Understanding How Algorithms Shape Consumer Choices: A Retail Consumer Framework

Abstract

Within the digital era, the retail industry is witnessing a transformation in consumer behavior, mainly driven by Artificial Intelligence (AI) algorithms. This paper presents the "Algorithmic Retail Consumer" framework, a unique approach devised by the author to examine the impact of AI on customer decision-making and customer engagement. The framework examines three essential dimensions: personalized experiences, predictive decision-making, and satisfactory consumer interactions. With the increasing importance of ethics in the implementation of AI technologies, the "Algorithmic Retail Consumer" framework seeks to empower retailers and consumers alike. By identifying key implications and challenges associated with AI implementation, the research promotes responsible AI practices and encourages informed consumer engagement with these technologies. Through its multidimensional approach and real-world case studies from diverse retail sectors, the paper provides practical insights and recommendations to facilitate effective adaptation to AI-driven consumer behavior.