Consumer responses to AI-designed virtual luxury products: a double-edged sword for perceived brand innovativeness and authenticity

Purpose Prior research shows that AI involvement in physical luxury design often triggers negative consumer responses, but whether this effect extends to virtual luxury remains unclear. Given the rapid growth of virtual luxury and its potential to reshape authenticity and value cues, this study examines consumer responses to AI-designed virtual luxury products. Design/methodology/approach Across four primary studies and one follow-up study, we compare consumer responses to virtual luxury products designed by AI with those designed by traditional human designers. Findings Unlike in physical luxury, consumers evaluate AI-designed and human-designed products similarly, with no significant differences in brand attitudes or purchase likelihood. A double-edged-sword mechanism underlies this pattern, as AI design increases perceived brand innovativeness but decreases perceived brand authenticity, and these opposing effects offset each other. Luxury purchase frequency further moderates the effect: compared with human design, AI design enhances brand attitudes and purchase likelihood among frequent luxury consumers, but diminishes these outcomes among infrequent consumers, who place differential emphasis on innovativeness versus authenticity. Originality/value This study extends AI-in-luxury research to the context of virtual luxury, develops a dual-path framework based on perceived brand innovativeness and perceived brand authenticity, and identifies luxury purchase frequency as an important boundary condition. It also provides insight into communication strategies for AI-designed virtual luxury products.