AI-DRIVEN PERSONALIZATION IN ONLINE RETAIL: An Interpretivist Study on Gen Z's Perceived Trust, Autonomy, and Purchase Intention

Sammanfattning

This research investigates Generation Z consumers’ views on AI-drivenpersonalized recommendations in online retail and how this personalization affectstheir purchase intentions, consequently, the online retailer’s business. Thisgeneration, which has grown up surrounded by technology, will become the largestconsumer group in the world by 2029. AI has revolutionized the customerexperience through algorithmic personalization, but what does this mean forconsumers? Although Generation Z consumers have high digital literacy and valuepersonalization, they also live with constant privacy risks, juggling data trade-offsand manipulation. Therefore, the purpose of this study is to explore how Generation Z views personalized recommendations in online retail as helpful, intrusive, ormanipulative by applying the Stimulus-Organism-Response model (S-O-R) as theprimary lens and Self-Determination Theory (SDT) as the moderating lens. Weexamine how AI-driven personalization acts as an external factor that triggers andinterferes with Generation Z autonomy and trust. When psychological dimensionsare understood, the study explores how they affect purchase intention. The study follows a qualitative, interpretivist, and mixed inductive and deductive approach. This research gathered empirical data through semi-structured interviewswith 12 Generation Z consumers from 11 different countries. Further, this empiricaldata was analyzed through thematic analysis to identify patterns within our theoretical frame of reference. The findings show that AI-driven personalization is perceived as helpful, making the Generation Z consumer shopping experience as easy as possible. But they also expressed high levels of concerns about their privacy, surveillance, and manipulation, as well as loss of control. Nudging and overstimulation cannegatively influence trust and autonomy, which are independent and interconnectedemotional and psychological processes that together shape purchasing behavior.Therefore, autonomy-supporting AI features positively influence purchaseintention, whereas hyper-nudging and AI intrusiveness negatively impact it.