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Chapter one


1.1 Background for the Study

Artificial intelligence (AI) has revolutionised many parts of human existence, including how people shop online. In recent years, the e-commerce business has expanded dramatically, with consumers increasingly relying on digital channels to make purchases.

This shift in customer behaviour has been influenced, in part, by the incorporation of AI technology into the online buying experience. AI-powered platforms like recommendation systems, chatbots, and personalised marketing have changed how customers interact with online merchants (Du & Xie, 2021).

These improvements have prompted issues regarding how AI influences customer awareness and buy intention in the context of online commerce.

The rise of AI in e-commerce has resulted in a fundamental shift in how customers traverse online marketplaces. As AI algorithms advance, they will be able to make personalised product recommendations, engage in natural language discussions with customers, and forecast consumer preferences (Ahn & Park, 2022).

This level of personalisation has a significant impact on consumer attitudes and behaviours. AI-powered recommendation systems, for example, are intended to analyse consumer data and behaviour in order to offer products that match the individual’s tastes, improving the possibility of purchase (Bhattacherjee, 2012).

These individualised suggestions not only improve the shopping experience, but also increase purchase intention since customers believe their wants and preferences are being met (Chang & Wildt, 2020).

This demonstrates the importance of AI in changing consumer sentiments and purchasing decisions in the online retail environment.

Chatbots, another AI-powered tool, have become essential for facilitating online commerce transactions (Hernandez, Jimenez, & Martin, 2020). These AI-powered virtual assistants may offer real-time assistance and respond to client inquiries, resulting in a more smooth shopping experience.

When customers believe their issues are being answered quickly and effectively, their trust and overall attitude towards the online shop improves (Appelman and Sundar, 2016). Furthermore, the convenience and efficiency of chatbots can increase purchase intent by lowering the perceived effort of purchasing online (Cooper, Crano, & Forgas, 2020).

The use of chatbots in e-commerce highlights how AI not only improves consumer interaction but also helps to shape their opinions and purchasing intentions.

In addition to recommendation systems and chatbots, personalised marketing methods powered by AI are becoming more common in the e-commerce sector (Euchner, 2023). AI can customise marketing content, offers, and promotions based on customer data and activity, ensuring that they resonate with the specific shopper (Hansen, 2018).

This level of personalisation has been shown to be successful in catching consumer attention and cultivating a more positive attitude towards the company and its products (Bosnjak, Ajzen, & Schmidt, 2020).

When consumers get relevant and focused marketing communications, they are more likely to have a favourable attitude and purchase intent (Casse, Fournier, Dubois, & Tanner, 2020). This demonstrates the importance of AI in influencing consumer attitudes and behaviours in the online buying environment.

AI’s impact on consumer behaviour in e-commerce extends beyond personalised encounters. AI can also predict consumer preferences and trends, allowing merchants to tailor their product offerings (Gielens and Steenkamp, 2019).

By analysing large datasets, AI can predict which products are likely to gain market traction, allowing merchants to adjust their inventory and marketing tactics accordingly. Consumers are more likely to make purchases when they discover products that match their current interests or trends, which increases their purchase intention (Chen, Hsu, & Lin, 2020).

This predictive element of AI benefits businesses while also favourably influencing consumer attitudes and intentions in the online buying environment (Dwivedi et al., 2023a).

The use of AI technology into e-commerce has substantially altered the landscape of online buying, offering customers tailored product recommendations, responsive chatbot interactions, and personalised marketing methods.

These improvements have a significant impact on customer attitudes and purchasing decisions. As artificial intelligence evolves and becomes more sophisticated, businesses and researchers must grasp and capitalise on its promise.

AI can help inform marketing tactics, improve the online purchasing experience, and increase customer satisfaction and loyalty. The convergence of AI with e-commerce is a dynamic and disruptive field that will continue to influence how consumers interact with online businesses and their products (Dwivedi et al., 2023b).

1.2 Statement of the Problem

The incorporation of Artificial Intelligence (AI) into the field of e-commerce has heralded a new era of online purchasing, with substantial ramifications for consumer behaviour.

While the impact of AI on the online shopping experience is clear, the precise implications on consumer awareness and purchase intention are still a source of worry.

Consumer awareness is an important aspect in online shopping decision-making (Ahn & Park, 2022). AI-powered recommendation systems and personalised marketing techniques aim to increase consumer awareness by offering relevant product information and offers (Davenport et al., 2019). However, the impact of these AI-driven efforts to raise consumer awareness is not entirely established.

Furthermore, the impact of AI on buying intentions is a major problem. Chatbots and personalised marketing initiatives are designed to improve consumers’ propensity to purchase (Hernandez, Jimenez, & Martin, 2020).

The extent to which AI technologies successfully improve purchase intention in an online purchasing scenario warrants additional investigation.

Furthermore, there is an increasing need to evaluate the ethical implications of AI in online buying (Du & Xie, 2021). The use of AI algorithms to forecast customer behaviour and preferences raises concerns about data privacy and the limits of personalised marketing (Horowitz & Kahn, 2021).

The problem statement revolves around the need to completely understand how AI influences customer awareness and purchase intention in the context of online commerce.

This understanding is critical for firms looking to use AI to better their marketing tactics, as well as researchers looking to fathom the complexity of consumer behaviour in the digital marketplace.

Furthermore, the ethical concerns of AI-driven online buying must be investigated because they affect consumer trust and pleasure (Du & Xie, 2021). Addressing these concerns is critical to ensuring that AI technologies enhance the online shopping experience while protecting consumer privacy and preferences.

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