Does the term “AI product” harm a product’s sales rather than help them? A recent study published in Journal for Hospitality Marketing & Management examined the impact of using the term “artificial intelligence” in marketing materials for consumer-facing products such as televisions, cars, and smartphones.

The results showed that the use of the term “artificial intelligence” in product descriptions reduced consumer purchase intent and ultimately had a negative impact on sales.

The hidden factors behind the reluctance to adopt AI products

When consumers purchase a product, especially an expensive item, more is at play than just the idea or fact that the product solves a problem or meets a need in the consumer’s life. Behind the scenes, the buyer is weighing the risk involved in purchasing or switching to this new product. Conscious, subconscious and emotional trust are critical factors in this decision-making process.

While most people agree that AI can have a positive impact on operations and processes, in certain contexts they express fears or are skeptical.

These contexts include situations where they feel their data may be compromised or used in a way they disapprove of, or when moral and ethical issues arise.

AI has been around for decades in the enterprise and consumer space, typically running in the background of the systems and programs we use every day. But it wasn’t until recently, when generative AI tools like ChatGPT gained popularity among consumers, that AI really took center stage.

The popularity of AI among the general public sparked by ChatGPT prompted nearly every company to highlight how they use or plan to use AI. Companies rushed to market their products as “AI-powered” because in the early stages of a new technology cycle, the mere mention of the latest technology tends to boost valuations and attract new investors. Because of this, we saw companies rethink their marketing strategies and instead of just selling computers, phones, and TVs, they started offering AI computers, AI phones, and AI TVs for sale. While we saw the results of these efforts at the investor interest level, we failed to see how effective this AI marketing was in terms of revenue.

The study entitled “Negative effects of disclosing the presence of “Artificial Intelligence (AI)” technology in product and service descriptions on purchase intentions: the mediating role of emotional trust and the moderating role of perceived risk,” examines this topic by comparing the marketing of three items, each sold in two versions: one marketed as “AI-enabled” and the other as “high-tech,” with the items being identical apart from these descriptions.

Study results: AI branding and emotional trust

The study found that using the term “artificial intelligence” in product descriptions reduced purchase intent. A major factor was consumers’ emotional trust in AI, which played a significant role in their decision-making process. This suggests that some consumers do not trust AI on an emotional or subconscious level. The study also found that this emotional trust became even more important for riskier products, such as self-driving cars, than for less risky products, such as AI-powered TVs.

Purchasing a new product requires a risk assessment and, to some extent, trust. When it comes to AI, there is a demographic that is open to technological innovation, but another group believes AI will do more harm than good or poses enough risks to question its usefulness. These concerns typically range from decisions that should require human judgment to fears of data misuse and job loss. Even when purchasing something seemingly unrelated to these concerns, such as a television, these underlying fears can subconsciously influence consumers and make them less willing to purchase AI-branded products.

The backlash against the AI ​​buzzword

Of course, this is just the result of one study, but the results are telling. It’s not uncommon for people to develop an aversion to a word or phrase once it falls into the realm of “buzzwords,” and AI has definitely reached that point.

Ironically, consumers didn’t seem to hesitate to purchase these products before AI became the main selling point, or even when AI was present in a product but wasn’t the highlighted feature. Marketers should consider this data point and dive deeper into it to find out what really gives consumers confidence when shopping and what they look for when making purchase decisions.

As we see in this AI example and even in blockchain in the past, it’s usually not the underlying technology that convinces an audience. In fact, the underlying technology usually causes more problems than it does justice to the item being sold, because not everyone understands the technological basics. Therefore, tech marketing can end up confusing more people than convincing.

It’s important to remember that not everyone is a techie when it comes to innovation. When hearing about revolutionary technology, some people tend to think of dystopian scenarios like the Terminator or Bladerunner rather than a future where technology improves their lives and creates a better world.

For artificial intelligence (AI) to operate compliantly and thrive in the face of growing challenges, it must integrate an enterprise blockchain system that ensures the quality and ownership of data inputs – so that the data can be kept safe while ensuring its immutability. Read CoinGeek’s coverage of this new technology to learn more about why enterprise blockchain will form the backbone of AI.

Attention: AI should “extend” the workforce, not replace it

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