Products Labeled ‘AI Powered’ Could Alienate Consumers, Study Finds

Even as technology companies pour billions of dollars into artificial intelligence, products labeled “AI Powered” could turn people away, new research suggests. 

A study published in the Journal of Hospitality Marketing & Management in June found that describing a product as using AI lowers a customer’s intention to buy it. 

“We looked at vacuum cleaners, TVs, consumer services, health services,” Dogan Gursoy, one of the study’s authors and a professor of hospitality business management at Washington State University, told CNN. “In every single case, the intention to buy or use the product or service was significantly lower whenever we mentioned AI in the product description.” 

The study suggests that consumers are hesitant to incorporate artificial intelligence into their daily lives, despite AI’s rapid advancement in recent months. But even before the AI-chatbot ChatGPT burst into public consciousness in 2022, artificial intelligence technology was being used in familiar digital services such as text suggestions on smartphones and Netflix’s algorithm for recommending movies.

Fear of the unknown and concerns about data security may help explain public resistance to products that use AI. “People have worries about privacy,” Gursoy said. “They don’t know what’s going on in the background, the algorithms, how they run….” 

Lack of transparency could sour consumer perceptions toward brands they formerly trusted, Gursoy said. He cautions companies against using the AI tag without explaining the technology’s benefits.

Brands need to create the right messages, he said. “Rather than simply putting ‘AI powered’ or ‘run by AI’ [on products], telling people how this can help them will ease the consumer’s fears.”