You only need to scroll X for five minutes to catch a tweet about AI. More specifically, how it can already be deployed in a variety of different business processes to improve efficiency, accuracy and the customer experience.

The fashion industry has and continues to be a leading example – whether via online bots acting as personal shoppers or delivering e-commerce experiences that are tailored (pardon the pun) to the customer.

In the past couple of years, fashion has also been turning to AI to step up the battle against one of the challenges of the sector – the $1.9tn counterfeit market. It’s a perfect application of AI, which can harvest vast amounts of data relating to tiny inconsistencies in fakes. Inconsistencies which the human eye has trouble spotting some of the time. Jimmy Choo and Burberry are among the fashion houses capitalising on image recognition AI, with Patou even launching its own AI verification system – Authentique Verify. As with other forms of AI, the accessibility of the technology is ever-increasing, with developers such as Entrupy providing achievable solutions to help combat the reputational, environmental and social damage the counterfeit market causes.

No doubt there will be plenty more great examples of AI application in fashion over the next few years, but with the European Union concluding its trialogue negotiation over the EU AI Act in December – and other countries beginning to develop an approach to regulating AI – the industry needs to be ready for the regulation that is coming.

Fashion should now be thinking about and implementing an ethical and principles-based approach to the use of AI, particularly in the EU. It isn’t easy. In DLA Piper’s AI Governance Report, 99% of the 600 business leaders surveyed – many of them operating in the consumer goods sector – cited defining and implementing good governance as a key challenge. For the fashion industry, this means ensuring consistent internal use through coherent policies and training – covering permitted and prohibited employee use of the technology, data protection and intellectual property considerations, and robust monitoring processes to capture any AI ‘hallucinations’. Due diligence on the tools on offer, robust contracts with AI providers, meaningful impact assessments and documented decision-making are also crucial.

In 2018 the business community in the EU was largely unprepared for GDPR, and uncertainty and confusion ensued. Businesses using ‘AI’ now, a definition that is much broader than the latest large language model, can learn from those mistakes and use the next 18 months to gain an edge over competitors.

Kurt Davies is a senior associate in DLA Piper’s Birmingham, England office. He advises on both domestic and cross-border strategic commercial agreements, including international agency and distribution agreements, commercial joint ventures, technology contracts, route-to-market strategy, supply chain and e-commerce. He also advises on the data protection implications that frequently arise in connection with such arrangements. He can be reached at [email protected].