Influence of AI Personalisation on E-commerce customer experience and purchase decisions in South Africa

Abstract

Covid-19 has underscored the importance of organisations to invest in E- commerce for sustainability and has accelerated E-commerce adoption globally and in South Africa. E-tailers need to look beyond product catalogues and competitive pricing and promotions for differentiation and look towards providing superior customer experience for competitive advantage. Artificial Intelligence is a transformational technology that can be harnessed for enhanced personalised interactions and customer experience in E-commerce. The study investigates Artificial Intelligence (AI) capabilities that enable personalisation features in E-commerce, and examines how the Perceived Usefulness, Perceived Ease of Use, Relative Advantage and Voluntariness of Use of AI personalisation features in this medium influence Customer Experience, Purchase Intention, Repeat Purchases Intention and Loyalty. An online survey was conducted with local online shoppers to gather their feedback on the use of AI-enabled personalisation features on E-Commerce. Factor analysis including Exploratory factor analysis (EFA), Confirmatory Factor analysis (CFA) and Structural Equation Modelling (SEM) was used to analyse the results. The results indicate that both Relative Advantage and Voluntariness of Use of AI personalisation in E-commerce, positively and significantly influence Customer Experience as well as customer Purchase Decisions. Perceived Ease of Use positively influences customer experience and negatively influences purchase decisions, although both effects are insignificant. Finally, Perceived Usefulness is found to have a negative, albeit insignificant influence on both Customer Experience and Purchase Decisions. These findings contribute a South African perspective on understanding customer perceptions of AI personalisation applications in E-Commerce.