Artificial Intelligence and Fashion & Luxury Companies

Explore how artificial intelligence is transforming the fashion and luxury industry, from generative design and personalized shopping to compliance with the EU AI Act and Italian AI Law. Learn about key applications, legal challenges, and strategies for responsible AI adoption.

By Laura Zolla, Pietro Minaudo, Marta Margiocco, Edoardo D'lppolito

1. In which business functions is artificial intelligence predominantly applied in this sector?

The use of artificial intelligence systems by fashion and luxury companies is already widespread and is expected to grow at an extremely rapid pace.

One of the main areas of application of artificial intelligence is design. Through generative AI systems, it is possible to create virtual prototypes of garments, allowing designers to explore an almost infinite number of combinations of shapes, colours and fabrics. This approach makes it possible to start from a digital base in order to customise and experiment, generating entire digital collections and significantly shortening development times. AI does not reduce creativity; on the contrary, it offers designers a potentially infinite palette on which to intervene, and allows them to analyse emerging trends, anticipating consumer preferences and driving the creation of collections more closely aligned with actual market demand.

"In product development, artificial intelligence supports digital prototyping, reducing the need for physical samples and facilitating the simulation of fit, performance and material behaviour. It also enables better alignment between design, merchandising and production, optimising costs, timing and overall product quality."

In product development, artificial intelligence supports digital prototyping, reducing the need for physical samples and facilitating the simulation of fit, performance and material behaviour. It also enables better alignment between design, merchandising and production, optimising costs, timing and overall product quality.

The supply chain also benefits from AI. Accurate demand forecasting represents a strategic challenge for fashion and luxury companies, and AI-based predictive models make it possible to estimate required volumes more precisely. This enables companies to optimise production, reduce unsold inventory, improve logistics planning and manage inventories more effectively, while at the same time increasing the sustainability of the entire product life cycle.

With regard to the personalisation of the shopping experience, algorithms that analyse large volumes of data relating to consumer behaviour, individual preferences and customer feedback make it possible to offer highly personalised products and recommendations. Virtual assistants and recommendation systems enable a level of personalisation that increases customer satisfaction, strengthens loyalty and consolidates the relationship with the brand.

In communication and digital marketing, AI enables the generation of tailor-made content, the localisation of messages for different markets and the monitoring of trends and sentiment. Tools such as intelligent chatbots provide immediate assistance, respond to frequently asked questions and guide customers through the purchasing process, improving the customer experience. At the same time, AI-based virtual influencers represent a growing phenomenon, capable of conveying innovative brand identities and attracting diversified audiences, particularly younger and more digital generations.

AI is also applied in human resources, supporting skills assessment and the automation of administrative processes. AI-based e-learning platforms make it possible to deliver personalised training programmes, responding to employees’ specific professional development needs and improving workforce planning strategies in compliance with the GDPR and the AI Act.

In sales and retail operations, AI helps optimise assortments, demand forecasting and dynamic pricing strategies, while in-store analytics tools and clienteling systems suggest targeted products, increasing conversion rates and customer loyalty.

In particular, visual merchandising benefits from 3D simulation of store layouts and window displays, allowing the testing of alternative configurations and the personalisation of digital content, accelerating decision-making and improving the customer’s visual experience.

In merchandising, AI analyses sales, trends and consumer behaviour in order to optimise purchasing strategies, assortments and pricing. This ensures greater consistency between supply and demand, improving performance and reducing excess stock.

Customer service and after-sales operations are also transformed by AI, which handles requests via chatbots, automates returns and complaints, and analyses customer sentiment. This ensures fast and personalised responses, allowing teams to focus on more complex cases.

In the field of finance and controlling, AI improves cash flow forecasting, budgeting and the detection of anomalies or fraud, supporting more accurate decisions and proactive cash flow management.

In IT and cybersecurity, AI detects cyber threats, anomalies and intrusion attempts, automates internal ticket management and strengthens the protection of sensitive data, including that of top clients.

Legal, compliance and intellectual property teams use AI to facilitate contract review and classification, supplier due diligence and verification of regulatory requirements, including those under the AI Act. Intelligent systems also support the monitoring of online intellectual property infringements and the assessment of risks related to technologies and suppliers.

In ESG functions, AI makes it possible to track materials and processes across the entire supply chain, calculate environmental impact and identify areas for energy efficiency improvement. It supports efforts to combat greenwashing by providing data-driven assessments of processes, communications and environmental performance.

Finally, in the areas of sustainability, quality and logistics, AI tracks materials and processes along the entire supply chain, calculates environmental impact, identifies energy optimisation opportunities and reduces waste through computer vision systems. In logistics and retail distribution, AI optimises delivery routes, reduces transport times and predicts stock-outs, while integration with robotics and computer vision increases accuracy, speed and safety in operations.

In light of the above, it is imperative to be aware of and comply with the regulatory framework on artificial intelligence, set at European level by Regulation (EU) 2024/1689 (AI Act), which entered into force on 1 August 2024, and at national level by the very recent Law No. 132/2025, which entered into force on 10 October 2025. These should not be regarded as barriers to innovation, but rather as an invitation to develop and use AI systems more appropriately. Those who embrace this approach will be able to transform compliance into a competitive advantage.