This article is part of the Vogue Business Index: H1 2025, an bi-annual objective scorecard of the 60 top luxury fashion brands, based on revenue. Advanced Members can read the full Vogue Business Index here.
Innovation can be characterised by the consumer need for newness and utility. As the pillar that’s most susceptible to change, it is undeniable that even since the last Vogue Business Index in H2 2024, the hype cycle has roared on, ushering in — and out — some of the technologies that are key to luxury’s survival. From the continued wane of NFTs and the rise of digital twins, to the influx of digital product passports (DPPs) and the climbing industry demand for transparency, it is vital for brands to continuously recalibrate their innovation strategies to stay relevant, especially as legislation looms.
During our data capture period for H1 2025, artificial intelligence was front of mind for consumers. And alongside struggling to prioritise innovation within tightened budgets, Index brands are grappling with how to ethically adopt and apply AI to their practices, too.
Innovation movers
In this chapter, we dive into the innovations of Index brands, from their involvement in circular solutions such as rental and resale to their presence in gaming. Research is conducted via an audit of their long-term and point-in-time (past year) activations, with individual metrics weighted to consumer importance.
Following movements among the top players in the last edition of the Vogue Business Index, shuffles in the innovation pillar continue, albeit more drastic. Gucci, which has held the top spot in innovation since its addition in H1 2022, drops for the first time in three years to third place, as Balenciaga (+5) and Burberry (+10) overtake.
Balenciaga now follows in the footsteps of its sister brand Gucci in leading the way when it comes to innovation. As a pioneer of cryptocurrency payments, which it rolled out across limited boutiques in May 2022, Balenciaga has long innovated in interesting and unique ways, most recently launching its virtual runway for the Apple Vision Pro and collaborating with the Need For Speed mobile game to target a localised crowd. What sets Balenciaga apart from other luxury brands is the way it leans into innovation through subculture — something that ties into the brand’s inherent values of creativity and subverting the status quo. Balenciaga Music, for example, launched in May 2024, is a platform that aligns subculture with innovation, through curated playlists and NFC-chipped garments that offer exclusive access to tunes once scanned.
An early adopter of all forms of innovation, Gucci has previously led in areas such as gaming, NFTs and resale, through its own initiatives and collaborations. As Gucci adopts a back-to-basics approach — first witnessed under the appointment of Sabato De Sarno in January 2023, and his more minimal approach to design — innovation has been somewhat scaled back. Gucci Arcade, first launched in 2019, has quietly been removed from the brand’s website navigation, with games including Gucci Gravity and Gucci Labyrinth no longer accessible. While Gucci-themed virtual world Gucci Town on gaming platform Roblox remains ongoing, activations within the space have stalled following the maison’s Spring/Summer 2024 Ancora show.
Gaming isn’t the only area where Gucci is scaling back investment. Just one year after launching its proprietary resale platform Gucci Vintage, the secondhand offering has quietly shuttered alongside two other brand-led platforms: Hugo Boss Pre-Loved and Valentino Vintage. Now, just nine brands directly operate their resale platforms or white label solutions — down from a peak of 13 brands in the H1 2024 Vogue Business Index — and a further eight brands have partnerships with external resale platforms. While operational challenges and competition from third-party platforms such as Vestiaire Collective and Vinted pose clear barriers for brand-owned resale, there are risks for those who abstain entirely from circular revenue streams.
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Consumers themselves care about brands’ resale capabilities. Fifty-three per cent of luxury consumers are interested in brand-operated resale, which is up from 45 per cent in H1 2022 (when innovation was first tracked). As brands continue to face creative uncertainty in an era of leadership shake-ups, a label’s curation of archival fashion may create unity through its own history. As it stands, consumer interest in vintage does not directly result in revenue for brands, but it does generate returns for the external platforms hosting the pieces, with Vinted revenues, for example, up 61 per cent year-on-year in 2023.
Fashion’s AI conundrum
AI has long played a central role in fashion, facilitating everything from product recommendations and trend forecasting to inventory management. As generative AI becomes increasingly advanced and accessible, the possibilities of its application span clienteling to storytelling to operations. For brands, this creates a conundrum of knowing where is best to invest.
Clienteling can be considered the most established use of generative AI. While chatbots are the most notable form, brands and consumers alike are moving away from the tool towards more advanced options. Fifty-eight per cent of brands offered a chatbot or live chat function in the Vogue Business H1 2024 Index. While this rose to 67 per cent a year later, the number of AI-driven chatbots remains the same at 13 per cent; consumer interest for these tools has also remained stable during the same period, as more consumers want multiple channels of customer service and to speak directly to a brand advisor (both up 2 per cent). It’s become clear that clienteling tools work best when used to empower sales associates in delivering strong customer service — rather than in the hands of consumers themselves. Dior, for instance, exhibited its Astra tool at annual tech conference VivaTech in June 2024, which pulls customer data from various channels, including reviews and live-shopping sessions, to create a cohesive customer profile from which sales assistants can build on.
In China, AI clienteling looks a little different. E-commerce giant JD.com announced the second wave of its Spring Dawn initiative in March 2024, intended to boost the revenues of its merchants. This included an AI assistant for store launches, AI content creation and a live-stream service hosted by its own robot — the latter of which was utilised by Coach during a Lunar New Year live stream. While the rise of AI hosts may foster a sense of uneasiness in many consumers — see: the ‘uncanny valley’ effect — Coach reportedly saw a tenfold increase in conversions over the course of its live stream.
Communication is another area that may benefit from the increased use of AI. For consumers, quality of product (34 per cent) and brand values (15 per cent) rank as the two biggest luxury purchase influences, meaning the communication of these factors is essential. Brunello Cucinelli recently adopted AI for its brand storytelling, utilising a ChatGPT-like function on its new website, which launched in July 2024. Fuelled by brand information, ranging from heritage and product design to philosophy and morals, consumers are able to ask Solomei AI anything, offering a sense of complete transparency while easing research pathways. Not only is it unique for a luxury brand to place AI front and centre of its e-commerce experience, but it’s also the ideal vehicle for delivering the information customers directly seek; brands’ own websites emerged as the most likely place for consumers to look for information about brands prior to purchase (48 per cent).
AI as a tool for product creation and design is a trickier nut to crack. Cult New York label Collina Strada fed all of its prior collections into an AI engine as a starting point for SS24. The tech generated a host of design concepts, which then informed the collection’s final pieces. While well received at the time, when AI was employed to generate two sets of prints for a Baggu collaboration in June 2024, Collina Strada came under fire for its lack of transparency, as well as the environmental and ethical risks that arrive with using the tech. This speaks to wider consumer attitudes towards the use of AI within the creative process. While transparency of use is the first step to gaining wider acceptance, the legal infrastructure is still evolving, so brands must ensure they meet the ethical expectations of consumers and build in regulatory compliance among their approaches to AI pre-emptively to avoid being caught out when legislation lands.
AI regulation differs by market, making it complex for companies aiming to standardise processes. The EU’s AI Act states that AI should be overseen by people, while remaining safe, transparent, traceable, non-discriminatory and environmentally friendly. In China, the Generative AI Measures issued in July 2023 include legal requirements around privacy during AI training; it’s much more focused on innovation than the AI Act, however, declaring its active support of independent innovation. Meanwhile, in the US, AI is being deregulated, as well as funded, with a $500 billion investment in AI infrastructure. For global companies looking to err on the side of caution, creating a standardised framework could ensure compliance across markets, while establishing themselves as leaders in ethical AI use.
Gamification scales down, digital fashion heats up
In the H2 2024 Vogue Business Index, signs of a slowing innovation landscape were clear. Of the metrics tracked, just one — traceability — witnessed growth. Understandably, as luxury margins tightened, more expensive investments were placed on the back-burner, with brands now interested in using technology to increase efficiency and comply with changing regulation. This edition paints a picture of renewed enthusiasm for innovation, as most metrics gain ground.
The proportion of Index brands involved in traceability innovation increased to 69 per cent this edition, up from 53 per cent in H1 2024. Legislation is the biggest driver: the EU is looking to finalise its DPP standards this year, with mandatory implementation beginning in 2027. As a result, luxury is looking to get ahead, as brands like Chloé and Coach seek to drive consumer appeal across the resale market via enlisting the tech. The space is still developing, though. In December 2024, the global NFC Forum launched its proof-of-concept mobile reader, allowing users to access NFC-enabled DPPs easily through their mobiles. Brands already involved in DPPs should keep up to date with emerging technologies to ensure they’re at the forefront of accessibility and ease of use for their consumers.
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Gamification is another area witnessing a mild resurgence. Twenty-two per cent of brands now offer gamified experiences (up 2 per cent in the past six months), while another 22 per cent have collaborated with external gaming developers (up 5 per cent in the past six months). Louis Vuitton, which launched its digital community on Discord in September 2023, brings an element of exclusivity to the platform through its Enigma game, released in November 2024 to an 8,000-member audience. Jacquemus and Ami Paris, meanwhile, have both opted for IRL gamification through a bingo night (December 2024) and a New York treasure hunt (February 2024), respectively. While investment in large-scale gamification through the likes of Roblox and Zepeto may have slowed down for brands, there remains value in smaller scale community-building games. Ultimately, these activities serve to create positive, brand-centric experiences that place luxury labels front of mind for consumers beyond the product or store.
Elsewhere, in digital fashion, 47 per cent of brands offer augmented reality or virtual reality features, as innovation heats up. Versace launched its digital Tag bag across Snapchat, Drest and Zepeto in December 2024, while in November 2024, Burberry released AR try-on for its signature scarves. Beyond Index brands, AI and AR technology company Perfect Corp acquired Farfetch’s virtual try-on solution, Wannaby, in December 2024. With the agreement that Farfetch will continue to use the technology on its site, the acquisition marks a strategic shift for Perfect Corp as it hones in on fashion.
Jacquemus — a proponent of digitally driven, high-profile marketing campaigns — collaborated with Apple on marketing its latest men’s collection in January 2025. While not strictly a digital fashion campaign, the collaboration speaks to the continued crossover between technology and fashion in the showing of designs. For brands, this type of investment in digitising or visualising fashion could assist other areas such as experiential marketing, sales and in-store inventory optimisation. Rather than investing in tech for the sake of tech, brands should carefully consider how they adopt these tools to achieve wider strategic goals and improve operational needs.
Case study: Burberry rediscovers its heritage through AI
It is fair to say Burberry has undergone a refresh since hiring chief creative officer Daniel Lee in September 2022. Ushering in a new era for the brand, Lee’s appointment saw the British heritage house adopt a fresh perspective on its past in terms of both design and marketing. From the renaming of Bond Street Tube station to ‘Burberry Street’, to partnering with ‘greasy spoon’ Norman’s Cafe, the brand is continuing to tap into its British roots in innovative ways. More recently, Burberry played on its knight motif for its AW25 show, as a mystery man in full armour graced the front row taking selfies with the likes of Nicholas Hoult and Anna Wintour.
It seems to be paying off. Perception of the brand’s innovative design and engaging content have increased by 10 and 11 per cent, respectively, since Lee took the helm. Despite this uplift, the brand has yet to buck the luxury slowdown, reporting losses of 22 per cent during the data capture period. Newly appointed CEO Joshua Schulman believes heritage, creativity and innovation will pave the way for the brand in its ‘Burberry Forward’ plan.
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Already ranking as the second most innovative brand within the Index, the past year has seen Burberry focus on innovating its scarf category, an area that remains a bright spot for the company despite declining revenues. In November 2024, the brand partnered with virtual try-on provider Wanna on its scarf try-on tool in support of its ‘Wrapped in Burberry’ holiday campaign. The tool works as both a traditional try-on aid — allowing users to try on 50 variations of the Burberry scarf from their own homes — and as a means for drumming up user-generated content. Tech isn’t the only innovation area feeling the love, however, as the house taps next-gen materials company Spiber’s Brewed Protein textiles for the making of its B Shield scarf. As Lee and Schulman’s tenures continue, innovation could play a pivotal role in the brand’s turnaround.
Key takeaways:
- Gucci scales back while Burberry innovates. Previous innovation leader Gucci scales back on gamification and resale as the brand adopts a back-to-basics approach. Balenciaga leads with a focus on subculture, while Burberry’s adoption of AR and next-gen materials sees the brand secure second place.
- Ethical AI use is key to adoption. AI offers the luxury industry new ways to conduct existing tasks, with the potential to enhance operations from clienteling and marketing, to storytelling and design. For brands, the transparent communication of AI use, as well as the development of their own ethical guidelines could protect them against consumer concerns.
- IRL gaming and digital fashion gain ground. Gamification comes to the fore albeit on a smaller scale, seeing brands focus on exclusivity and IRL interaction. Digital fashion offers opportunities for brands across marketing, conversion and merchandising. Meanwhile, traceability sees unprecedented growth as brands prepare for DPP legislation.
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