Design for Function, not Feeling: How Data-Driven Product Design Influences Consumer Perception

As product-service systems become increasingly important, product design takes on a crucial role. Companies use Data-Driven Product Design (DDPD) to boost product development while simultaneously benefiting their services. However, research has not yet analyzed how consumers perceive products that are developed using DDPD. This quantitative study investigates how DDPD influences consumer perception and how this is moderated by consumers' purchase motivation. An online vignette experiment was conducted to measure consumer perception of a smartphone across seven product dimensions. Using structural equation modeling, results show that DDPD significantly affects consumer perception, with strong positive effects on perceived customization, convenience and usability, and negative effects on data privacy and product quality. Overall, the perception of DDPD is positive. Hedonic purchase motivations reduce the positive effects of DDPD, indicating a misalignment between DDPD and emotionally driven product characteristics. The findings advance theory and inform practitioners how to tailor DDPD strategies.