Abstract
This research investigates how artificial intelligence delivers value to consumers of luxury items, filling a gap in the literature regarding AI’s influence on luxury perceptions and behaviours. Three studies employ qualitative and quantitative methods. Study 1 uses qualitative responses from young adults to uncover AI’s dual provision of functional value and hedonic value. Study 2 surveys luxury consumers and finds that the desire for unique products increases perceived emotional and functional value of an AI-enabled luxury watch, which in turn reduces risk perceptions and enhances willingness to buy, with effects strengthened by inconspicuous luxury motivations. Study 3 collects qualitative insights from marketing managers. For luxury managers, the results of this research illustrate AI’s potential to enrich luxury consumption through blending digital innovation with traditional prestige.