October 15, 2024
Whereas other sectors are using larger slices of revenues on information technology advances – Bain shares that IT spending from financial services, for instance, accounts for about 8 percent of sales – retailers at larger have dedicated between 1.5 to 4 percent to digital transformation in this department. Luxury brands land “at the upper end of this range.”
Throughout the sector, company size is currently the most influential factor in how much these companies push artificial intelligence.
Luxury and Technology: Artificial Intelligence’s Quiet Revolution classifies large maisons as those with annual revenue in excess of 3 billion euros and medium-sized options as those with 200 million to 3 billion euros in annual revenue. Small maisons have less than 200 million euros in annual revenue, per the report's methodology.
Compared with just 19 percent of small and medium-sized maisons, 78 percent of large players have AI listed among their top 10 strategic priorities for the next three years.
Regardless of size, a lack of in-house expertise and resources is the most commonly cited barrier to AI adoption.
“Our maison, previously a novice in the use of artificial intelligence, is now taking an interest in generative AI solutions and training our creative departments and human resources,” said Laura Cals, chief of staff to the CEO at French jeweler Boucheron, for the report.
“We are now considering the possibility of incorporating analytical solutions and predictive models as well.”
[caption id="attachment_410463" align="alignnone" width="465"] Among the barriers to AI adoption cited by survey respondents are a lack of in-house expertise, as well as data security concerns. Image credit: Bain[/caption]
Of the small and mid-sized companies surveyed, 42 percent of those backed by a luxury group already have a clear vision of their generative AI strategy, compared to just 13 percent of independent maisons.
“Synergies are important between maisons; as a smaller maison, we benefit from the group’s impulse and experience sharing on solutions developed within pioneering maisons,” said Jérémy Muras, chief digital officer at French fashion label Givenchy, for the report.
“In any case, the solutions we inherit must be adapted to our specific needs and ‘trained’ to our heritage.”
To determine exactly how fashion luxury brands are already putting AI to work, Bain and Comité Colbert analyzed examples across six main areas, including operations and supply chain, retail and ecommerce, advertising and customer marketing, organization and support functions, customer care and product development.
From store footprint optimization to employee training to direct-to-customer recommendations, the average large maison surveyed is testing or planning 5.8 of the 20 specific use cases identified. For small and medium-sized market members, this figure equates to 5.3.
[caption id="attachment_410464" align="alignnone" width="465"] Bain and Comité Colbert analyzed 20 specific AI use cases in luxury. Image credit: Bain[/caption]
“The rise of generative AI is an inescapable and enduring trend that will impact our future and will not fade away like Web3 or the metaverse,” said Delphine Tour Helin, global retail services director at France’s YSL Beauty, for the report.
“We are no longer in a race towards innovation, but in a phase of consolidation to deploy our analytical AI solutions at a larger scale.”
AI-powered pause
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