Has AI Ushered the Retail Online Transition?

Has AI Ushered the Retail Online Transition?

By Retail CIO Outlook | Wednesday, October 16, 2019

Beating every growing influence of social media and mobile commerce, AI in the luxury retail world is gradually becoming a valuable discovery for online millennium consumers.

FREMONT, CA: Advancements of technology and digital developments are fundamentally renovating the luxury retail industry. The e-commerce model, direct-to-consumer (DTC), has been increasingly reshaping the shopping landscape by giving opportunities to the new entrants to achieve market shares. The online retailers who are newly embracing the appropriate AI application for their businesses are witnessing high sales growth and high customer loyalty.

With these developments, the expectations of affluent consumers are equally evolving. The customers expect their offline and online interactions with a brand to be identical when it comes to their experience. Customers mostly do not have the endurance to go through a faulty filter and constant scanning through unrelated items to find their appropriate product.

Luxury shoppers expect a seamless and customized shopping experience. Notably, millennial consumers have higher expectations from the online platform as they begin their brand discovery experience on the internet.

Therefore, luxury brands are rapidly acknowledging the reality that surrounds them as their customers expect the faultless in-store experience to be served online as well. The deep-seated generational shift is now pressurizing the high-end brands to implement connective technologies such as AI. To accommodate the developing tastes of the customers, luxury brands are making their presence visible by implementing different levels of AI integration into their digital platforms. To keep intact the privacy regulations and concerns of the consumers, brands have taken thoughtful steps by considering the use of AI technologies.

AI allows organizations to accumulate data from a wide variety of places and applies self-improving analysis in order to take action. According to Gartner, 85 percent of customer interactions are likely to be managed by AI next year, and the approximate global AI business value might go up to $3.9 trillion in 2022. 

AI-driven personalization is ready to turn into one of the essential driving forces that can reshape the luxury e-commerce in the current time and the years to come. Nevertheless, the opportunity clings to a fair share of challenges, especially concerning user privacy.

The analysis of a large amount of data can be constructive for online retailers. Several luxury brands carry a wealth of information regarding their consumers’ behavioral habits that can be utilized to process, up-sell, and cross-sell loyal customers. It is a real challenge for the brands to make sense of every available data to produce actionable insights. 

AI is leading the way to a more customized online retail experience. In every purchase step, the human input directly is not required as they are put into places by the advanced tools.

There are innovations, which are particularly applicable to the retail brands, willing to utilize AI-powered technologies. They leverage AI to reach their targeted audiences with accuracy and provide personalized online experiences:


Chatbots are developed with the help of AI and can deliver additional support to the customer service strategy of the customers. In case the salesperson is an essential part of a luxury brand marketing strategy, AI-driven chatbots begin to manage portions of the customer service experience efficiently as well as cost-effectively. Chatbot functionalities have become common on e-commerce websites. They can answer questions 24*7 and instantly record essential customer information, understand behavior patterns, and make real-time decisions. 

Moreover, the addition of chatbots to the luxury retail industry subtly brings to conserve the service quality accustomed to affluent consumers. Businesses can connect with customers on an enormous scale and in a way that is similar to natural language. By implementing NLP into chatbots, brands can also use emoticons and GIFs to build better personal and welcoming conversation.

Machine Learning:

A division of AI is machine learning (ML), which is about providing data to machines and letting them learn from their own experiences to make accurate predictions. ML will be helpful to the luxury brands that offer highly personalized and related recommendations to every individual shopper. By combining ML and customer behavior data, companies can display different products to each user depending on their behavior on the website. Utilizing such a format parallel to the trending social media feed experience, brands can deliver a personalized online experience. 

There are new features such as “suggestions” or “for you” pop-ups that help the customers to identify their appropriate product seamlessly. It can also allow the users to access a supply of individual product cards from where they can opt to view more details. They additionally have the option to share the tab via email or social media, as well as save the product to their cart.

Image Identification:

Images are considered to be powerful tools for engagement, and humans can process pictures much faster than text. Image identification deals with the technologies that can recognize and distinguish features in images. With AI developments, the precision of image recognition has considerably improved in the past years and has, therefore, opened many doors of applications for luxury brands.

AI-powered facial recognition has changed the appearance of online luxury retail. Some well-heeled consumers allow the images of their faces to be captured so that they gain much more from their personalized experience. But necessarily, they should have the assurance that their pictures will not be used for any other purpose.

AI technology allows customers to upload their pictures and try on the cosmetics they want. It serves an experience of how they might look on them without physically wearing it at the moment. The application helps in mapping the unique facial features of every user and allows them to virtually apply different makeup combinations integrated into the brand’s inventory. Furthermore, the products can be purchased seamlessly via their mobile phones with recommendations in real-time.

Voice Search:

Voice Search utilizes AI to enable its shoppers to search for their desired products. According to multiple surveys, voice searches might turn out to be the latest trend with a usage scale of up to 50 percent in just a year. Conversational AI enables users to converse with luxury brands in a manner that is highly personalized and convenient. Voice technology and natural language recognition in AI are rapidly growing techniques, which are also pointing toward a voice-assisted shopping transition soon.

The Future:

AI is all set to prove itself as a game-changer in the luxury retail online world, where opportunities for incorporating AI into luxury e-commerce are endless. There is a massive scope for AI to be utilized as a technology that can help in personalizing every stage of the customer journey, starting from the exploration until the checkout. Customers do not feel happy to be targeted but expect to be treated, especially from their preferred brands. The retail brands are now investing in the technologies that can fetch them from the enhanced customer experience, to stay precise and relevant.

Meanwhile, brands must not forget that AI-powered technologies might get a little intimidating, and they should not be sidetracked by the overpowering hype that surrounds AI. AI is still at its infancy, and organizations are scratching the surface to find out what the technology can deliver. They are also working to adopt significant improvements and fulfill the remaining work. By completing the unfinished tasks, they will be able to predict the needs and desires of the online shoppers before they even put it into the right places in their minds.

On the other hand, AI brings the world closer, and the companies that leverage the tech today already provide an online customer experience that is entirely personalized as per the customer. The uses of different AI applications have not enforced the brands to get diverted from preserving their integrity and loyalty.

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