Connecting with Generation Z: Consumer Acceptance of the Use of Artificial Intelligence in Online Shopping

In the civilized era, artificial intelligence (AI) is the imitation of human intellectual functions by machines or computer systems. It is challenging for e-retailers to offer customised discounts despite the unlimited product selection in an online store at the same time, satisfy customers’ expectations while providing a distinctive customer experience. To provide clients with real experiences, recommendations and products must be tailored to their preferences and needs. Therefore, the purpose of this study was to ascertain whether generation Z consumers embrace the use of artificial intelligence (AI) in online buying. This study also aimed to provide recommendations and insights for SMEs to learn more about adopting AI that will enhance their online businesses. For this study, an online survey with quantitative approach is used and gathered 135 respondents. The data were examined by using SPSS version 25. The results of the correlation study showed that each component significantly increases the adoption of AI in online purchasing. The regression research showed that technology literacy has a negative impact on artificial intelligence (AI), while all independent factors (perceived utility, perceived ease of use, and trust) have significant positive impacts on AI (AI). The R² value of the study which is 0.364 indicated good model fit. Due to the AI assistant's constant availability, customers may ask simple questions and report minor difficulties at any time without having to wait for a response. The analysis of client data also helps the online retailer better understand its customers and emerging trends. Thus, advantages like enhanced usability and customisation that satisfy consumer needs and expectations strengthen customer loyalty and boost corporate revenues over the long run.