ETHICAL AI IN MARKETING: HOW AI BIAS AFFECTS CONSUMER TRUST AND ECONOMIC OUTCOMES

The retail sector has undergone significant transformation through artificial intelligence (AI) adoption, enabling enhanced personalization and operational effectiveness.However, this rapid technological integration has introduced critical ethical considerations, particularly regarding consumer data protection and equitable treatment.This investigation explores the ethical dimensions of retail AI applications, examines methods for maintaining competitive advantage while upholding ethical standards, and proposes practical implementation guidelines.The study employed a quantitative survey methodology, collecting responses from 300 e-commerce platform users.Analytical methods included descriptive statistical techniques incorporating percentage distributions and mean value calculations.Key findings indicate substantial consumer apprehension regarding data collection practices in AI-enhanced retail, with widespread skepticism about corporate data management.Issues of algorithmic fairness emerged prominently, with most participants perceiving systemic biases in AI decision-making.The research demonstrates that competitive business outcomes can coexist with ethical AI practices when proper safeguards are implemented.Critical areas requiring attention include transparent data practices and continuous algorithmic oversight.The study concludes with specific recommendations: implementing clear AI decision pathways, establishing routine bias evaluation protocols, incorporating user perspectives in system development, and prioritizing robust data security measures.