Is AI hurting product sales? New study reveals consumer trust issues

Does branding a product as an “AI product” hurt its sales more than it helps? A recent study published in the Journal of Hospitality Marketing & Management explored the impact of including the words “artificial intelligence” in the marketing materials of consumer-facing products like televisions, cars and smartphones.

The findings revealed that using the term “artificial intelligence” in product descriptions reduced consumers’ purchase intentions, ultimately hurting sales.

The hidden factors behind AI product hesitation

When consumers buy a product, especially a big-ticket item, more is at play than just the idea or fact that the product solves a problem or fulfills a need in the consumer’s life. Behind the scenes, the buyer is evaluating the risk of buying or switching to this new product. Conscious, subconscious and emotional trust are crucial factors in this decision-making process.

While most people agree that AI can positively impact operations and processes, they become fearful or skeptical in certain contexts.

These contexts include situations where they feel their data could be compromised or used in ways they disapprove of or when issues related to morality and ethics are presented.

AI has been around for decades in enterprise and consumer-facing settings, typically running in the background of systems and programs we use daily. But it wasn’t until recently, when generative AI tools like ChatGPT gained significant traction among consumers, that AI truly took center stage.

AI’s mainstream popularity, sparked by ChatGPT, influenced nearly every company to highlight how it was using or planning to use AI. Firms rushed to market their products as “AI-powered” because, in the early stages of a new technology cycle, merely mentioning the latest technology tends to increase valuations and attract new investors. Because of this, we saw companies revisit their marketing strategies, and instead of selling merely computers, phones and televisions, they began putting AI computers, AI phones and AI TVs on sale. Although we saw the results of these efforts on an investor interest level, we didn’t see how effective this AI marketing was when it came to sales.

The study, titled “Adverse impacts of revealing the presence of “Artificial Intelligence (AI)” technology in product and service descriptions on purchase intentions: the mediating role of emotional trust and the moderating role of perceived risk,” investigates this topic by comparing the marketing of three items, each sold in two versions: one marketed as “AI-powered” and the other as “high-tech,” with the items being identical beyond these descriptors.

Study findings: AI branding and emotional trust

The study found that including the term “artificial intelligence” in product descriptions decreased purchase intentions. A primary factor was consumers’ emotional trust toward AI, which played a significant role in their decision-making process. It signaled that some consumers do not trust AI on an emotional or subconscious level. The study also revealed that this emotional trust became even more crucial for higher-risk products, such as self-driving cars, compared to lower-risk items like AI-powered TVs.

Buying any new product requires a risk assessment and, to some degree, a leap of faith. When it comes to AI, while there is a demographic open to technological innovation, there is another group that believes AI is causing more harm than good or has enough risk to second-guess its benefits; these concerns typically range from AI making decisions that should require human judgment to fears about data misuse and job displacement. Even when shopping for something seemingly unrelated to these concerns, like a TV, these underlying fears can subconsciously influence consumers, making them less willing to purchase AI-branded products.

The AI buzzword backlash

Of course, this is just one study’s findings, but the results are eye-opening. It’s not unusual for people to become averse to a word or phrase once it enters “buzzword” territory, and AI has certainly reached that point.

Ironically, consumers didn’t seem to hesitate to buy these same products before AI became a main selling point, or even when AI existed within a product but wasn’t the highlighted feature. Marketers should consider that datapoint and dive deeper into it to discover what truly gives consumers confidence when shopping and what they care about when making purchasing decisions.

As we see in this AI example and even in blockchain in the past, it typically isn’t the underlying technology that will win an audience over. In fact, the underlying technology normally causes more problems than it does justice to the item being sold because not everybody understands technological underpinnings, so tech marketing can end up confusing more people than it persuades.

It’s important to remember that not everyone is a technologist when innovating. Hearing about revolutionary technology triggers some people to think of dystopian scenarios like the Terminator or Bladerunner rather than a future where technology improves their lives and creates a better world.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

Watch: AI is for ‘augmenting’ not replacing the workforce