The Effects of AI-Powered Personalization on Consumer Trust, Satisfaction, and Purchase Intent

The integration of Artificial Intelligence (AI) in e-commerce has dramatically reshaped how businesses interact with consumers. AI-driven personalization is considered among the most powerful strategies for increasing consumer engagement, loyalty, and overall profitability. Practitioners have questioned its impact on consumer trust, satisfaction, and purchase intent due to growing concerns over privacy. This study offers a quantitative analysis involving 473 respondents to explore how AI-powered personalization influences these key consumer outcomes. Employing structural equation modeling, the findings indicate that AI-based personalization significantly improves trust and satisfaction, with satisfaction acting as a significant mediator for purchase intent. Privacy concerns stand out as a critical moderating factor, potentially hindering the positive effects of personalization on trust and subsequent purchase behaviors. We conclude the study with recommendations on ethical data practices, transparent communication, and regulatory frameworks to build and maintain consumer trust in an era of AI personalization.