Stimulating or Intimidating: The Effect of AI-Enabled In-Store Communication on Consumer Patronage Likelihood

Artificial intelligence (AI) has penetrated the marketing landscape and is having a profound impact on businesses' communication strategies. With AI coming under the spotlight, we know surprisingly little about its impact on consumers' patronage likelihood. This research attempts to address this void by investigating the "just-walk-out" retail technology in cohort with in-store communication. Across three studies, conducted online and in the field, the authors demonstrate that, compared to self-service checkouts, AI-enabled checkouts lead to significantly higher consumers' patronage likelihood. Furthermore, sensory stimulation stemming from in-store communication (environmental cues including assortment, advertising, and technology) underlies this impact. Importantly, the extent to which consumers perceive AI technology to be threatening is revealed as a boundary condition to these effects. These findings advance our understanding of how AI-enabled checkouts and in-store communication influence consumers' patronage likelihood and the boundary condition that moderates their impact.