How Does Human‐ <scp>AI</scp> Co‐Creation Design Help Luxury Brands Win Consumers' Favor?

ABSTRACT The integration of generative AI into the luxury fashion industry is a burgeoning trend with the potential to impact consumer behavior significantly. While prior research has demonstrated the benefits of AI design in the fashion industry, it also suggests that such approaches may not fully align with the distinct values of the luxury segment. Building on prior research, this paper investigates how AI can be more effectively integrated into luxury design. We propose that human‐AI co‐creation presents a promising approach, as it balances efficiency with the value people place on human effort. Across four empirical studies, we find that human‐AI co‐creation in luxury design generates more positive consumer responses than AI‐only designs. This effect is mediated by perceived design effort. Human‐AI co‐creation is viewed as involving greater design effort than AI‐only design, and human‐led co‐creation is perceived as requiring more effort than AI‐led co‐creation. We further examine the moderating roles of co‐creation modes and luxury product types, revealing that human‐led (vs. AI‐led) co‐creation enhances perceived design effort and, in turn, improves brand attitudes, particularly for hedonic (vs. functional) luxury products. These findings offer valuable insights for luxury brands navigating the era of intelligent design, highlighting the importance of balancing human creativity with AI capabilities to sustain brand value and foster consumer acceptance.