Are Luxury Retailers Giving Online Customers a Thrift Store Experience?

What separates luxury retailers from the pack? Is it the products they sell? The quality of the materials? Careful, elegant design? The clientele? The in-store experience? The customer service?

Chances are, you're nodding along with all of those options. That's because a luxury brand is about far more than just its products. A nice, pithy definition comes to us from Michel Chevalier and Gérald Mazzalovo in the book "Luxury Brand Management": "A luxury brand is a selective and exclusive one … [it has] the desirable attributes of being scarce, sophisticated and in good taste. It also has a slightly understated and aristocratic dimension."

For luxury brands, this feeling of exclusivity and sophistication is really important. In fact, it's that feeling that matters. A brand can be scarce and refined, but if consumers don't believe it, the brand won't have that luxury cachet. And that cachet can mean a whole lot. It can mean attracting the best designers or charging top dollar for the finest products or finding some of the most desirable shoppers on the planet.

However, this idea of "luxury" is a lot easier to exude at a physical, brick-and-mortar store than an e-commerce website. In fact, the problem for a lot of luxury brands is their online presence. High concept product videos and sleek iconography often mask the fact that luxury brand sites aren't much different than any e-commerce site on the web. The personal touch, sophistication and unique qualities that separate great luxury brands are replaced with the sort of product search and discovery that leaves shoppers feeling like they're interacting with a spreadsheet or database. In fact, some luxury sites even employ the most agitating aspects of site design — things like pop-up modals and auto-play videos.

And while other brand sites can be content with similar experiences, for luxury brands, it really is all about standing out. To do that, these brands need to stop aping run-of-the-mill e-tail portals and embracing technologies that deliver on the promises of luxury. They need to embrace artificial intelligence (AI).

Now, when they think of AI, a lot of retailers think about streamlining manufacturing and logistics, or about chatbots. That's not the kind of AI I'm talking about here. Instead, I'm talking about AI that can react to unique shoppers, in the moment, to provide luxury experiences. It means AI that learns about every customer, figures out his or her sense of style, and anticipates their needs. It means a luxury experience, online.

Imagine a user hitting the homepage of a luxury handbag site. Every action she takes from her arrival to check out will train the AI not about user behavior, but about this user's behavior. So when she clicks on that first bag, your site knows a little bit about what she's interested in. Luxury sites know this without AI, of course, and they have this data (they don't act on it in real time, sure) but that's not what's interesting. What's interesting is that every subsequent action trains the AI about what she likes so the AI can adapt, on the fly, to present products that fit her unique needs and sense of style. Here's how it works:

Say she likes the bag but gets enticed by a related product below the fold. She clicks on that. Now the AI knows two products she's interested in and starts intuiting things about her behavior. For example, what makes these products actually similar? Is it the fabric? The color? Something more subtle, like the opacity of the logo or the size of the buckle on the strap? AI can look not just at product tags and metadata but — and this is important — the images themselves. It can understand those product images at a granular level and make connections between them.

In just a few clicks, AI actually knows what the consumer wants and what her style is. And, much like would happen at an in-store visit, the AI reacts to her the way a professional sales associate would. It starts guessing what she likes — and not just what's popular or what the last two customers thought looked good or what's on sale. The AI gets her.

Now, say that on every bag that customer is particularly interested in the fabric or the narrow side of the bag. She hovers over, spends time reading and clicking through options. The AI can learn this too, choosing to display a certain angle or discrete information about the aspects of the bag she's really interested in as she browses. That's like an in-store associate noticing a customer running her fingers over the leather and finding bags that look and feel the same. Except it's not a sales associate that's been selling those bags for years leading them through this journey — it's AI.

What you're looking at are luxury sites that evolve to individual users in real time, sites that functionally sell to every user uniquely, not all shoppers generally. Instead of a user interacting with a spreadsheet, they get a dynamic, conversational, bespoke experience, tailored to the brand's look, feel and products. They get a luxury experience online that endears them to a brand, one that evidences the brand cares about them more than their money. It cares about their experience and their satisfaction.

This kind of AI isn't some pie-in-the-sky fantasy. In fact, it exists here and now. And as more and more sites take advantage of it, those luxury sites that choose to keep giving their customers a thrift store experience will find themselves having more and more trouble being considered luxury in the first place.

Andy Narayanan is the vice president of intelligent commerce at Sentient Technologies, a provider of artificial intelligence software to transform how businesses tackle their most complex, mission-critical problems.