PERSONALIZING CUSTOMER EXPERIENCE THROUGH ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING IN E-COMMERCE: HOW TECHNOLOGY ENABLES COMPANIES TO DELIVER INDIVIDUALIZED SHOPPING EXPERIENCES

Faruk Unkić ()

BH Ekonomski forum, 2026, vol. 1, issue 22, 31-55

Abstract: This paper explores the transformative impact of artificial intelligence (AI) and machine learning (ML) on customer experience personalization in the e-commerce sector, aiming to enhance customer engagement and foster long-term loyalty. The research focuses on quantifying the effects of AI-powered recommendation systems and dynamic pricing on overall business performance, including—though not limited to—conversion rates, average order value, and customer lifetime value (CLV). A central question is how to balance technologically advanced offer personalization with the ethical implications of potential privacy violations. The methodology applies a mixed-methods approach, combining quantitative analysis of business purchase data (using a simulation model to assess the impact of recommendations on sales metrics) with qualitative insights from a user survey on attitudes toward personalized content. The survey emphasizes perceptions of AI service quality and associated privacy concerns. Findings indicate that accurate AI-driven personalization significantly improves key business outcomes, particularly in enhancing CLV. However, the results also highlight the need for strict ethical standards and transparency in handling user data. The paper concludes that continuous monitoring and adaptation of personalization strategies are essential for sustaining growth and maintaining a competitive edge in the global e-commerce landscape.

Keywords: Personalization; E-commerce; Artificial intelligence; Machine learning; User experience. (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:etl:journl:106

DOI: 10.62900/BHEF262201002

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