AI Recommendations: Friend or Foe? Unraveling the Impact on Consumer Benefits and Privacy

Artificial Intelligence (AI) and marketing have transformed consumer behavior and shopping experiences, especially through Recommender Systems (RSs) in e-commerce. RSs use algorithms to provide personalized recommendations, enhancing shopping convenience. However, this raises data privacy and ethical concerns, as RSs rely on user data. This research explores the quality determinants of RSs and their impact on consumer behavior, focusing on privacy awareness and its effect on repurchase intentions. Using a qualitative approach with semi-structured interviews, the study targets Indonesian respondents aged 18–40 with e-commerce experience. Findings reveal that recommendation quality, especially self-reference and vividness, significantly influences purchasing decisions. Respondents prefer recommendations that match their preferences and are visually appealing. Positive shopping experiences are linked to efficient and accurate RSs, but there's a need for improvements in transparency, novelty, diversity, and advanced technologies like AR. Respondents are aware of digital data storage but have limited understanding of privacy concerns. They trust e-commerce platforms with basic personal details but are hesitant to share sensitive information. Despite privacy issues, e-commerce remains vital, with respondents emphasizing the need for transparency, robust security, and clear explanations for data use to maintain trust. Addressing these issues not only enhances customer experience but also demonstrates that consumer trust directly impacts the sustainability and success of the business.