AI-Driven Business Model: How AI-Powered Try-On Technology Is Refining the Luxury Shopping Experience and Customer Satisfaction

Artificial Intelligence (AI) has revolutionized interactive marketing, creating dynamic and personalized customer experiences. To the best of our knowledge, no studies have ventured into how firms in the luxury sector can leverage AI marketing activities to innovate their business model and boost the development of future digital marketing to enhance the luxury shopping experience (LSE). Building on the existing LSE literature and adopting a business model innovation (BMI) lens, we conducted an experimental study to identify how AI-powered try-on technology (ATT) can contribute to LSEs and create customer value proxied by customer satisfaction. In addition, we determined the specific dimensions of the LSE that are most affected by AI marketing efforts. Furthermore, our findings explored the role of AI in driving BMI and the interrelationship between enhanced customer satisfaction and BMI. This research contributes to understanding the crucial role of AI in shaping the future of interactive marketing in the luxury context.