A recent study published in the Journal of Hospitality Marketing & Management reveals that branding products with the label “AI” can significantly reduce consumer interest, as reported by Erika Tulfo for CNN.

Conducted by Dogan Gursoy and his team at Washington State University, the research highlights a growing consumer reluctance to embrace artificial intelligence (AI) in everyday products, despite its rapid technological advancements. The study involved participants from various age groups and compared their responses to identical products, with one version described as “high tech” and the other as incorporating AI. Across different categories, including vacuum cleaners, TVs, and healthcare services, consumers showed a markedly lower intention to purchase items labelled as AI-powered.

The research delves into two types of trust influencing consumers’ hesitation: cognitive and emotional. Cognitive trust relates to the high expectations people have of AI, viewing it as a technology that should be flawless, free from human error. When AI fails to meet these expectations, trust erodes quickly. This is exemplified by Google’s AI-generated search results tool, which faced backlash for providing inaccurate information, leading the company to scale back some features.

Emotional trust, on the other hand, is influenced by fear of the unknown, as many consumers lack a deep understanding of how AI functions. Gursoy notes that before the advent of AI technologies like ChatGPT, most people were unaware of AI’s pervasive role in everyday digital services, such as autocorrect or movie recommendation algorithms.

Pop culture has also shaped public perception of AI negatively, with Hollywood frequently portraying AI as a threat to humanity. This portrayal has contributed to a general distrust of AI, compounding fears about the technology.

The study further highlights the perceived risks associated with AI, particularly concerning how personal data is managed. As governments struggle to regulate AI, consumers remain wary of how their data is used and protected, leading to reduced enthusiasm for AI-driven tools designed to enhance user experiences.

Gursoy advises brands to reconsider using “AI” as a marketing buzzword without clearly explaining the technology’s benefits. The study suggests that a lack of transparency and understanding can damage consumer trust, even with established brands. Instead, companies should focus on crafting the right messaging, emphasising how AI can provide practical benefits to consumers, thereby alleviating fears and fostering trust.

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https://www.cnn.com/2024/08/10/business/brands-avoid-term-customers