While tech giants continue to invest billions in artificial intelligence (AI), a recent study suggests that labeling products as "AI-driven" could deter potential buyers. The study, published in June in the Journal of Hospitality Marketing & Management, found that describing a product as AI-driven significantly reduces customer purchase intent. Participants from different age groups were shown the same products, with the only difference being the description — either "high-tech" or "AI-driven."
"We looked at vacuum cleaners, televisions, consumer goods, and healthcare services," said Dogan Gursoy, one of the study's authors and Taco Bell Distinguished Professor of Hospitality Business Management at Washington State College, in an interview with CNN. "In every case, the intention to buy or use the product or service was significantly lower when AI was mentioned in the product description."
Trust and transparency
The study highlights a crucial problem: although AI is progressing rapidly, consumers are still reluctant to integrate it into their everyday lives. The study highlights two types of trust influencing consumer perceptions: cognitive and emotional. Cognitive trust is based on the expectation that AI, as a machine, should be free from human error. When AI fails, this trust is easily shaken. For example, Google faced criticism earlier this year when its AI-generated search results provided users with confusing and inaccurate information.
Emotional trust, in turn, is affected by consumers' limited understanding of how AI works, leading to fear of the unknown. Gursoy pointed out that Hollywood's portrayal of AI in science fiction movies, where robots are often depicted as villains, has shaped public perception and fueled concerns about the role of AI in society.
In addition, concerns about transparency—particularly regarding how AI handles personal data—further complicate the acceptance of AI-powered products. As companies struggle with these trust issues, Gursoy advises them to carefully craft their messaging. Rather than simply labeling products as "AI-powered," companies should explain how the technology will benefit consumers to allay their concerns.
Ultimately, the study shows that while AI is being hailed as the future, companies must address the significant trust and transparency barriers currently preventing widespread consumer adoption.
