Combine personalisation with Gen AI to support customers, study says

Generative AIs like ChatGPT can be used to help customers make decisions when faced with ‘choice overload’, according to a study led by Professor Changju Kim from College of Business Administration, Ritsumeikan University, Japan.

According to the study, choice overload occurs when a person is overwhelmed by the number of options while making decisions. For consumers, this may lead to dissatisfaction with their choices.

With the growth of large language model such as OpenAI’s ChatGPT – and as the conversational AI race becomes more tense between competitors like Google and Microsoft – Professor Kim, alongside a team of researchers, wanted to see if users felt ‘choice overload’ if a chatbot was the one providing multiple options.

After five studies, undertaken between February and March 2023, researchers found that consumers preferred a large number of recommendation options from the bot – such as 60 or 70 – and their intent to purchase increased with the number of options.

Participants viewed the information provided by the chatbot as accurate and trustworthy and said they’d prefer receiving a number of suggestions from ChatGPT instead of a human or online travel agent, for example.

The study suggested that businesses can leverage a customer’s trust in the information provided by ChatGPT and offer consumers multiple options without the fear of negatively impacting their decision-making.

Researchers also suggested that chatbots could be useful for such functions in sectors such as tourism and online shopping, especially if developers can design customised, user-friendly recommendation systems that match the needs and preferences of the consumers.

Professor Kim said: “ChatGPT represents a significant advancement in the field of recommendation systems, as it recommends products, services, places, people, or any other solutions that align better with the needs and preferences of consumers.”

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