Vol. 06, No. 1 (2024) 13-20, doi: 10.24874/PES06.01.

002

Proceedings on Engineering
Sciences
www.pesjournal.net

A STUDY ON THE USAGE OF ARTIFICIAL

INTELLIGENCE TECHNOLOGY IN INFLUENCING
CONSUMER BUYING BEHAVIOUR WITH
SPECIAL REFERENCE TO ONLINE SHOPPING

Received 03.01.2023.
1 Received in revised form 12.05.2023.
K. Ramya Accepted 22.05.2023.
K. Karthikeyan UDC – 004.8

ABSTRACT
Keywords:
Consumer buying behaviour, Artificial The digital landscape evolves into a new era in the business world. The digital
Intelligence, Online shopping. process involved the industries and businesses to think on new applications and
domains of implementation of Artificial Intelligence into business. The Industries
and business started to invest in technologies for their business benefits and it
will also improve customer experience, help to lift conversion, revenue, and
profit significantly.. AI reacts faster than any human can catch both micro and
macro trends. This paper is leveraging the innovativeness in technology and its
impact on consumer buying behavior analyzed. AI technology supports buyers
during online shopping platforms with the support of following tools like Visual
Search, Voice Assistant Search are used by the customers to search and find
product-related information. Consumers are influenced by higher-touch
technology assistance. In part of this study, Five hundred respondents were
chosen for the sample study. The questionnaire was used to collect the data then
it was classified and tabulated for statistical analysis to solve the problems of
research work, justifying the objective and proving the hypotheses framed for the
study. Finally, this study evaluated how the respondents are influenced by AI
technology while doing online shopping in E-commerce platforms. According to
the gathered data analysis and interpretations were formulated with the
following appropriate statistical tools have been applied Descriptive Analysis,
One Way ANOVA.
© 2024 Published by Faculty of Engineering

1. INTRODUCTION future. The AI learns from visitors’ behaviour in real-

time – and so incorporates machine learning -
AI provides better customers’ journeys and experiences anticipating the visitors’ intents, and adapts the results
to the online platform. It delivers optimized customer to rank the most relevant products higher, maximizing
experiences on and off their e-commerce websites by your sales. Advancements in technology help to
using customer data to decide business and predict the compete for online retailers’ attention on every day. To

1
Corresponding author: K. Ramya
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 Ramya & Karthikeyan, A study on the usage of artificial intelligence technology in influencing consumer buying
behaviour with special reference to online shopping
identify the best opportunities for your e-commerce if we somebody want to start a business he/she can
business strategy, innovative technologies, the intuitive know the latest trends the consumers are into. If
business design that to improve the customer somebody wants to target women and teenage girls and
experience. The advent of Artificial Intelligence turbo- wants to know about their interests thy can reach the
charged the approaches and helps to frame out data through artificial intelligence. They might start up
astounding business practices at scale. Moreover, by classic fashion style brand, start selling out makeup
2025, AI revenue is expected to supersede $36.8 products. In this way they can have accurate
billion,aq says the research report by Tractica. information and can maximize their profits by building
strategies around it.
Artificial Intelligence replies to customer inquiries,
sending reminders about the wish lists and tailored Personalized Consumer Experience:
alerts on shopping deals the customers. Moreover, AI
helps businesses to deal dynamically inventing new Through artificial intelligence the information about
modes of communication to engage customers. Also, AI customers is driven like how many time a user go
contributes to the process with more accurate data and through certain websites, what they look for, about their
enabled e-commerce shops to find the right customers. geo-location, about the devices through which they are
According to McKinsey Global Institute predicts that signing in. Predictive personalization has helped the
intelligent agents and robots could replace up to 30 brand to come up with more personalized consumer
percent of the world's current human labor by 2030. experience. Now consumers do not need to specifically
Artificial intelligence is impacting the longer term of take their time out to go to a store to buy a certain
virtually every industry and each person. product. With the data available brands will come up
with ideas that enhances consumer experience. There
The programming of computers to do tasks that requires has been trend of virtual shopping where specific
human intelligence like reasoning, learning, problem product is been shipped to customer€™s place even
solving and perception is coined as artificial before shopping so they can try it out and then make
intelligence. With AI submerging in main streams more them decide whether they want it. In this way customers
and more companies and business are adapting toward feel that experience or effort is just made for them.
AI to build competitive strategies. The applications of Personalization is the key to convert your prospects into
artificial intelligence ranges from voice powered Google conversions.
Assistants to Siri and Alexa that converts your query
into answer through Natural Processing Language and Boosting Customers loyalty:
to Tesla introducing smart cars to YouTube showing
data driven results based on your behavior and interests. With the help of insights about consumers€™ behavior
Where marketing departments are making marketing pattern, brands which are coming up with more
strategies based on the insights provided by Artifical personalized consumer experience its more likely that
Intelligence so are the consumers reacting to it. Here we customers€™ loyalty will shift towards those particular
look at the how artificial intelligence is influencing brand. According to Microsoft 97% of customers say
consumer behavior. that customer service is important factor when they
choose a brand. Artifical Intelligence has helped further
1.1 Purpose of using AI in Current Scenario to enhance customer€™s service Through Chat bots
customers get quick response as they can deal with
Increase customers spending: multiple queries at a time and are available 24/7.
Through clustering and data collected about customers
It is no more doubt that customer€™s spending will one can easily match their likes and dislikes and
increase as one of the core element of Artificial recommend them their particular option of product or
Intelligence i.e Machine learning let the teams to decode service they are looking for that. These little nuances
the huge data accumulation that narrows down the can convert your customer into regular client.
information in a way that helps them to identify target
audience, what are customers looking up to, do trend Great convenience to customers:
analysis and then creating funnels that are more user
focused hence lessening the time spent and ultimately There is no doubt to say that Artificial Intelligence has
will convert prospect into conversion. brought great convenience to customers. In fact they are
now accustomed to convenience. We have not even
Costumers spending are more likely to increase because thought booking appointments, virtual shopping,
once marketing teams have identified their target monitoring your home security would be just a click
audience they can build up their marketing strategies away.
around it. They know when to do email marketing at
what time users are more likely to open the email. With Face and finger print recognition is one of the
increasing competition businesses are paying more innovations resulted by AI. More importantly it has
attention to what do they offer, whom to offer. Let’s say saved times as it functions in a way that does not

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 Proceedings on Engineering Sciences, Vol. 06, No. 1 (2024) 13-20, doi: 10.24874/PES06.01.002

involve human intelligence. Imagine how much time we and targeted with products based on their preferences
can give to other things if we are not bound to do tasks and purchase history. It displays product
that can be operated through artificial intelligence. recommendations and shopping process shopper action
Artificial Intelligence has created horizon of new on every purchase. It communicates to the customers in
opportunities. real time, targeting shoppers with personalized product
recommendations. Machine learning platforms are
Customers will shift to voice technology: supported to understand the buyer’s intent based on
their actions, in real-time, and a list of recommended
Several leading retail and financial organizations will products. Real-time product targeting is also called
shift towards voice technology because customers feel “cognitive product targeting.” Real-time product
comfortable using this. Voice searchers are easier for targeting issues are solved artificially intelligent. It
customers for queries and get better results than textual starts with realizing the historical shopper data and
queries. In addition, the use of digital a assistant in daily ingesting customer clicks in real time.
life means you are more open towards using voice over
technology in daily life. The oldest barrier has gone, and 2.2 Visual search
now people prefer voice over texting.
It enables shoppers to search online by using images
Bridging the gap between personalization and instead of text or keywords. It provides the solution for
privacy: people in the scenario of unknown things. Visual search
helps to simplify the search process and enables goal-
The privacy should be the main concern of every oriented shoppers to find the right products faster and
industry and it is realized that consumers want their easier.
information to be secured by the brands and it is an
important analysis to build a securing policy using AI 2.3 Chatbot
tools. When customers are satisfied with the business
policies and they would find that they are getting Chatbots help users to find information by asking
several advantages as a result their trust will build on questions and requests through text input, audio input,
business brands. Consumers get thrilling and exciting or both—without the need for human intervention. It
outcomes from AI tools and techniques. The AI tools started from the smart speakers at home to messaging
usage will increase the customers€™ trust over the applications at the workplace. The AI chatbots are
different businesses in the market called “virtual assistants” or “virtual agents.” Examples
are Apple's Siri, Google Assistant, and Amazon Alexa.
The Verdict Users commend the assistants by questioning or
controlling home automation devices or media playback
No doubt artificial intelligence is playing an important via voice and managing routine tasks such as email, to-
role in every aspect of life and especially in retail. Due do lists, and calendars with verbal commands. These
to AI businesses are earning more profit due to technologies improve customer-centric advertisements
competitive advantages it gets due to AI. However there and help to build deeper connections with audiences.
is dire need of informing people about its useage so that
more and more people can use AI as AI is our future! 3. REVIEW OF LITERATURE
2. USAGE OF AI TECHNOLOGY IN According to Mona H. Mussa (2020), the impact of
INFLUENCING CONSUMER BUYER Artificial Intelligence (AI) on consumer behaviors
BEHAVIOUR within the retailing sector significant relationship
between Artificial Intelligence and consumer behavior.
India is most remarkable progress and great scope on In addition, The model has a high ability to predict and
modern technologies used in the marketing of products explain consumer purchase behavior through Artificial
and influencing the customers. This advancement in Intelligence, and this was proved by the validity of the
artificial intelligence is categorized into four major first hypothesis (H1) through the value of (R-Sq =
parts. Viz, real-time product targeting, Visual Search, 0.95.8) in the model. The researcher recommends that
Chatbot, and advertisements. The modern age of online retailers employ Artificial Intelligence in each
customer purchase and influence is determined and step in the consumer journey, from need recognition,
controlled by artificial intelligence. It provides information search, evaluation, and purchase decision-
marketing solutions and business application supports to making to post-purchase behavior to predict consumer
many international market leaders. purchase behavior in the online platform.

2.1 Real-time product targeting Advances in technology and therefore the potential for
AI in digital marketing are on the increase, and
Product targeting has been practiced primarily in the therefore the possibilities are limitless. AI is getting
online retail world. Here, customers were segmented used more and more in operational markets for

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 Ramya & Karthikeyan, A study on the usage of artificial intelligence technology in influencing consumer buying
behaviour with special reference to online shopping
identifying risk, conducting marketing research, and procure and examine enormous volumes of information
identifying business functions to coordinate with target and give choices to activity. Web-based business is
customers (Campbell et al. 2020). While the utilization currently receiving this innovation to recognize designs
of AI in digital marketing will influence marketing dependent on perusing, buy history, credit checks,
strategies, business models, marketing procedures, and account data, and so on.
consumer service options, it'll also influence customers'
behaviour. The main focus of AI in digital marketing is Meenakshi Nadimpalli(2017) discussed the Consumer
not based on replacing human dynamics in critical and Industry Impact turned on by AI in retail,
decisions but on developing a more robust dynamic healthcare, crime investigation, and employment. S
digital marketing environment. It will allow advertisers Balasubramaniam (2018) examined the different
to quickly assess the wants of a possible customer and features of AI and its innovation, employment,
adjust the AI they employ in digital marketing to extend economy, and fate of humanity as we get progressively
sales (Campbell et al. 2020). associated and advanced in varying backgrounds

S. Manjula (2021) stated that change in consumer 4. GAP ANALYSIS

behavior with the support of Artificial intelligence to
analyses and predict the consumers’ needs. Further to A gap analysis is the process online shop use to
that this study expand the brands will develop better
compare their customer usage of AI in Ecommerce
selling techniques to the customers right and buy it.
Artificial intelligence follows consumer habits to trading with their expectation level. A gap analysis
determine the consumers to buy products and services (table 1) can be measured the satisfaction level of
from the market for the days to come. customers by factors like AI tools, revealing
exciting insights about the consumers' sentiments,
Shyna K and Vishal M (2017) revealed the job of needs, and desires with customer expectation
Artificial Intelligence reasoning in internet business and factors and comparing it to its target state of
its application in various zones of online business. achievement.
Computerized reasoning has the incredible capacity to

Table 1. Gap analysis

Area under consideration Customer Satisfaction with Customer Expectation
Desired State Current State Action Steps
1. Customer Satisfaction level (82.31%) The customer satisfaction level of AI Based on customer expectations like the ease
2. Expectation level (17.69%) is 82.31% but expecting level is also of access process and second-by-second
there at 17.69% contact of customer service needs, uneducated
people can also use voice search to get online
products. But need some modification in the
process method in voice search.
The suggestion given to online AI technicians
is that ease of access and quick contact with
customer service for the further target of
reaching a satisfaction level of 100%.

5. OBJECTIVES The tools used for analysis are percentages, Gap

Analysis, and ANOVA were applied.
Objectives are:
• To examine how consumer buying behaviour is 7. DATA ANALYSIS
influenced by AI with reference to online
shopping. The table 2 shows the frequency and percentage of
• To identify the difference in consumer demographic profile.
purchase patterns after the integration of AI.
In Gender, 295 (59%) of the respondent belongs to the
6. RESEARCH METHODOLOGY Male category and 205 (41%) belongs to the Female
category. The majority of the respondents belong to the
The present study focused on how consumer Male category for online shopping with AI.
buying behaviour is influenced by AI with
reference to online shopping. The primary data was In Age, 290 (58%) belong to the age of 18-24, 125
collected from the respondents through a structured (25%) belong to 25-34, 55 (11%) belong to 35-44 and
questionnaire. The sampling method used for data 30 (6%) belong to the age of >45. The majority of the
respondents belong to the age of 18-24.
collection is convenience sampling. The
questionnaires were distributed to 500 respondents.

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 Proceedings on Engineering Sciences, Vol. 06, No. 1 (2024) 13-20, doi: 10.24874/PES06.01.002

Table 2. Frequency and percentage of education. The majority of the respondents are
demographic profile bachelor’s degrees.
Number
S.No Variables Group Percentage The income of the family of respondents is <10000 is 45
(n)
Male 295 59 (9%), 10000-24999 is 75 (15%), 25000-49999 is 90
1 Gender Female 205 41 (18%), 50000-74999 is 75 (15%), 75000-99999 is 65
Total 500 100 (13%), 100000- 149999 is 75 (15%) and more than
18-24 290 58 150000 is 75 (15%). The majority of the respondents
25-34 125 25 belong to 25000-49999.
2 Age (years) 35-44 55 11
>45 30 6 Frequently purchased by respondents through online are
Total 500 100 weekly is 60(12%), Monthly are 180(36%), every 3
School or
5 1 Months are 175(35%) and Once in a year is 85(17%).
Equivalent
Bachelor’s
Majority of the respondents purchase online once in a
degree/Diplo 305 61 month or every 3 months once.
ma
3 Education Monthly amount spends for online shopping by
Master’s
145 29
degree respondents are, less than 5000 are 335(67%), 5000-
Professional
45 9
15000 are 115(23%), 15000-25000 are 15(3%), 25000-
degree 50000 are 5(1%), 50000-75000 are 15(3%) and
Total 500 100 >100000 are 15(3%). Majority of the respondents spend
<10000 45 9 less than 5000 for online shopping.
10000 to
75 15
24999
The AI Technology used for online shopping by
25000 to
90 18 respondents is, Chatbots 70 (14%), Visual search
49999
Income of 50000 to 95(19%), Voice assistant search 135 (27%),
75 15 Personalized ads 180 (36%), and other technology 20
4 the 74999
Respondents 75000 to (4%). The majority of the respondents used personalized
65 13 ads as one of the AI technologies.
99999
100000 to
75 15
149999 7.1 One-way ANOVA
>150000 75 15
Total 500 100 Objective 1: To examine how consumer buying
weekly 60 12 behaviour is influenced by AI in Ecommerce sectors.
Monthly 180 36 H0: There is no significant influence exists in consumer
Frequently
Every 3
Purchase 175 35 behaviour buying using AI in Ecommerce sectors.
5 Months
through Level of Significance: α = 5%
Once in a
online 85 17
Year
Total 500 100 ANOVA
<5000 335 67 Sum of df Mean F Sig.
Monthly 5000-15000 115 23 Squares Square
Amount 15000-25000 15 3 Between
7.876 4 1.969 1.218 .032
6 Spends for 25000-50000 5 1 Groups
online 50000-75000 15 3 Within
799.924 495 1.616
shopping >100000 15 3 Groups
Total 500 100 Total 807.800 499
Chatbots 70 14
Visual Search 95 19 Inference:
AI Voice Since the Sig. value .032 < 0.05, hence rejecting the
Technology assistant 135 27 hypothesis at a 5% level of significance. Therefore,
7 usage while search there is a significant influence exists in consumer
online Personalized buying behaviour using AI in Ecommerce sectors.
180 36
shopping ads
Other 20 4
Total 500 100
7.2 One-way ANOVA

Objectiv 2: To identify the difference in consumer

Based on the education of respondents, 5 (1%) have
purchase patterns after the integration of AI.
school or equivalent level, 305 (61%) belongs to
H0: There is no significance in consumer purchase
Bachelor’s or Diploma degree as their level of
patterns after the integration of AI.
education, 145 (29%) are Master’s degree holders and
Level of Significance: α = 5%
45 (9%) are Professional degree as their level of

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 Ramya & Karthikeyan, A study on the usage of artificial intelligence technology in influencing consumer buying
behaviour with special reference to online shopping
ANOVA 8. FINDINGS
Sum of df Mean F Sig.
Squares Square Findings are:
Between • (59%) Most of the respondents belong to the
6.152 3 2.825 2.031 .004
Groups Male category for online shopping with AI.
Within • (58%) Most of the respondents belong to the
801.637 496 2.516
Groups
age of 18-24.
Total 807.789 499
• (61%) The majority of the respondents are
bachelor’s degrees.
Inference:
• (30%) Most of the respondents belong to
Since the Sig. value .004 < 0.05, hence rejecting the
Education Industry.
hypothesis at a 5% level of significance. Therefore,
there is a significance in consumer purchase patterns • (18%) The majority of the respondents belong
after the integration of AI. to 25000-49999.
• (43%) Most of the respondents faced product
7.3 Correlation quality issues.
• (45%) Most of the respondents prefer Mobiles
H0 and Electronics in online shopping.
1. There is no association between Gender and • (43%) Most of the respondents spend 3 to 6 hrs
Hours spending of surfing about the product on the Internet.
before buying. • (86%) The majority of the respondents less
2. There is no association between frequency of than 2 hr for their online shop.
purchase online and items prefer to purchase • (61%) The majority of the respondents spend
through online. less than 2 hrs surfing the product.
Level of significance: α = 5% • (36%) Most of the respondents purchase online
once a month or every 3 months once.
Correlations • (67%) The majority of the respondents spend
Hrs* Gender less than 5000 for online shopping per month.
Pearson • (36%) Most of the respondents used
1 .088
Correlation personalized ads as one of the AI technologies.
Hrs*
Sig. (2-tailed) .048
N 500 500 From one-way ANOVA, we find there is a significant
Pearson influence exists in consumer behaviour buying using AI
.088 1
Correlation in E-commerce sectors.
Gender
Sig. (2-tailed) .048
N 500 500 9. SUGGESTION

Correlations Most of the respondents belong to the age group of 18-

Item.Prefer Freq.Purchase 24. This age group of customers is using AI technology
Pearson based on tools and is influenced to purchase through
1 .124
Correlation online platforms. The remaining age groups can be
Item.Prefer concentrated and the awareness of using of AI
Sig. (2-tailed) .006
N 500 500 technology will be easy for other age categories.
Pearson
.124 1
Correlation Most of the respondents come across personalized Ads
Freq.Purchase
Sig. (2-tailed) .006 while doing online shopping. Few respondents are
N 500 500 utilizing Voice Assistants, Visual Search, Chatbots, and
other interesting tools, exploring and enjoying new
Inference: ways of online shopping with the utilization of AI
1. Since sig. value .048 < 0.05, hence reject the technology. So awareness of these technologies can be
hypothesis at 5% level of significance i.e. created through Social Media platforms. Businesses
There is an association between Gender and may be able to increase customer retention through
Hours spending of surfing about the product targeted outreach and marketing.
before buying.
2. Since sig. value .006 < 0.05, hence reject the The majority of tasks can be completed with the least
hypothesis at 5% level of significance i.e. amount of human involvement feasible because of AI’s
There is an association between frequent of seamless automation. This includes activities like
purchase online and items prefer to purchase setting up email reminders, managing customer
through online. relations, making suggestions, etc.

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 Proceedings on Engineering Sciences, Vol. 06, No. 1 (2024) 13-20, doi: 10.24874/PES06.01.002

By gathering information about customers and Assistants are used by consumers for gathering product-
leveraging the insights to expedite the sales process, AI related information, searching the product, and higher-
in online shopping also enhances sales. Customers can touch customer support. AI and consumer behavior are
be engaged with AI Chatbots to advance them through well connected and they offer good insights. Also, AI is
the sales process. instrumental in collecting a large amount of data and
analyzing the purchase pattern of consumers, buyer
10. CONCLUSION focus, and target marketing strategies. The many
benefits that AI in online shopping offers are crucial,
Artificial Intelligence plays a divergent role in and they range widely. Businesses will flourish, from
marketing automation and strategically providing everyday work optimization to improved promotion.
opportunities to companies. The analysis found that AI ECommerce businesses are becoming more interested in
tools influence and change consumer buying behavior. implementing AI to enhance both their internal
Chatbots, Personalized Ads, Visual search, and Voice operations and the customer experience.

References:

Manjula, S. (2021). The Impact of Artificial Intelligence Consumer Buying Behaviors (2021). International journal of
creative research thoughts, 9(9), 105-109.
H. Mussa, M. (2020). The impact of artificial intelligence on consumer behaviors an applied study on the online
retailing sector in egypt. 318–293 ,(4)50 ,‫اﻟﻤﺠﻠﺔ اﻟﻌﻠﻤﯿﺔ ﻟﻺﻗﺘﺼﺎد و اﻟﺘﺠﺎرة‬. https://doi.org/10.21608/jsec.2020.128722
Nadimpalli, M. (2017). Artificial intelligence–consumers and industry impact. International Journal of Economics &
Management Sciences, 6(03), 4-6.
Shyna, K., & Vishal, M. (2017). A Study on rtificial Intelligence in E-Commerce. International Journal of Advances in
Engineering & Scientific Research, 4(4), 62-68.

K. Ramya K. Karthikeyan
Department of Management Sciences Department of Management Sciences
PSG College of Arts & Science PSG College of Arts & Science
ORCID 0009-0000-6597-236X ORCID 0009-0004-8275-3889

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 Ramya & Karthikeyan, A study on the usage of artificial intelligence technology in influencing consumer buying
behaviour with special reference to online shopping

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