The Impact of AI-Driven Personalization Tools on Privacy Concerns and Consumer Trust in E-commerce

Abstract

The incorporation of AI (Artificial Intelligence) tools in e-commerce has brought about significant benefits and challenges for businesses and customers. AI technologies have provided personalization tools for business to tailor their product experiences according to individual customer needs, which has helped businesses create customer loyalty and satisfaction. On the other hand, the incorporation of these AI-driven personalization tools in business has also raised critical privacy concerns. This is attributed to the heavy reliance on data of these AI-driven personalization tools. Therefore, this research study seeks to investigate the impact of AI-driven personalization tools on privacy concerns within the e-commerce sector. Furthermore, the research study seeks to evaluate how these privacy concerns on AI-powered recommendation systems influence users' trust in the competence of the AI system and the trust in the Alignment of the AI system with their ethical values. To achieve these objectives, the researcher uses a quantitative research design. The researcher administered a survey to 453 respondents, including Amazon customers and reviewers. The tool used for data collection is the Lime Survey. The researcher conducted data analysis using SPSS statistical data analysis tools. The data analysis was meant to test hypotheses and identify relationships between the research variables. The findings of the research study reveal that high perceived benefits of personalization decrease a user's privacy concerns about an AI system. However, the perceived anonymity of the internet did not yield significant results. On the other hand, the findings of the research study reveal that high perceived risks (data breach risk and consent risks) increase the privacy concerns of users.