Study Reveals “AI” Label May Deter Customers from Buying Products

As tech companies continue to invest heavily in artificial intelligence, a new study suggests that labelling products with the term “AI” may actually reduce consumer interest. The study, published in the Journal of Hospitality Marketing & Management in June, found that when products were described as utilizing AI, potential buyers were less likely to purchase them.

Researchers, led by Dogan Gursoy, the Taco Bell Distinguished Professor of Hospitality Business Management at Washington State University, tested consumer reactions across different age groups by presenting them with identical products. The only difference was that some were labelled “high tech,” while others were described as using AI. In every case, the AI-labeled products received significantly lower purchase intentions.

The study highlights a growing disconnect between the rapid advancements in AI technology and consumer trust. While AI is increasingly integrated into everyday products, from household appliances to self-driving cars, many customers remain hesitant to embrace it. This reluctance is influenced by two key types of trust: cognitive and emotional.

Cognitive trust, the study explains, is related to the expectation that AI, as a machine, should be flawless. When AI does make mistakes, trust is easily undermined. This was exemplified earlier this year when Google’s AI-generated search results tool provided inaccurate and misleading information, leading to public criticism.

Emotional trust, on the other hand, comes from consumers’ limited understanding of AI, causing them to rely on their instincts and subjective judgments. Gursoy noted that fear of the unknown plays a significant role in this mistrust, compounded by the portrayal of AI in popular culture, where robots and AI are often depicted as threats to humanity.

Concerns over data privacy and a lack of transparency also contribute to consumer wariness. Gursoy cautions that companies should avoid using “AI” as a mere buzzword and instead focus on clear messaging that explains how AI can benefit the consumer, thereby addressing fears and building trust.

As the study reveals, simply branding a product as AI-powered might not be the best strategy. Instead, companies need to provide clear and transparent information about how AI is used and how it can enhance the user experience.