The impact of generative AI on customer loyalty in the luxury industry

: personalization and technology acceptance

Abstract

The luxury industry is currently experiencing significant transformation led by digital technologies such as Generative Artificial Intelligence. The latter potentially revolutionises the interaction with customers as well as their experience. This technology might serve as an answer to the increasing demand for more personalised marketing campaigns and experiences in addition to exclusive products. Maintaining a high standard and an even higher degree of exclusivity is critical for luxury brands and can be further enhanced by offering personalised experiences with help of Generative AI. This thesis explores the impact of Generative AI on customer loyalty in the luxury industry by focusing on personalisation and technological acceptance. Integrating a literature review with a quantitative survey, and qualitative expert interviews, this research examines how experiential value, technology acceptability, and the diffusion of innovation influence the adoption of Generative AI personalisation among luxury consumers. Key findings indicate that Generative AI significantly enhances customer satisfaction and loyalty by offering tailored and emotionally engaging experiences. However, balancing AI-driven personalisation with the preservation of the human touch is essential to uphold the luxury brand's heritage and exclusivity. Furthermore, the analysis highlights that, while luxury businesses are still in the early stages of incorporating Generative AI, there is rising awareness of its potential to transform the industry.

Date of Award	24 Jun 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Peter V. Rajsingh (Supervisor)