Artificial intelligence-driven personalization, privacy concerns and sustainable digital engagement among Generation Z consumers in Albania

Abstract Personalization driven by artificial intelligence (AI) is the dominant mode through which digital platforms engage young consumers, yet its consequences for the trust underpinning sustainability-oriented engagement remain contested. Drawing on privacy calculus theory, this study models perceived AI-driven personalization as reaching consumer trust through a direct route and an indirect route via privacy concern and examines trust as a proximal correlate of sustainable digital engagement, with digital literacy as a boundary condition. Partial least squares structural equation modeling was applied to survey data from 234 Generation Z consumers in Albania, an emerging European economy with comparatively immature data protection enforcement. Perceived personalization was associated with higher privacy concern, and privacy concern with lower trust; the indirect path was negative and significant, while the direct path was not, yielding a negative and significant total association. Trust was only weakly associated with sustainable digital engagement, explaining 3.5% of its variance, and digital literacy predicted lower privacy concern but did not moderate the personalization–privacy link. In an exploratory post hoc extension requiring replication, digital literacy was the strongest observed correlate of sustainable digital engagement, and the trust–engagement association did not persist once literacy was included. These associations suggest that personalization pursued without trustworthy data governance may be accompanied by rising privacy concern rather than rising trust, and that capability-related conditions may matter more than trust for sustainable digital engagement in this setting. Implications for platform strategy, digital inclusion, and data protection policy are discussed. The findings contribute particularly to SDG 9 on inclusive and responsible innovation and SDG 12 on responsible consumption.