Why Your Brand Should Steer Clear of This Buzzword: It’s Turning Customers Away

• A recent study shows that labeling products as “AI-powered” can actually decrease consumer interest.
• Issues of cognitive and emotional trust, as well as concerns about data privacy and transparency, contribute to skepticism about AI.
• Effective communication highlighting AI’s benefits and addressing privacy concerns is crucial for improving consumer acceptance.

Although tech companies have poured billions of dollars into artificial intelligence (AI) and proclaiming it as the next big technology, a new research has revealed it is possible that using the “AI” label might not attract consumers as we’d like. A study published in the Journal of Hospitality Marketing & Management, reveals that simply adding “AI” in a product description could actually decrease customers’ interest in purchasing the product.

What the Study Found

The study, conducted by one of the study’s authors, Dogan Gursoy, Taco Bell Distinguished Professor of hospitality business management at Washington State University examined how using the “AI” label affects consumer behaviors. People were exposed to various items–such as televisions, vacuum cleaners and medical services with the descriptions highlighting the items in terms of “high tech” or “AI-powered.” The result was that items with”AI” or “AI” labels were less likely to be purchased when compared to products classified by the term “high tech.”

This unexpected result reveals an increasing skepticism among consumers with regards to integrating AI into their lives while technology continues to advance and integrate into everyday life.

Why Trust and Transparency Matter

1. Cognitive Trust: The High Expectations of AI

Cognitive trust refers to the idea that AI is able to function flawlessly since it’s a computer, and that it is not susceptible to human error. If AI systems do not meet these lofty expectations, trust could be eroded quickly. Google’s AI-generated search results system was criticized last year for providing inaccurate or confusing details for user’s questions. These errors can seriously undermine the trust of consumers, particularly in situations where people are expecting AI to perform flawlessly.

2. Emotional Trust: The Fear of the Unknown

A lot of people aren’t aware of the inner workings of the AI and instead depend on emotional trust in order to formulate opinions about technology. The fear of the unknown is another major factor. Prior to the launch of ChatGPT in 2022, many people were unaware of AI although it had already been incorporated into numerous technologies, such as the autocorrect feature on smartphones as well as Netflix’s recommendations for movies. The public’s understanding of AI’s importance does not always translate into faith. Additionally, media and films tend to depict robots as villains and this can affect what people think of AI. The sensationalized portrayals can create doubt and fear, obscuring the real advantages AI could bring.

3. Transparency: Concerns Over Data Privacy

Transparency is a different issue. A lot of consumers are concerned about the manner in which companies manage their personal data. They do not understand what is going on in the background of the algorithms. The depth and complexity of AI algorithms may make individuals concerned about where their data will be used and the way it’s used. In the process of bringing regulators the pace of AI technologies, absence of clear rules and transparent processes will make it difficult for consumers to purchase new AI-powered devices.

Beyond the Buzzword: How to Make AI Relatable and Trusted

If a company is trying to sell an AI product, the main issue is how they convey the advantages of AI. Just stating a product is “AI-powered” might not be enough to convince people who are skeptical. Businesses should instead be able to explain the way in which AI enhances user experience while also addressing privacy issues clearly and in a transparent manner.

A good communication strategy should emphasize advantages that are practical and offer clear details about managing data. When they tackle these issues directly businesses can establish trust and make AI-powered solutions more attractive.

Conclusion

While AI is advancing and improving, knowing how people think about it is essential for companies in the field of technology. Recent research has revealed that there is a huge gap between the enthusiasm within the field of technology and the doubts among the general people. In order to overcome this gap firms must be focused on building confidence through honest and clear communication. Through this approach they will be able to better market their AI products, and open the way to a greater acceptance of this groundbreaking technology.