AI is seemingly everywhere, from your tax-prep software to matchmaking apps. But that doesn’t mean that consumers are necessarily on board yet—and companies who don’t tread carefully in describing or disclosing how AI is used or incorporated into a product may end up hurting their bottom lines.
A new study from researchers at Washington State University (WSU), which surveyed more than 1,000 Americans to develop a deeper understanding of the relationship between AI disclosure and consumer behavior, found that when companies mentioned AI in product descriptions, sales fell. Effectively, skeptical consumers, when faced with a choice between an AI-enhanced product and a “dumb” version, may choose “dumber” versions.
“When AI is mentioned, it tends to lower emotional trust, which in turn decreases purchase intentions,” said Mesut Cicek, clinical assistant professor of marketing at WSU and the study’s lead author, in a corresponding press release. “We found emotional trust plays a critical role in how consumers perceive AI-powered products.”
In the study, researchers exposed participants to different product and service categories, with some descriptions of those products or services including references to “artificial intelligence.” In one experiment, a group of participants indicated that they were less likely to purchase a TV that had AI included in the description, constituting a negative response to AI disclosure.
“We tested the effect across eight different product and service categories, and the results were all the same: It’s a disadvantage to include those kinds of terms in the product descriptions,” said Cicek.
He mentioned that the insights may be helpful for marketing teams who are trying to figure out how to use AI to snag more sales. “Marketers should carefully consider how they present AI in their product descriptions or develop strategies to increase emotional trust,” he said. “Emphasizing AI may not always be beneficial, particularly for high-risk products. Focus on describing the features or benefits and avoid the AI buzzwords.”
While consumers may not be sold on the promises of AI yet, investors and big businesses are all in.
AI was front and center in Microsoft’s recent earnings call, with CEO Satya Nadella saying that the company plans to “lead the AI era.” Microsoft is one of many tech companies that is incorporating AI into a plethora of its products and services—a list that also includes Intuit, Atlassian, and Adobe.
Recent data from EY also shows that investors are pouring money into AI, with 95% of senior leaders reporting that their companies are investing in AI, and that there are plans to boost that investment in the next year.
“Nearly all companies are investing in AI, but we’re seeing a divergence between companies experimenting in small ways and those making larger investments, with the leaders who continue prioritizing investments in AI increasingly ahead of the pack and experiencing positive returns,” said Dan Diasio, EY Global Artificial Intelligence Consulting Leader, in an EY release.
Whether those positive returns will continue, though, may be in question as researchers dig deeper into the relationship between consumers and AI—with this most recent study possibly serving up a cautionary signal.