The luxury industry used to be accustomed to operating in its own insular bubble.  Its headquarters sat in the fashion capitals of the world.  Its products were exclusive, trend-setting, and boasted a level of craftsmanship the mass market could never hope to match.  And its business model was steeped in tradition, with a lot of luxury houses keeping technology at arm’s length rather than risk disrupting their unique recipe.

But times have changed.  Over the last two decades, the luxury sector – across apparel, footwear, and accessories – has reinvented itself, and the most forward-thinking houses and brands have taken technology to heart as a way of reducing cost and remaining competitive.  These days the luxury sector is being squeezed from two sides: fast fashion companies are now creating high-end products, and new, digital-native luxury brands have entered the market, reshaping the level of engagement and service that customers expect from a luxury brand.

Luxury is also not immune to the pressures that have forced high street brands and retailers to get smart about technology.  In the broader retail market, strategic investments in technology have in a very real sense separated the winners from the losers.  It doesn’t take much investigation to see that the kinds of household names that have recently fallen on hard times have several things in common; they’ve left it too late to turn technology to their advantage.  In several cases, I have even been asked for advice only for the same companies not to act on it; the old saying is still true, “you can lead the horse to water, but you can’t make them drink”.

But where mass market brands have made carefully considered – or even bolder, riskier – investment in technology, they have usually been successful at not only becoming more efficient, but also overhauling their business models and even inventing new ones.  With the help of technology, these companies have moved into new international markets, created new brands, and boosted their profitability.  And what’s even more important: some of them have also been able to take that technology upstream, gaining new insights into their sourcing, manufacturing, and logistics processes, and forging new connections between that world and the infinite cycle of product design and development.

Probably the most visible example of technology-driven change in the open retail market, though, is the rise of brands who have pushed the envelope of traditional bricks-and-mortar and established new direct-to-consumer channels to compete against marketplaces like Amazon, Not Just A Label, Nineteenth Amendment, and FarFetch and many other new platforms.

And while it was the mass market – particularly the fast fashion segment – that made a frictionless, instant, cross-channel experience the new standard, luxury customers now expect the same… and more.  Not only is it easier than ever for discerning shoppers to instantly compare products, but every brand – high end or low – is in constant competition for their share of target customers’ attention, and as the baseline for consumer-to-brand interaction has been raised in the mass market, the same bar has risen even higher for luxury.  In every way that matters, luxury brands need to be on top of their game around the clock – something that’s all but impossible to deliver in the modern world without technology.

Beyond the buying experience, digital-native brands have also redefined the seasonal calendar.  Originally a creation of couturiers, the spring/summer and autumn/winter seasons had shaped the way fashion was developed, marketed, and sold for more than a century, before brands like Zara and Supreme – completely reset the seasonal calendar with the latter specialising in scarce, seasonless “drops” – revolutionising the frequency with which even expensive, sought-after fashions were introduced.

Again, luxury has found itself needing to respond to a complete transformation of the market – and then to layer its own edge of exclusivity on top.  So while Zara and its ilk traded on sheer speed and variety, luxury fashion house Louis Vuitton collaborated on capsule collections with Supreme and other seasonless designer brands who have similarly unique, immediate business models.

And the next frontier of technology-led retail innovation is likely just around the corner.  The industry may be getting tired of writers and analysts pointing to Amazon as a disruptor, but it remains true; today Amazon is exploring rapid turnaround and delivery of personalised garments, using a host of different technologies.  Shoppers today can select plain T-Shirts , choose material composition, style, fit and then select a wide choice of graphic prints. Amazon then uses its ecommerce engine to share the same customer-specific design details with one of its strategically placed printing partners, using its wholly-owned eCommerce platform.  This allows the printer to respond very quickly, selecting and printing the T-Shirt, together with its unique details, using smart RFID chips incorporated to set parameters within the printer, and then packing and distributing.

That entire end-to-end process can be completed in 72 hours, and should serve as an example of how smart, early investments in new technologies (in this case for Direct-To-Garment printing and tracking) can forge new connections in the fashion value chain and power entirely new ways of reaching the market.

But as important as new paradigms of agile manufacturing are, arguably the biggest single building block in the future of technology for luxury is Artificial Intelligence, or AI.  Today, AI, machine learning, and even robotics (which does employ machine learning, but for the purposes of fashion is mainly about automating repetitive tasks) are often bundled together, although technical machine learning is just one focus area underneath the AI umbrella.

In practice, though, machine learning presents the fashion industry with its next potential revolution: a way to identify and understand patterns in data and to either make recommendations or take self-directed action.  One example of AI in use would be a brand using a machine learning model to create new style options using a graphical library of silhouettes and garment parts. Another use-case could be the development of multiple colourways of materials or garments from a single starting point, allowing designers to request a large number of automated options and then selecting a small sample that can be used to start the design and range-building process. 

Today, brands use a multitude of service providers and platforms, along with business intelligence tools, to understand their target markets.  Whether they actively use the information or not, most brands and retailers are already collecting customer datapoints such as location, gender, age, income,  household size, number of clothing items purchased, likes, dislikes, and amount of money spent on products and much more linked to our digital footprints.  

So if there is one thing fashion brands and retailers are not short on, it’s data.  Today, fashion businesses generate mammoth amounts of data ever second of every day – and what was once a pool of data quickly became a lake, then a sea.  These days it might be more accurate to call the kinds of historical data repositories that brands and retailers hold Data Oceans. Hidden under those oceans are the kinds of insights that, if properly extracted and understood, can be used to inform the development of new products, new retail experiences, new market segments, new materials, upselling opportunities and much more.

It will come as no surprise, then, that the same companies that acted quickly in establishing themselves in fast fashion or agile manufacturing are already making use of customer and market data on a massive scale.  Companies like Zalando are using AI and machine learning to help its customers to make better choices for product selections, using a recommendation tool that works off the customer’s previous cross-channel engagement – in store, online, and across social media.  Visual search is also another example of machine learning put into action in fashion, allowing customers to find fashion products in online magazines or on their social media channels and then use visual search engines to identify the products – or the closest analogues – and suggest places to purchase.

I believe AI offers luxury companies a new competitive edge that mass market brands and retailers will struggle to replicate, especially when your customers are using luxury’s unique platforms rather than sharing this data with third parties that have become the new competition.  While AI can be used anywhere to take over analytical work and repetitive tasks on a scale humans cannot manage, applying it in luxury – where invention craftsmanship are what defines the most prestigious names – will allow brands and fashion houses to become more creative than ever, safeguarding their role as tastemakers.

Luxury has already gone digital.  The next stage of its evolution should be to work smarter, and to secure its future as the brightest light in fashion.

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