. Digital Meets Luxury Goods

One of the most significant forces of disruption is wearable technologies. Take smartwatches, for example. In the past, a customer may have purchased a $10,000 Rolex watch. Nowadays, younger luxury consumers are more likely to opt for luxury branded smartwatches instead.

It may seem like less of a profit for luxury brands. But these consumers buy new smartwatches every 1-2 years on average, as well as purchase extra accessories, including different watch bands and digital goods like clock faces and apps.

Moreover, there’s the interaction that occurs daily between customers and brands. In the past, there was no such relationship between the watchmaker and consumer. It triggers additional revenue through a wide variety of streams that far exceeds the $10,000 one may have spent on a Rolex.

That’s what ​Montblanc, TAG Heuer​, and other luxury watchmakers have started to dip their toes into the smartwatch arena.

3. AI Chatbots

AI chatbots are redefining the company-customer interaction. The capabilities of AI chatbots have grown immensely in recent years, and they can do what their human counterparts can’t — provide assistance 24/7.

Luxury brands have now used AI to:

• provide instant answers to questions,

• suggest products,

• deliver updates on delivery status.

We’ll continue to see their deployment to promote customer engagement further over the next few years.

4. Influencers

Luxury brands were one of the slowest to begin adopting influencers in the marketing campaigns. Influencers are, of course, bigger than ever, and luxury brands have started catching up. In 2019, brands spent ​$8.5 billion in influencer marketing​. That number will continue growing throughout the 2020s.

But why are influencers mentioned in the article on tech and AI?

Vogue China has gone so far that one of their ​influencers is completely virtual​. And such technology uses become more widespread. So you can expect luxury brands to continue to blend the best of real and digital worlds.

5. Augmented Reality

This year’s smartphone feature is augmented reality. AR has been around for a while now, but new releases from Samsung and Apple make it more user friendly than ever.

Luxury brands, too, have found interesting ways to play with AR. Whether it’s ​“blackjack” outside Hugo Boss stores​or trying out Tissot watches, these innovative features create the wow factor that tomorrow’s luxury customers are looking for.

And these technologies are really just the beginning. A decade ago, you couldn’t have predicted how Uber, Airbnb, and other big tech companies would change our lives. So too should you keep your eyes open to all the amazing customer experience that technology will unlock in the next few years.