In a new white paper in partnership with Google, Vogue Business uncovers how the next wave of artificial intelligence will impact the perceived value of luxury brands.
A new study created by Vogue Business and Google found that the incorporation of AI enhancements by brands has the potential to significantly boost brand perception, drive loyalty and improve consumer spend. The research, which surveyed 2,976 luxury fashion consumers across the US, UK, Italy and France, aimed to investigate how the introduction of AI tools impacts both the perception of brands and purchase intent of shoppers.
The research identified three distinct consumer mindsets, each with their own specific priorities and values driving their shopping choices: purists, expressionists and activists. By diving into the unique values of these three key groups and the beliefs that unify them, brands can better understand how AI can impact brand perception and consumer behaviour for each group. Additionally, the research reveals at which points in the purchasing journey shoppers are influenced by AI, as well as new opportunities for using AI in the future. Purists are connoisseurs of tradition, prioritising authenticity, craftsmanship and the pursuit of refined garments. Activists are conscious consumers drawn to brands that align with their values, particularly when it comes to social impact. Expressionists seek to stand out from the crowd by maximising their individual style and selecting brands that represent a joie de vivre.
Persuading purists
Purists are the most engaged consumer groups when it comes to practical solutions offered by AI, such as personalised deals (37 per cent say this would encourage them to purchase from a brand) and recommendations (62 per cent). Collectively, those solutions have the potential to add up to 17 per cent more revenue. With this consumer group making up 69 per cent of consumers, personalisation becomes key to the widespread adoption of AI in the customer journey, and it’s this use case for AI that brands should tackle first for a quick win.
Beyond the purist group, investment in personalisation is shown to offer short-term gains across all three consumer mindsets, with nearly half of consumers (47 per cent) saying they would be prepared to spend up to 20 per cent more on in-store personalised shopping, while a third of those questioned (33 per cent) say they would be willing to pay up to 10 per cent more.
Appealing to activists
Longer-term opportunities within AI should not be ignored, such as improving sustainable development throughout the supply chain, which could boost spend and loyalty for activists. Over half (51 per cent) of respondents were driven by durability when choosing a brand, and, combined with classic, enduring styles (which 50 per cent are most drawn to), which prolong the life of a garment and help reduce landfill. Interestingly, activists appear to adopt a “buy less, buy better” mantra by making fewer purchases but spending more when they do. Over a quarter of activists (26 per cent) spent in excess of $5,000 on luxury fashion in the past year. Significantly, 72 per cent spent over $2,000, far exceeding the other consumer groups at 65 per cent and 67 per cent for purists and expressionists, respectively.
Nearly a third (31 per cent) of all the consumers surveyed are prepared to pay 20 per cent or more for more sustainably designed garments, with this figure rising to 36 per cent for the activist group, indicating that they are willing to spend more on brands using AI to align with their values.
Enchanting expressionists
Almost a third (31 per cent) of activists believe AI will complement the work of designers in improving design — the same number as those who think the synergy between AI and designers will lead to improved sustainability. Meanwhile, 27 per cent of the most traditional group, the purists, believe AI will enhance human creativity. However, it’s the expressionists who are willing to spend more on better design, with 72 per cent of the group being willing to pay more for the better design of a garment using generative AI.
Generative AI is not only helping with product design and textile prototyping but also has significant potential to improve brand communication. Conversational AI tools, such as Bard, offer valuable opportunities for marketers, writers, and copywriters to enhance their creativity by gaining insights, brainstorming together and collaboratively crafting compelling stories for consumers. Most of the expressionist group (82 per cent) would be willing to pay more for brands that create exciting and engaging marketing materials using generative AI, while over a third (39 per cent) of respondents are keen to see AI employed more in communicating the heritage and story of a brand.
Consumer mindsets are dynamic and subject to change based on context and circumstance. It is within this fluidity that AI emerges as a powerful ally for brands. AI’s ability to adapt to consumers’ contextual intent allows it to cater to evolving needs of all consumer types and their expectations. In turn, the adoption of AI solutions is not just a technological advancement but a strategic one too. To read the full report, download via the button below.
Source : VOGUE Business
