Let the AI luxury game begin!
The luxury sector is going to be profoundly transformed by the adoption of ultra-powerful computer systems that use artificial intelligence (AI) for every step of the value chain.
From the initial creative process to producing and managing stock, AI will be everywhere. Luxury brands – like governments – are investing massively in this technology because they know that if they don’t, they will lose the race and battle for supremacy.
AI helps you win time, reduce costs and produce quantities for which you have a pretty good idea of what the demand for them is. In the luxury business, AI does mainly a few concrete things: it frees humans from tedious tasks, it helps make predictions about prices, market trends and turnover. It also generates texts, images, sounds and videos. The latter is called generative AI.
Already many people use generative AI for composing mood boards, creating collections, photos and videos and music for ad campaigns that will be posted on Instagram, TikTok, other social networks and billboards, or printed in glossy magazines.
The only catch with generative AI is that whatever it creates is not protected by intellectual property (IP) rights.Creations by computers are not creations of the mind, and therefore not protected by IP rights.There has to be an author, some human being behind it.
“What is created by AI cannot be IP protected,” explains Zeeger Vink,former president of the International Trademark Association and now Intellectual Property Director of the Swiss group MF Brands (Lacoste, The Kooples, Aigle) controlled by the Maus and Nordmann families.
“Some courts have accepted that there may be so many different human-led prompts that in fact the creation is with human assistance. But it creates a legal loophole, as you need to keep track who is creating what with AI,” Vink explains.
Vink argues that one of the problems with AI creations is that they can and will be copied. It may be acceptable for a small capsule collection, but it will not work for a bigger business, he believes.
THE KOOPLES
The fashion brand The Kooples has just produced a small capsule collection of eight pieces created by AI. It was helped by imki, a French company that provides brands with AI solutions that speed up the creative process and the production of a prototype. The collection, which includes items such as a jacket and a skirt, will be in stores at the end of September. It’s not clear yet if the brand will communicate or not about the fact that these new products were designed with the assistance of AI. The brand’s CEO Anne-Laure Couplet was not available for comment.
Raul Cruz Bonilla, EMEA Vice-Presidident of imki, argues that the designs his company helped create with AI do belong to The Kooples. They use the company’s proprietary database of images, fabrics and colors that were “tagged” or identified by its graphic processing unit (GPU) so that the machine can exploit them using AI. “Driven by their DNA, brands integrate their codes, their identifying product attributes, and the foundations of their brand” into a GPU which then uses them to create new products, imki explains on its website.
Just this week,Cruz Bonilla said, imki delivered to some of its clients the first web app that allows them to use their own graphic processor unit to make prompts in a highly securized digital environment and be autonomous in the creative process. “These images will belong to them since they created them with their own proprietary data,” he argued. Prompting means giving specific instructions to the system on what it is to generate.
More and more brands were digitalizing their design heritage (such as images) and other forms of data that belongs to them on secured servers, he said. This data can in turn be used by AI systems, analyzed and potentially be used to create new content.
At the Paris technology fair VivaTech in May, Cruz Bonilla showed how imki was able to create a collection in 21 days, from the moment the concept was decided to the reception of a prototype that met production specifications. “This is an incredible gain of time in making products arrive on the market,” he told Miss Tweed. “By bringing the product closer to demand, we reduce the risk of unsold, overstocked and wasted products.” Cruz Bonilla was one of the keynote speakers at Miss Tweed’s “Luxury at the Summit” event in Val d’Isère in April.
PANDORA’S BOX
Pierre Diringer, who works as a freelance creative director, argues that AI helps designers widen the scope of their creativity and test new ideas. It also automates repetitive tasks. However, it also has a dark side. “I see AI like a Pandora’s box,” Diringer told Miss Tweed. “Once people get used to the incredible gains of time and efficiency thanks to AI, they will not go back,” he predicted. Already many creatives are panicking about the arrival of IA. You no longer need photographers, film production and post-production people. You also don’t need to travel far away to get images of spectacular landscapes that can be generated by a computer. “I think AI is a real revolution and it’s going to completely overhaul the creative industries,” predicts Diringer.
Already, some creative agencies are seeing some clients warning them that they are planning to reduce the budget they were going to allocate to a given project. They know that AI will be used and therefore fewer highly qualified human hours will be required. “It’s a bit of a worrying trend,” one manager from a major Paris-based creative agency said.
BULGARI
Some luxury executives like Bulgari CEO Jean-Christophe Babin have been testing AI applications to check out how they work and see how people react to them. In May, Babin posted on his own Instagram account a series of beautiful women in stunning jewelry, with idealistic scenes of Rome in the background.“I wanted to personally test AI to see how it works,” Babin said. “For me it helps you materialize your dreams.”
However, the public’s response to these AI-generated images published on his personal Instagram account was mixed. Some thought it was great, others were shocked by the exercise.
AI is great for back-office functions, analyzing data and other things consumers do not see. But when it comes to what people call “consumer-facing” things such as design and advertising, where is the limit? European legislation forces brands to say “generated with AI” on any creation they produce, sell and post publicly. Brands cannot fool consumers on that front.
Luxury products command high prices because they are supposed to be of high quality, made by humans and created by humans. Will something created and produced by a robot make people dream as much as something that is designed by a human spirit and made by hand? It’s a question worth asking.
The answer is probably “no.” This debate is similar to the one regarding lab-created diamonds versus natural ones. The former, which took millions of years to form, will always make people dream more than a diamond that came out of a powerful furnace, some people argue. There is also a debate about whether lab-made diamonds better preserve the environment than their natural counterparts considering the vast amounts of energy they use.
Stéphane Galienni sees a bright future for AI in the luxury world. He will publish a book in September in French Luxe et Intelligence Artificielle: Opportunités et Révolution des usages (Dunod).
He argues that AI not only helps win time but also tests consumers’ appetite for certain products. For example, brands can put up on their website a product that was designed by AI but has not yet produced and tell them that If they want it, they can buy it, and it will be shipped to them in a few months’ time when it’s ready. Spanish brand Desigual already does that, he says. “This helps create desirability,” Galienni argues.
Computers make choices based on statistics. Hence, they are devoid of any judgment of whether their creations can be offensive or shocking to certain people.
Some brands have already paid the price for letting computers produce images that people found terrible. The French handbag brand Lancel recently displayed a campaign featuring surreal images of a cyclist carrying piles of suitcases on the back of his bike. He was dressed in red, as if he worked for Cartier, and thus was misappropriating the jeweler’s brand’s codes.
Lancel boasted that it had only spent six hours on generating the images. Is that going to make consumers dream? Probably not. Galienni produces avatars and images for luxury brands which they use for their social media. Since they need to generate new images all the time, it is a low-cost and speedy solution for them, he says. Galienni also sees growing demand from brands to train their staff to use AI.
Not all campaigns backfire like Lancel’s. The private champagne brand Taittinger and the fashion label Jacquemus have been putting images that people found fun to watch and gave life to the brand.
Most luxury groups such as LVMH, Kering and Richemont have already invested vast amounts in AI to remain competitive. Microsoft already works with LVMH to help the group develop its own internal AI systems. LVMH’s Louis Vuitton has long used AI to manage supply chains, track demand for products and also design sneakers. Dior has a system called Astra using AI to monitor everything that happens with the brand online, from complaints on social media to problems with its e-commerce website.
Jonathan Siboni, CEO of data analysis firm Luxurynsight, uses AI to predict price fluctuations and help brands predict what sales a given boutique should be generating. That latter task not only takes into account its historical performance but also where it is located and the profile of people living or shopping in that area. This helps executives decide whether or not they should keep a given boutique open or closed it if it’s performing badly. If the revenue of a boutique is particularly high, it may also mean that it is selling stock abroad through unofficial channels, called the “grey market.” This is particularly true for stores in touristic areas.
“For me, AI helps people validate or contradict managers’ instincts,” Siboni said. “Actually, most successful people in luxury use AI and have strong instincts.” In light of the high stakes in profitability and sales, using AI to leverage data helps luxury executives make better informed decisions, he argued.
“AI also helps you take more risks and try out new things, because you have data that tells you how to maximize opportunity.”
AI is like the Internet. Only those luxury brands that have adopted it fast and well will win the race.