As the luxury market faces challenges of slowing growth, LVMH is turning its attention to artificial intelligence (AI) technology in an effort to enhance operational efficiency and customer retention. The group, which owns renowned luxury brands such as Tiffany, Dior, and Celine, recently revealed that AI will play a crucial role in their response to market changes.
Over the past four years, LVMH has collaborated with Google Cloud to build a centralized data platform that consolidates data from its 75 brands. They are now applying predictive AI, generative AI, and intelligent agents across various areas, including supply chain planning, pricing, product design, marketing, and personalized experiences. The goal is to maintain and expand market share in the increasingly competitive environment.
"The market is becoming more challenging for everyone," said Franck Le Moal, IT and technology director at LVMH. Due to widespread price increases of 20% to 30% during the pandemic, consumer purchasing power has been affected, leading to declining consumer confidence in the U.S. and China markets for LVMH. This change has particularly impacted the company's fashion and leather goods division, which saw a decline in sales last year—a notable shift in an industry accustomed to constant growth.
Although LVMH acknowledges that the market is normalizing, they believe that the appeal of their brands remains strong. The company stated that while technology cannot solve all problems, it can provide robust support in addressing challenges. Carrie Tharp, vice president of global solutions and industries at Google Cloud, noted, "We see AI and intelligent agents bringing opportunities for consumer goods businesses during tough times."
LVMH's AI agents are helping them retain and expand their customer base. For instance, at Tiffany, sales consultants can summarize interactions with customers through intelligent agents and generate personalized follow-up messages. Meanwhile, LVMH has also adopted Google’s search products in e-commerce to improve customer search experience and conversion rates on their websites.
In addition, AI is reshaping LVMH's internal operations by optimizing pricing strategies and enhancing the responsiveness of supply chain management. In creative aspects, design teams use generative AI to create mood boards, while marketing departments leverage this technology to generate more personalized e-commerce copywriting.
LVMH has also launched a company-wide generative AI agent named MaIA, which handles over two million requests per month and serves approximately 40,000 employees. "Our investment in technology is significant," said Le Moal, "and it is essential for improving efficiency, maintaining the spirit of luxury, and delivering the best possible luxury experience."