The Convergence of Artificial Intelligence, Consumer Psychology, and Marketing Strategy in the Digital Age
1 Israr Ahmed Qureshi, 2 Shaik Mudassir Ahmed
1Assistant professor, Shadan Institute of Management Studies,
Mail id: israrahmedq@gmail.com
2 Student, Shadan Institute of Management Studies,
Mail id: Skmudassir755@gmail.com
Abstract
The contemporary marketplace is undergoing a profound transformation driven by the convergence of data science, cognitive psychology, and marketing strategy. This study examines how this interdisciplinary integration—accelerated by advances in artificial intelligence (AI)—is reshaping consumer perception, behavior, and decision-making. Drawing on an extensive review of academic literature, industry reports, and empirical case studies published between 2024 and 2025, the paper analyzes the evolving role of AI technologies, particularly reinforcement learning, predictive analytics, and generative artificial intelligence (GenAI), in modern marketing ecosystems.
The findings reveal a dual and complex landscape. On one hand, AI-enabled marketing systems deliver significant performance gains, including return-on-investment improvements of 20–30% and notable reductions in customer acquisition costs. Leading organizations such as Starbucks and Nike illustrate the emergence of the “algorithmic experience,” wherein integrated data architectures and behavioral nudging techniques are employed to anticipate demand, personalize engagement, and influence habitual consumption. On the other hand, the rapid diffusion of GenAI introduces critical challenges related to authenticity, consumer trust, and insight quality. Phenomena such as the “uncanny valley” effect in AI-generated advertising and the potential risk of “model collapse” caused by recursive synthetic data threaten the reliability of consumer intelligence and brand credibility.
By synthesizing technological, psychological, and strategic perspectives, this paper proposes a comprehensive theoretical framework for understanding AI’s expanding role in shaping the psychological architecture of the future consumer. The study offers both conceptual insights and practical implications for scholars and practitioners navigating the evolving intersection of AI, consumer psychology, and marketing strategy.
Keywords: Algorithmic experience, generative artificial intelligence, consumer psychology, predictive analytics, marketing strategy
