LVMH closes an agreement with Google to incorporate AI into its market strategy. It is the latest but not the first of the luxury brands.
If there is one industry that could quickly be associated with all things creative and where ideas are arguably important, it is fashion, especially when it comes to runway and luxury brands. You just have to think about how they are represented in popular culture to visualize this situation and this perception of things. The fashion star responsible for the brand has brilliant and groundbreaking ideas, which he has extracted from a deep creative process that collides with the status quo and which translates into something with high cultural impact.
However, the fashion industry, even at this very high level, has always been closely linked to the world of business and technological innovation. The great maisons of the Belle Époque Paris were pioneers in using the latest marketing techniques. All of them benefited from advances in technology to have new prints, new colors or new fabrics.
Now, with a century in between, things are not very different. Big luxury fashion brands are not only elements of creative genius, but also examples of how to integrate technology into business and marketing strategy. That technology is now artificial intelligence.
One of the latest big announcements has been made by LVMH, the French luxury giant that owns fashion, cosmetics, perfumery and liquor brands. LVMH has just signed with Google Cloud to integrate machine learning and artificial intelligence in the company. It is not known how much money the agreement represents, but it is known what the company hopes to get out of all this. The agreement has an initial duration of 5 years and LVMH will begin to apply it to the 15 key brands of the conglomerate before integrating it into everyone’s culture.
Artificial intelligence will allow them, first of all, to manage their products. The company hopes to optimize inventory, but also anticipate trends and spikes in demand. Thanks to AI, you can anticipate what consumers will want and prepare for it.
They will also use it, as a second basic point, to improve the customer experience. It is not, in reality, anything that the companies that are betting on artificial intelligence are not already doing, but their movement shows that AI is valid for everyone and that all sectors, even those that are more linked to ideas, have potential applications.
A general movement in the industry.
And LVMH is the last but not the first. In recent years, luxury companies have embraced digital transformation and made it a crucial part of connecting with consumers. These brands brutally resisted making the leap to eCommerce and digital environments (for a long time they defended that their potential buyers were ‘not there’, they were wrong), but now they are quite clear that technology is essential to connect with their market niche . .
McKinsey predicts that a fifth of luxury purchases in 2025 will be made online and that 80% of all purchases will be digitally influenced. Companies have incorporated different IT elements to remain relevant, from more presence in social networks (a kind of basic step) to advanced elements such as the integration of technology in product design or the use of virtual and augmented reality in the customer experience. customer. Of course, artificial intelligence will also enter here.
The companies that are incorporating it are noticing the results. Gucci emerged from a crisis because it knew how to transform digitally and position itself better online. Now, it has a high weight among millennials. Burberry is already using artificial intelligence and big data to drive sales and improve relationships with consumers. Everything is personalized according to each of the potential buyers.