Editor’s Note
This article explores how AI-driven personalization is reshaping luxury marketing, moving beyond traditional appeals to craftsmanship and exclusivity. As data analytics enable hyper-personalized experiences, the fusion of digital technology and emotional engagement emerges as a critical frontier for the ultra-high-end market.
The luxury brand industry is rapidly transitioning to personalization strategies utilizing AI technology. While luxury brands in the past relied on traditional marketing emphasizing scarcity and craftsmanship, providing hyper-personalized customer experiences through AI and data analytics has now become a core competitive advantage. AI’s ability to analyze consumer behavior patterns and purchase preferences to offer tailored product recommendations and personalized brand experiences has become an essential element in the ultra-high-end market. AI-based data analytics is emerging as a crucial tool for luxury brands to maintain loyal customers, manage VIP clients, and create new digital luxury experiences.
Luxury brands are leveraging AI to provide hyper-personalized customer experiences and pursue strategies that maximize brand value.
✅ ① Providing AI Customized Services for VIP Customers
Louis Vuitton utilizes AI-based customer data analysis to offer VIP clients personalized styling recommendations and opportunities to purchase limited-edition products. AI analyzes a customer’s purchase history to curate products they are likely to prefer and automatically plans VIP invitation events. Burberry has introduced a “VIP Customer Customized AI Concierge Service” using AI, designed to automatically provide a tailored in-store experience for specific customers upon their visit.
✅ ② AI-Based Personalized Luxury Shopping Experience
Chanel offers virtual fitting services using AI and Augmented Reality (AR) technology, allowing customers to experience personalized makeup and fashion styling online. Gucci is enhancing its AI-based personalized shopping experience by analyzing customers’ social media activity and online shopping data through AI algorithms to recommend the most suitable products to individual customers. Hermès uses AI-based customer data analysis to understand what types of products specific customers prefer and provides customer-tailored emails and personalized brand messages.
✅ ③ Digital Asset Marketing Combining AI and NFTs (Non-Fungible Tokens)
Luxury brands are launching new forms of digital limited editions combining AI and NFTs, actively targeting MZ-generation VIP customers. Dolce & Gabbana has released an NFT-based limited collection using AI, allowing only NFT purchasers to buy specific fashion items in reality. Tiffany & Co. offers a customized service called ‘NFT Jewelry Customization,’ combining blockchain technology and AI to create actual jewelry based on specific NFTs (e.g., CryptoPunks) owned by customers.
Luxury brands are gaining a more sophisticated understanding of consumer purchase patterns through AI and big data analytics.
✅ ① AI-Based Hyper-Personalized Marketing Strategy
AI analyzes customers’ preferred brands, styles, colors, and price ranges to enable perfect tailored product recommendations. For example, the LVMH group uses AI-driven hyper-personalized marketing to analyze customers’ past purchase history and online search patterns, providing individualized advertising and product recommendations based on that data.
✅ ② How AI Predicts and Retains VIP Customers
AI can analyze customer data to predict in advance which specific customers are highly likely to become VIPs. For instance, the Richemont group uses AI to analyze specific customers’ luxury watch purchase patterns and offers tailored luxury services and exclusive promotions to customers with high VIP potential. AI also plays a role in preemptively detecting potential brand defection among VIP customers and automatically providing customized benefits to enhance brand loyalty.
✅ ③ AI Provides a Hybrid Customer Experience Connecting Online and Offline
AI connects products a customer has shown interest in online to an optimized shopping experience in offline stores. For example, Rolex operates a service where, based on AI analysis, a specific watch model a customer showed interest in online is automatically prepared for their store visit, accompanied by personalized consulting. Montblanc operates a data-driven customer management system where AI ensures a consistent customer experience across online and offline channels.
Korean luxury brands and premium consumer goods companies must also hasten their AI-based marketing innovation. However, the current Korean luxury industry lags behind global brands in AI utilization. Domestic brands are not actively leveraging AI-based hyper-personalized marketing, and their VIP customer management systems are relatively less sophisticated compared to global brands. Domestic luxury distributors tend to rely more on traditional offline store-centric VIP management rather than AI-based data analysis. Strengthening AI-based customer data analysis and providing tailored luxury experiences is essential to avoid falling behind in competition with global brands.
For luxury brands, providing customized customer experiences using AI has now become a core competitive advantage, alongside scarcity and craftsmanship.
✔️ Providing VIP customer customized services using AI
✔️ Enhancing hyper-personalized product recommendations and hybrid shopping experiences
✔️ Introducing innovative brand strategies combining AI with digital asset technologies like NFTs and blockchain
AI is establishing itself as a new game-changer in the luxury brand market, and success in the global luxury market will depend on how effectively AI technology is utilized.
It is time for Korean luxury brands to also hasten their innovation in AI-based customized services.