The effects of artificial intelligence on purchasing decisions

The rollout of loyalty cards and online shopping carts means consumers’ shopping habits are no longer a secret. 

The use of AI means that, using self-learning, intelligent software, retailers are becoming much better at predicting shopping habits. This also means they are better at creating targeted ad campaigns and encouraging people to buy additional items. 

They can build a customer profile and use personalized suggestions and offers to increase sales. And, the more someone shops and spends online, the easier it is for AI to know what kinds of products they might like to buy in future. 

This trend has accelerated during the pandemic, as more consumers are turning to online shopping to avoid the risks of shopping in traditional stores. 

How does it affect consumers?

Obviously, AI is good news for big businesses. It brings many benefits, including reducing operational costs, increasing efficiency and productivity, growing revenue, maximizing sales opportunities and improving the customer experience.

But, what effect does this have on consumers? And how do they feel about it? 

Well, generally, people are open to AI and happy to be recommended products. In a survey, 73% of global consumers said they don’t mind businesses using AI if it makes life easier. 

Offers, promotions, and discounts are mostly welcomed, as they can provide savings and are much more convenient than collecting physical coupons. Plus, online offers are more personalized and tailored to that customer’s specific interests. 

However, there is a line, and people don’t like feeling like they’re being manipulated. It can, at times, make them uncomfortable, especially if the company is using stereotypes and making assumptions about their character based on their purchase history. 

The safety of personal data and the potential for it to be stolen or misused is another issue. Concerns in this area have peaked in recent years, with 90% of American internet users saying they are concerned about the privacy and security of their personal information. 

Increased spending is another concern to consider. Studies show that with proper use of AI, companies profits increase. But, this also means that online shoppers are spending more on impulse purchases, and it’s often on things they don’t need or necessarily want.