The Impact of AI-Powered Personalization on Consumer Purchasing Behavior in the E-commerce Landscape

The objective of the present research is to investigate how AI-driven personalization strategies affect consumer purchase decisions in e-commerce contexts. With the rise of online retailers increasingly relying on AI algorithms for the sake of personalization of product recommendations, pricing, and user experience, an essential understanding of such business implications is at hand. This research combines large-scale transactional data analytics with in-depth consumer surveys using a mixed-methods approach to identify how AI personalization affects important business metrics: conversion rates, average order value, and customer loyalty. These results reveal that, by the power of AI, personalization significantly enhanced the e-commerce shopping experience and resulted in a substantial rise in conversion rates-15%-and average order value-12%-across various product categories. Despite there being reason for optimism over this technology, potential drawbacks revealed in the research include privacy concerns and echo chambers that may inhibit product discovery. The study concludes by articulating a suggested framework for Ethical AI personalization that would balance business objectives with consumer trust and autonomy. It provides valuable insights for e-commerce practitioners and policymakers navigating the evolving digital retail landscape. DOI - https://doi.org/10.65525/SVUP.9788199651500.2026.40-60.