Artificial intelligence starts to revolutionise luxury industries
It can service customers and harvest their data
Exploiting the progress created by Amazon, Google and other technology companies, a handful of watch and jewellery brands are turning to artificial intelligence to win clients and answer their questions — without the need for a human. These messenger-based chatbots could also help the brands to gather client data without falling foul of a new European law.
This March at the Baselworld watch fair, de Grisogono launched a product-driven chatbot that guides users into selecting one of its Crazymals collection of bejewelled animal pendants and rings. During the conversation, the bot tells you about itself (“I’m Virginia, the world’s first bot born and raised in the heat of Palm Springs”), compliments you, asks questions about your tastes, then offers a choice of jewellery to buy.
De Grisogono’s first effort, last winter, was less commercial than luxurious: a concierge “Botler” — a fusion of “chatbot” and “butler” — to recommend places to go in Swiss ski resort St Moritz.
Both chatbots were created by Paris-based Southpigalle, a conversational software agency that counts watch brand Omega, perfumer Serge Lutens and luxury conglomerate LVMH as clients. A challenging economic environment for luxury brands and increasing competition to retain customers have forced brands to innovate, including adopting chatbots, to better engage with clients, says Southpigalle co-founder Olivier de Cointet.
Also driving AI adoption are advancements in the technology. AI software platforms such as Amazon’s Alexa and Google’s Assistant, which enable machine-based interaction, are found in consumer devices from speaker systems to “connected” cars that digitally respond to user queries. Such machines are helping to normalise AI-based interaction, or at least make it familiar.
Companies have been inspired to adopt AI technology by consumers connecting with family and friends through messenger applications such as Facebook Messenger, WeChat, Telegram and Line. “The web was social and became conversational,” explains Mr de Cointet.
According to a Facebook-commissioned study conducted last year, more than half of survey respondents said they would rather message than call customer service; 67 per cent said they expected to message businesses more over the next two years. The study found that more than 1bn messages were exchanged with businesses and organisations every month; retailers topped the list. Millennials were 25 per cent more likely to message retailers.
Watch brand Audemars Piguet introduced a bot last year that allows users to inquire about a boutique’s opening hours or location and access product suggestions and information. Ron Tolido, global chief technology officer for insights and data at consultancy Capgemini, says that such functions are relatively simple, but notes the potential for more “skilled” AI platforms in the watch and jewellery sector.
“A user interacting with a Rolex or Patek Philippe chatbot, for example, could expect to ask questions about the brand, a watch’s design and its craftsmanship — as well as how to get it and, say, what the brand is coming out with next,” he says. “If you’re into a certain brand, you expect a certain terminology and vocabulary. For brands, it’s important to speak the language of the target audience.”
Jaeger-LeCoultre also launched a chatbot last year — users put watch reference numbers into the Facebook-based bot and it suggests suitable straps. “That’s where AI comes in, pulling references and straps from our database to recommend to clients,” says Zahra Kassim-Lakha, the company’s UK market and global strategy director. Since this March, following a soft launch in September 2016, US customers have been able to buy directly through the bot.
Jaeger-LeCoultre’s example shows that AI is not only able to improve customer engagement but also serve as a powerful tool for brands internally. Because information is provided by a customer through direct conversation with the brand, the data are notably more insightful than those collected from, say, cookies or one’s browsing history.
When combined with other data — such as a brand’s customer relationship management database, a user’s social media profile or third-party demographic data — this has the potential for “conversational commerce” says Mr Tolido. This is where brands can talk to clients to better understand trends, customer emotions and sentiment, and adjust product management strategies accordingly.
“The better dialogue you have with customers, the more they share and you’re probably better in predicting future trends or making new products that will be successful,” says Mr Tolido. Meanwhile, Mr de Cointet’s company is working with LVMH to potentially allow boutique staff to locate suitable products, all over the world, that meet customer needs.
AI is making its way directly on to watches too. Future models of TAG Heuer’s Connected Watch will be AI-ready, while the new Montblanc Summit, equipped with the AI-driven Google Assistant, launched this summer. This offers functions such as travel directions, translations and assistance with dictating emails, yet the watch “still feels, looks and behaves” like a mechanical timepiece, says Felix Obschonka, Montblanc’s associate director of new technologies. Montblanc chose AI, says Mr Obschonka, not only because voice activation was more conducive for launching apps on small screens (versus swiping or typing), but also because “talking to the watch to access data feels much more natural” on tiny screens.
Brands may gain an additional boost from AI thanks to an unlikely source. When the EU’s General Data Protection Regulation (GDPR) comes into effect next May, companies will be required to comply with stricter laws governing data collection, storage and usage. These range from asking for explicit consent before using personal information to a new 72-hour deadline for identifying and reporting security breaches. Companies found in violation of the new laws can be fined up to 4 per cent of their previous year’s annual global turnover or €20m, whichever is higher.
While daunting, the GDPR can be an opportunity for brands too, suggests Mr Tolido, as consumers may be more willing to share personal information — through direct AI-driven dialogue — knowing that their data are being regulated by a watchdog.
“In the end I believe that many customers want convenience and dialogue with their favourite brands or designers,” he says. “If I have all sorts of second thoughts about what’s being done with my personal data, I’m not going to trust and have a conversation with brands.” However, regulation like GDPR could “give you faith to freely move around the house”.
But in the meantime, brands that do not want the likes of Google and Amazon to own their data must develop proprietary conversational agents. “Luxury brands want clients in their environment, not Facebook’s,” says Mr de Cointet. (This summer, de Grisogono moved the Crazymals chatbot from its existing Facebook Messenger platform on to its own website.) “Creating that unique conversational connection and bringing services that are useful throughout the consumer journey is absolutely strategic and urgent for companies.” Talk might be cheap, but it is becoming more valuable too.
Augmented reality hits the wrist
At this year’s SIHH watch fair in Geneva, Jaeger-LeCoultre invited visitors to “try on” its latest novelties. Users were given a QR-coded bracelet and asked to select, via an iPhone app, a watch of their choice. Placing their bracelet and wrist under the phone’s screen, the watch was then digitally projected on to their wrist.
This was powered by augmented reality, whereby electronic devices create images of digital objects superimposed on the real world. The watchmaker has since rolled out the technology to its boutique in London, with its more tech-adept consumers.
The technology enables users to print, post and share the watch “on” their wrist, which not only spreads the augmented reality word but also helps Jaeger-LeCoultre collect customer information.