Bain – Luxury and Technology, 2023

The luxury sector has seen a rapid adoption of new technologies, particularly radio frequency identification and artificial intelligence, as well as experiments with customer engagement through augmented or virtual reality and NFTs. The use of generative artificial intelligence is also showing great promise for the industry. The connection between new technologies and sustainable development is becoming more apparent for luxury goods makers. Post-Covid, the boutique has become a vital part of a Maison's identity, offering not just a place to make purchases but also a human and emotional experience that immerses customers in the brand's universe. The boutique now needs to be fully integrated into an omnichannel customer journey. Technology plays a crucial role in boutiques, serving three main objectives: strengthening the relationship between customers and sales associates, enhancing the discovery of collections and the brand's universe, and streamlining the customer journey and operations. A majority of luxury customers are open to technological use cases in boutiques, as long as they meet the high standards of the sector. The first application of technology in boutiques is focused on deepening the relationship between customers and sales associates, with tools that enable personalized recommendations based on customer data. The second area where technology can be applied is in improving the flow of the in-store journey, such as enhancing the payment process or tracking products in the boutique. Luxury Maisons are also testing use cases aimed at enriching their storytelling through augmented reality, virtual reality, and connected mirrors, to bring collections to life and immerse customers in the brand's universe and heritage. Lastly, new technologies are being adopted in order to improve operations, such as optimizing boutique-specific assortment selection, stock allocation, and inventory automation. However, there is still ample room for development in the use of new technologies in luxury boutiques. This will require a transformation of the Maisons, including changes in culture, technological architecture, and boutique layout and organization.