CONSUMERS PERCEPTION AND EXPERIENCE ON AI APPLICATIONS.pptx

CONSUMERS PERCEPTION AND EXPERIENCE ON AI APPLICATIONS AND TECHNOLOGIES

1. CONSUMERS PERCEPTION AND EXPERIENCE ON AI APPLICATIONS AND TECHNOLOGIES RHEA S. CALVO, MSCS BSIT Program Head/ Research Director Fellowship Baptist College

2. Introduction The Impact of AI on Consumer Behavior Building Trust with Consumers in the Age of AI The Future of AI and Consumer Experience OUTLINE

3. Introduction What is AI and how is it used by consumers today? Why is it important to understand consumer perception of AI?

4. What is AI and how is it used by consumers today? S imulation of human intelligence processes by machines, particularly computer systems . In the current consumer landscape, AI is extensively utilized to enhance customer experiences (Ameen, Tarhini , Reppel , & Anand, 2021). E xamples: Virtual assistants like Siri and Alexa, P ersonalized recommendation systems on e-commerce platforms, C hatbots for customer service, and P redictive analytics for targeted marketing campaigns

5. How is AI used by consumers today? Firstly, as AI technology becomes more prevalent in consumer interactions, it is essential for businesses to comprehend how customers perceive and interact with AI-powered services to ensure a positive user experience (Chabot, 2022). Secondly, trust plays a significant role in AI-powered experiences, as customers may feel uncertain or confused about AI technology. Building trust with consumers is fundamental to overcoming these challenges and fostering positive relationships (Ameen et al., 2021).

6. How likely are you to trust a business that uses AI? Forbes Advisor survey  conducted in July 2023

7. How much do you trust companies to use AI responsibly? Pew Research  survey  conducted in May 2023

8. What is AI and how is it used by consumers today? Lastly, by understanding consumer perceptions of AI, businesses can tailor their AI-powered services to meet customer expectations, enhance convenience, and address potential concerns such as privacy, ethics and personalization (Chabot, 2022).

9. Personalized Recommendations and Shopping Experiences: AI-powered recommendation systems can analyze vast amounts of customer data, such as purchase history, browsing behavior, and preferences, to provide highly personalized product recommendations and tailored shopping experiences (Baier & Stüber , 2019; Jannach et al., 2021). This enhances customer satisfaction and increases the likelihood of making a purchase. Conversational Commerce and Virtual Assistants: AI-powered virtual assistants and chatbots enable conversational commerce, allowing customers to interact with businesses through natural language and voice commands ( Kowatsch et al., 2017; Vaziri et al., 2021). This enhances the shopping experience by providing personalized assistance, product recommendations, and customer support. The Impact of AI on Consumer Behavior

10. Augmented and Virtual Reality Shopping Experiences: AI-powered augmented reality (AR) and virtual reality (VR) technologies are enhancing the shopping experience by allowing consumers to virtually try on products, visualize products in their homes, or explore virtual showrooms ( Caboni & Hagberg, 2019; Poushneh , 2018). This provides a more immersive and engaging shopping experience. The Impact of AI on Consumer Behavior

11. In a study of [T2; Tulcanaza -Prieto, A.B., Cortez- Ordoñez , A., & Lee, C.W. (2023). Influence of Customer Perception Factors on AI-Enabled Customer Experience in the Ecuadorian Banking Environment]AI is revolutionizing the way consumers shop and interact with businesses in various ways: Prevention of credit card fraud and money laundering : AI algorithms analyze customer behavior, location, and purchasing habits to enhance security in online transactions Identification of investment opportunities : AI enables intelligent investment systems to manage information efficiently, helping investors build solid portfolios with less time and resources 19. Personalized banking services : AI-powered chatbots and mobile apps offer immediate solutions and personalized financial advice, leading to faster decisions and transactions 19. Enhanced customer experience : AI technology in the banking sector provides fast responses, customized attention, and tailored content to meet customer demands 19. These advancements in AI technology are reshaping the way consumers shop and interact with businesses, offering personalized experiences, improved security, and efficient services. The Impact of AI on Consumer Behavior

12. Are the following uses of AI acceptable or unacceptable? Pew Research  survey  conducted in May 2023

13. KEY STRATEGIES: 1. Transparency: Consumers appreciate openness about how AI is used. Businesses should clearly explain the data collected by their AI applications, how it's processed, and the algorithms employed (Wright, 2023). This transparency fosters trust and empowers consumers to understand how AI impacts their experience (Chen et al., 2023). 2. Data Privacy and Security: Robust data privacy and security measures are essential for building trust. Businesses should adhere to data protection regulations (like GDPR or CCPA) and implement best practices to safeguard consumer data (Xu et al., 2022). Consumers need to feel confident that their personal information is secure when interacting with AI applications. Building Trust with Consumers in the Age of AI

14. The use of AI poses a significant threat to privacy

15. The increased use of AI in daily life makes me feel... Pew Research  survey  conducted in May 2023

16. 3. Ethical Use of AI: Consumers are increasingly concerned about the ethical implications of AI. Businesses should demonstrate responsible use of AI, ensuring applications do not discriminate, violate privacy rights, or engage in biased practices (Jobin et al., 2022). Ethical AI development fosters trust and promotes responsible innovation. 4. User Education: Educating consumers about AI can alleviate concerns and misconceptions. Businesses can provide clear information and resources to help users understand how AI works, its benefits, and limitations (Luo et al., 2024). Knowledge empowers consumers and fosters trust in the technology. 5. Feedback and Communication: Encouraging user feedback and actively listening to concerns demonstrates a commitment to customer satisfaction. Open communication channels help businesses identify and address issues that erode trust (Huang & Liu, 2022). Building Trust with Consumers in the Age of AI KEY STRATEGIES:

17. 6. Accountability and Explainability : When AI decisions impact consumers, it's crucial to establish accountability and explainability . Businesses should develop mechanisms to explain how AI arrives at decisions, allowing consumers to understand the reasoning behind recommendations or actions (Miller, 2023). This transparency builds trust and empowers users to challenge potentially unfair or biased outcomes. 7. Human Oversight and Control: While AI automates tasks, maintaining human oversight is vital for trust. Businesses should ensure human involvement in critical decision-making processes and have mechanisms for users to escalate concerns or request human intervention when interacting with AI applications (Manyika et al., 2023). This balance between automation and human control reassures consumers that AI is a tool to enhance experiences, not replace human judgment. Building Trust with Consumers in the Age of AI KEY STRATEGIES:

18. 8. Right to Opt-Out and Control: Consumers should have control over their interactions with AI. Businesses should offer clear opt-out options for AI-powered features and provide mechanisms for users to manage their data and privacy settings ( Mittelstadt et al., 2022). Empowering consumers with control choices builds trust and fosters a sense of agency in their interactions with AI technology. Building Trust with Consumers in the Age of AI KEY STRATEGIES:

19. AI can perpetuate societal biases and discrimination present in training data, leading to biased outcomes in areas like lending, job recommendations, and product suggestions. Mitigating bias through diverse datasets and fairness metrics is crucial (Jobin et al., 2022). Collecting and analyzing consumer data for AI raises privacy violation and data security risks. Following data regulations like GDPR, implementing robust security, and being transparent about data practices builds trust (Xu et al., 2022). Many AI decision processes lack transparency, making it hard for consumers to understand how conclusions are reached. Developing explainable AI models allows users to understand the reasoning (Miller, 2023). Clear accountability mechanisms are needed when AI negatively impacts consumers, allowing them to challenge biased outcomes (Huang & Liu, 2022). Ethical Concerns on the Use and Application of AI

20. AI automation raises job displacement concerns. Businesses should plan strategies for reskilling or upskilling workforces (Manyika et al., 2023). AI risks enabling consumer deception through deepfakes or manipulative content. Transparency about AI-generated media and responsible use is key ( Mittelstadt et al., 2022). AI personalization can reinforce existing biases or create "filter bubbles," limiting diverse perspectives. Promoting algorithmic neutrality is important (Jobin et al., 2023). Overreliance on AI for decisions could erode human autonomy. Maintaining human oversight and user control over AI interactions preserves agency (Manyika et al., 2023). To build consumer trust, businesses must prioritize ethical AI focusing on fairness, privacy, transparency, accountability, and preserving human autonomy (Jobin et al., 2022; Jobin et al., 2023). Ethical Concerns on the Use and Application of AI

21. Hyper-Personalization with Explainable AI AI will move beyond basic personalization to create hyper-personalized experiences tailored to individual needs and preferences in real-time (Kumar et al., 2022). However, transparency will be crucial. Businesses will need to develop explainable AI models that allow consumers to understand how personalized recommendations or actions are generated, fostering trust and user control (Miller, 2023). Rise of Conversational AI and Voice Assistants Conversational AI and voice assistants will become increasingly sophisticated, blurring the line between human and machine interaction ( Ponzetto & Shmueli , 2022). Consumers will be able to interact with businesses seamlessly through voice commands, offering a more natural and intuitive user experience. FUTURE OF AI

22. FUTURE OF AI Develop Explainable AI Communication Strategies Businesses need to communicate effectively about their use of AI. This includes informing consumers about how AI personalizes experiences, while also addressing ethical considerations and potential biases. Transparency builds trust and empowers consumers ( Mittelstadt et al., 2022). Upskilling the Workforce for AI Integration As AI automates tasks, businesses must invest in reskilling and upskilling their workforce to adapt and collaborate effectively with AI systems (Manyika et al., 2023). This will ensure a smooth transition and empower employees to leverage AI for greater efficiency and value creation. By embracing these trends and actively preparing for the future of AI, businesses can leverage its potential to enhance customer experiences, build trust, and achieve a competitive advantage in the evolving marketplace.

23. Consumers/Customers Benefits Enhanced personalization through recommendations and tailored shopping experiences. Improved convenience with conversational commerce and virtual assistants. Immersive shopping experiences with AR and VR technologies. Challenges Potential privacy concerns and data security risks. Ethical considerations like bias, discrimination, and lack of transparency in AI decisions. Need for education and awareness about AI to alleviate concerns and misconceptions. Implications of AI for Various Stakeholders

24. Businesses Benefits Enhanced customer experiences and engagement through AI-powered personalization, virtual assistants, and immersive technologies. Improved efficiency and cost savings through automation and AI-driven processes. Challenges Prioritizing ethical AI development (fairness, transparency, explainability ). Implementing robust data privacy and security measures. Developing effective communication strategies to educate consumers and address concerns. Investing in reskilling and upskilling the workforce for AI integration. Implications of AI for Various Stakeholders

25. Employees Challenges Potential job displacement due to AI automation, necessitating reskilling and upskilling. Need to adapt and collaborate effectively with AI systems. Benefits Opportunity to leverage AI for increased efficiency and value creation in their roles. Importance of understanding the ethical implications of AI and ensuring responsible use. Policymakers and Regulators Challenges Developing and implementing regulations for ethical considerations, data privacy, and security related to AI. Ensuring fair and unbiased AI systems without discrimination. Potential impact of AI on employment, requiring policies for workforce transition and retraining Implications of AI for Various Stakeholders

26. Academic institutions may contribute in the following key areas: Ethical AI Development Conduct research on ethical AI principles for fairness, transparency, and explainability . Develop educational programs in AI ethics and responsible AI development. Innovation in AI Solutions Drive research in cutting-edge AI areas like explainable AI and human-computer interaction. Collaborate with businesses to create innovative AI solutions for consumer experiences. Societal Impact of AI Study the social and economic impact of AI on employment and education. Engage in public discourse to provide clear information about AI capabilities and limitations. Next Generation of AI Experts Integrate AI education into various disciplines in the curricula. Encourage interdisciplinary collaboration for a holistic approach to AI development.

27. Proverbs 18:15  "The heart of the discerning acquires knowledge, for the ears of the wise seek knowledge." (NIV) Thank you.