AI-Driven Personalization, Consumer Privacy, and Brand Trust in Digital Commerce

Abstract

In the digital commerce landscape, Artificial Intelligence (AI)-driven marketing has emerged as a powerful tactic to enable brands to offer individual, product recommendation, targeted advertising, customised e-mail and real-time shopping experiences. Personalisation does, however, raise issues related to consumer privacy and the collection of data, the tracking and transparency of the algorithms, but it has a positive impact on consumer engagement and purchase intention. This paper examines consumer privacy issues surrounding AI-powered marketing and breaks down its effect on consumer trust in digital commerce.The paper explores the consumer privacy issues and their impact on the trust in digital commerce for AI marketing. It explores how the quality of personalization, usefulness, transparency of data, consent processes, and privacy measures influence customer perceptions regarding AI in marketing. These results suggest that, when customers feel that the service is relevant, useful and respects their privacy, AI personalisation can positively influence customer engagement, satisfaction, and repurchase intention. However, excessive tracking and lack of clarity in the privacy notices, together with “personalisation that's too personal” erodes consumer confidence and increases consumer resistance toward digital brands. The results also show that, transparency, user control, data security and effective consent management lead to a reduction in privacy concerns and a strengthened level of trust in the brand. To conclude the study, AI-enabled personalisation in marketing can prove to be an effective tool in building positive customer relationships as long as there is a delicate balance between personalisation and data handling, data privacy and communication. The paper provides useful evidence for digital commerce companies seeking to maximize the performance of their marketing efforts in a manner that does not undermine their customers' trust and loyalty.