As younger generations, particularly Gen Z, enter the luxury market, consumers increasingly value fashion brands that prioritize eco-friendly packaging, honest reviews, and a diverse product range that caters to various body types. The luxury shopper today is mindful and conscious – and expects the companies they do business with to be the same. To meet these growing expectations, brands must continuously innovate and reinvent themselves, discovering fresh and exciting ways to appeal to consumers while delivering a shopping experience that meets their needs and fosters a deeper connection.
Unsurprisingly, evolving technology in the luxury industry has been helping fashion retailers stay ahead of trends and engage with customers like never before. Technologies like Augmented Reality/ Virtual Reality (AR/VR), the Internet of Things (IoT) and smart retail, for example, have been transforming the industry in the last few years. And as new innovations enter the market, brands will continue to embrace and integrate cutting-edge solutions to stay competitive and win over consumers.
Here are 6 of the biggest technology trends reshaping the luxury fashion industry today.
1. Considering the uses of generative artificial intelligence (GenAI)
More and more fashion businesses are considering how to use artificial intelligence to reduce manual processes and speed up production—and the luxury sector is no exception. According to the most recent State of Fashion survey from Business of Fashion in collaboration with McKinsey, 73% of executives stated that GenAI will be a priority for their business. In an industry that moves faster each year, AI tools can be a gamechanger for many fashion brands. They not only allow brands to engage with customers more conveniently—such as through natural language-powered shopping assistants that deliver personalized product recommendations—but also open up new creative opportunities.
For example, the French-Moroccan luxury fashion label Casablanca partnered with an AI artist for its Spring/Summer collection last year, combining human touch with generative image technology to stylize a campaign set in a desert landscape. And iconic luxury French brand Jacquemus used AI in a marketing campaign to make it seem like giant handbags were skating through the streets of Paris.
While this type of collaboration has yet to become widely popular, AI has the potential to become a valuable tool for designers. It can help them generate mood boards and visualize concepts faster and easier, as well as encourage more experimental creations, while avoiding the more time-consuming and tedious aspects of the design process.
2. Controlling the quality of resale items
Recently, the secondhand market for luxury fashion has become extremely popular, especially for consumers who want to buy luxury items, but don’t necessarily want to pay the original price. Many brands have been taking notice of this shift of consumer behavior and tapping into the market to promote sustainability, as well as to make themselves more accessible to a wider audience.
However, like with any luxury item, there comes the need to ensure its authenticity, both for the brand’s integrity and customer satisfaction, which is why many retailers are using blockchain technology to combat issues with counterfeits when accepting used items for resale.
Embedding Radio Frequency Identification (RFID) and Near Field Communication (NFC) tags into products is just one way luxury fashion brands are verifying authenticity, as these tags are able to store information, such as its origin, manufacturing details, and distribution journey. Brands like Louis Vuitton and Prada have already implemented this technology to verify their luxury goods and track the lifecycle of products, so consumers can be sure they’re getting the real deal.
Other brands like Vacheron Constantin are using digital passports to authenticate their timepieces, which includes information about the product's origin, materials, and ownership history. And even more fashion brands will begin implementing this technology soon due to a new European Union law that will require them to fit their products with digital passports in 2025.
3. Creating a stronger online presence
Online sales are projected to account for 25% of all luxury sales by 2025. Because of the increasing preference for e-commerce, many retailers are exploring technologies that can help them improve the online shopping experience for their customers and stay top of mind.
Spanish luxury fashion house, Loewe, for example, has embraced platforms like TikTok to showcase the faces behind their brand, demonstrate their clothing on models, celebrities, and influencers, present some behind the scenes of their design process and product creation, and even take part in the latest online trends. Not only does this type of engagement make the brand feel more authentic and honest, but it also increases their discoverability among their target audience.
Some fashion brands are improving their e-commerce sites with virtual try-on features, 3D product catalogs, and AR technology to show customers a more realistic example of what products would like in person and how they wear. For example, Gucci recently introduced a new shoe try-on feature in their app using AR, which resulted in a 300% boost in online sales.
4. Introducing immersive pop-up store experiences
With 85% of retail sales still taking place in brick-and-mortar locations, luxury brands have the opportunity to blend both digital and physical experiences, also sometimes referred to as “experiential retail,” to attract more customers to their stores.
One way that luxury brands are doing this is through experimental pop-ups, designing each one differently depending on the location. Earlier in the year, Louis Vuitton launched over 50 pop-up stores around the world, offering a unique set of experiences that pushed the boundaries of traditional retail. The pop-up in Paris included special features like a designated music space, while the one in Seoul provided an exclusive postcard personalization service and an intriguing culinary adventure.
Other brands like Jacquemus are taking the pop-up experience to the next level, using interactive installations and 3D sensory experiences, surrounding customers with surrealist visuals and designs that deliver a hyperphysical customer experience.
5. Using customer data for personalization
Luxury fashion brands are harnessing data to deliver highly personalized experiences to their customers and enhance loyalty. By collecting and analyzing data from multiple sources, such as online shopping behavior and in-store interactions, these brands can develop detailed customer profiles and tailor the shopping experience to their customers’ needs. This technology also allows them to curate their campaign strategies and product recommendations based on individual preferences.
For instance, brands like Chanel and Gucci use data analytics to understand customers' unique tastes and purchase histories, which enables them to send personalized emails featuring customized product selections and exclusive offers. In stores, sales associates can access customer data to provide better service, ensuring that recommendations align with the customer’s style and past purchases.
6. Unifying channels across the business
Another technology that’s increasing in popularity in the fashion retail world is comprehensive business management software, which enables brands to streamline operations, such as sales, financials, inventory, customer loyalty, eCommerce, and more, on a single, end-to-end platform – instead of relying on multiple, separate systems. This holistic approach allows luxury brands to maintain consistent, high-quality service across all touchpoints, and access their information from one centralized place.
Take luxury fashion retailer, Bongénie, for example, which adopted LS Retail’s unified retail management solution, LS Central, to manage its stores. With the help of LS Central, Bongénie has been able to create a true omnichannel shopping experience for their customers, uniting both their physical and online channels to ensure accurate stock availability and sales data across the business. “We have achieved customer satisfaction thanks to our ability to present on our website stock information, including availability in the stores,” says Hugo Roche, Digital Manager at Bongénie, “This is now the kind of information customers demand.”
Is your luxury retail business ready for the future? Explore how LS Central can keep you at the forefront of the industry. Contact our experts today to learn more.
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