Analyzing the Impact of Artificial Intelligence and Sustainability on Gen Z Consumer Purchase Intentions: A Case Study of L’Oréal Cosmetics Indonesia

Abstract

The dynamic landscape of consumer behavior, shaped by technological advances and sustainability considerations, has led to a reassessment of retail strategies, especially in the beauty industry. This study centers on the intersection of Artificial Intelligence (AI) and sustainability, particularly concerning Generation Z (Gen Z) consumers in the Indonesian beauty market. It explores how these factors influence Gen Z’s purchase decisions, offering insights for beauty brands to adapt strategically. Garnier, a L’Oreal subsidiary, faces heightened competition in the dynamic beauty market, especially with the emergence of local beauty products, adding complexity to its business landscape. This intensifies the need for strategic responses to maintain a competitive edge in the cosmetics industry. The research assesses the impact of AI technology, specifically using Garnier Skin Coach AI, on Gen Z’s purchase intentions for Garnier skincare products in Indonesia. It also examines the influence of sustainability on Gen Z’s preferences and purchase decisions in the Indonesian beauty market, adopting the Stimulus-Organism-reaction (SOR) model. Conducting a quantitative study with 400 Gen Z respondents, the research utilized online surveys through Qualtrics XM and analyzed data using Structural Equation Modeling (SEM) in SPSS AMOS 26.0. The findings highlight the substantial impact of AI technology, especially in enhancing hedonic values. Accurate information retrieval and interactive engagement create nuanced elements that heighten the appeal. Sustainability initiatives focusing on eco-friendly and cruelty-free practices significantly affect preferences, indicating a growing preference for sustainability-enriched experiences and affecting purchase intention. To enhance Garnier Skin Coach AI, a comprehensive strategy is recommended. This involves refining User-Centric Design, educating users, and boosting purchase intention through perceived utilitarian value. The proposed tactics align with customer preferences, encourage personalized interactions, integrate predictive skin insights, and the addition of e-wallet features.