The Influence of AI Personalization on Purchase Intention in Online Shopping in Pakistan

Abstract

This paper considers the effect of AI-based personalization on customer purchase intention in the online shopping process, where consumer trust, and privacy concern are the mediating and moderating variables respectively. The research design was quantitative and cross-sectional and data were obtained in Pakistan which comprised 119 online shoppers via a structured questionnaire. The proposed relationships were tested by using correlation, regression, mediation and moderation tests. The results shows that consumer trust and purchase intention have a strong positive impact due to AI-personalization. Consumer trust is also a predictor of purchase intention with a significant level and mediator of the effects of personalization and purchase intention. The level of privacy concern, however, does not have a significant moderating effect between the level of personalization and consumer trust. The paper brings out that one of the key processes in which personalization affects consumer behavior is trust and privacy concern seems to play a minor moderation role in the current situation. These results add to the AI-based consumer behavior literature in the new markets and provide practical advice to the e-commerce platforms aiming at enhancing personalization based on the transparent, reliable and trust-establishing practices.