Why the future of luxury fashion is tech

Technology has gone from threat to friend in the world of luxury fashion as creatives shift priorities, says Gaynelle Brautigam, head of innovation, tactical.

Luxury fashion is at a crossroads. Too many new products and directions are diluting what made luxury special in the first place. Reports show that just in the first half of 2024, the luxury goods market saw a decline of 1-3% and brands are now being forced to "rethink" their value propositions.

Today, there is a distinct return to heritage pieces of the past as consumers go in search of meaning and connection. This isn't just a temporary downturn – it signals a fundamental shift in what luxury buyers want.

Understanding what customers want

Technology, once viewed as a potential threat to luxury’s time-honoured techniques, is now becoming a powerful means of elevating it. The single biggest way it is doing that is by filling in the gaps that consumers are now facing in the luxury industry, namely: impactful experiences, better traceability and transparency, and richer, more emotive storytelling.

It is also clear that priorities surrounding fashion (including luxury fashion) are steadily shifting. Globally, 56% of millennials and Gen Z claim that “prioritising experiences over material possessions is important to their personal life.” If the centennials – the most technologically advanced and fashionable generation – are developing a disillusionment with luxury goods, then something needs to change. Brands today have two options: adapt or be left behind.

The answer? Utilising innovative tech in fashion.

What role can immersive tech play in luxury fashion?

Extended Reality (XR) revolutionises the way we experience the world – why should luxury fashion miss out?

Create powerful experiences

Luxury has always been about emotion and experience, rather than the product itself. For many, owning a luxury piece is about aspiration, a symbol of a better life; an experience more than anything.

Harnessing XR in luxury fashion helps bring users closer to the action to forge a sense of connection with the brand/creative process. Earlier, luxury labels used to cultivate exclusivity by offering front-row runway access to celebrities and style icons. Now, XR takes this one step further by creating immersive experiences that rival the thrill of physical fashion events.

XR is also responsible for creating Multisensory Immersions that make the brand experience more lasting. A fantastic example is LVMH’s Virtual Reality (VR) experience that combines your aural, visual, and olfactory senses. Another masterclass in this is Dior’s 'Ball of Dreams', a spectacular multisensory VR cinema experience hosted in Harrods Knightsbridge, giving users a chance to explore some of Dior's iconic fragrances and products.

Bridge physical and digital realms

XR can also create virtual stores that simulate shopping experiences unbound by physical limitations – like Ralph Lauren's virtual store that opened up to a big reception online. Sitting where you are right now, you can ‘visit’ one of the biggest luxury brand’s flagship stores in Beverly Hills, USA. Isn’t that unbelievable?

Brands also use Augmented Reality (AR) pop-ups that add digital elements to physical spaces. To promote the launch of its Olympia bag, Burberry's Harrods installation hid the statue of the Greek God Elpis in locations that can only be revealed through your phone by scanning the QR codes put up (much like the concept of Pokémon GO).

Revolutionising design and commerce

“AI enters this world not as a disruptor, but as an enhancer of creativity and precision.” (Forbes, Neil Sahota, 15 March 2024). It enhances the luxury fashion industry by combining technology with human creativity. AI can help find crucial insights in vast sets of data; think consumer needs, optimising supply chain or solving sustainability challenges for both brands and shoppers.

Brands like Chatlabs and Creatify prove that AI can transform social media videos into shoppable ads, increasing their commercial value. It also enables virtual try-ons, allowing customers to see how clothes fit without physically trying them on.

Many new AI apps can now help digitise wardrobes, assisting users in deriving inspiration from items they already own. These apps also influence buying behaviour by reducing the likelihood of returns and regretful purchases. Additionally, AI helps protect brand authenticity by verifying genuine products. There are many AI startups that are now specialising in creating listings for exclusively vintage products. This ability of AI to create powerful automation in terms of workflows is perhaps just as important as its creative side.

There is an increasing fatigue observed in the luxury space that is reflected in consumer behaviour right now. It's clear that what consumers want is not more products but narratives and stories crafted around them. For luxury and fashion companies, the biggest challenge is connecting the dots between Consumer, Data, Technology (AI) and Emotional Experience.

At its core, luxury fashion's relationship with technology is about reconnecting with consumers in an increasingly distracted world, making customers feel like they’re part of something bigger than themselves or just the product.