Consumers Just Aren’t Buying AI-Powered Products Like Many Companies Hoped For

As businesses continue to slap the artificial intelligence (AI) label on products, consumers are shying away. New research reveals that consumers just aren’t quite ready for the AI takeover.

According to a study published in the Journal of Hospitality Marketing and Management, consumers were less likely to buy a product with “AI” stamped on it. In the study, 200 participants were asked about their intentions to buy certain products, such as vacuums, televisions, and even health services. Some products had “AI-powered” written on the label, while others were described as “high-tech.” The results were unanimous.

“In every single case, whenever we mentioned ‘AI’ versus ‘high tech,’ consumers’ purchase intention went down,” said study author Dogan Gursoy, a hospitality management professor at Washington State University’s Carson College of Business, per Fortune.

Gursoy noted that companies are likely overestimating the trust consumers place in AI. This lack of trust is likely fueled by the potential threat AI poses, particularly the technology’s ability to weaken privacy.

“Everyone is keeping the AI development or what’s going on with AI a secret, and that’s understandable,” Gursoy said. “But consumers also need to know that their data is safe.”

A survey completed by consulting company Cognizant found consumers feel threatened by AI. Of 1,000 U.S. shoppers, only 30% trust generative AI. Additionally, 28% thought GenAI would benefit consumers the least compared to corporations, small businesses, employees, and the government. Meanwhile, 73% said the technology would only increase corporate profits.

Earlier this year, the Federal Trade Commission (FTC) opened an investigation into a tactic called “surveillance pricing.” Reportedly, some companies are utilizing AI to monitor customer characteristics and activity. They then use this profile to raise or lower prices for products depending on that behavior. In effect, different customers get varying prices for the exact same product.

The bottom line is that companies need to convince buyers that AI does improve products, and so far, most brands have failed to come up with a solid marketing strategy for this. As it stands, consumers simply don’t see the need for AI in products like coffee makers and vacuum cleaners.