THE EFFECT OF AI-BASED RECOMMENDATIONS ON CONSUMER BUYING BEHAVIOR IN E-COMMERCE

Abstract

Artificial Intelligence (AI) has changed the face of e commerce, especially through product recommendation systems that have a huge impact on the consumer’s decision to purchase. This research is intended to discuss the influence of AI-based recommendation systems on the purchase habits of the online shoppers in Pakistan. The research objectives include: (1) measuring the influence of AI-based recommendations, (2) studying the mediating factor, perceived usefulness, (3) evaluating the moderating effect of trust in AI systems. A quantitative research design was adopted and utilized the same set of structured questionnaires filled by 300 respondents. Data analysis was carried out under the use of Structural Equation Modeling (SEM) through the help of SmartPLS 4.0. The results show that AI recommendations have a positive impact on the consumer behavior, and perceived usefulness as a partial moderator of this relationship. AI’s trust fully mediates AI recommendations-consumer behavior relationship. The study places importance on being transparent and of value to the AI recommendations for increasing consumer confidence and bettering the e-commerce strategies.