Exploring perceived risk and digital ethics affecting consumer experiences and decision-making in smart retailing

Abstract

Smart technologies, such as artificial intelligence (AI), the Internet of Things (IoT), and virtual reality (VR), are transforming the retail industry by reshaping consumer interactions and enabling personalised, enhanced shopping experiences. These advancements, while revolutionising operational efficiency and consumer engagement, also raise critical challenges related to ethics, privacy, and perceived risks, significantly influencing consumer trust, satisfaction, and behaviour. Despite the increasing integration of smart technologies in retail, limited research has explored how constructs such as perceived risk, trust, and digital ethics collectively impact consumer behaviour. This study addresses this gap by introducing and empirically validating the constructs of "smart consumer experience," "smart satisfaction," and "digital well-being," offering a comprehensive framework to understand consumer engagement in smart retailing. This research employs a quantitative approach, collecting survey data from over 500 respondents to examine consumer interactions across pre-purchase, purchase, and post-purchase stages. Using structural equation modelling (SEM), this study investigates the relationships among perceived privacy concerns, fairness, risk, trust, satisfaction, purchasing behaviour, e-loyalty, and digital well-being. Findings reveal that perceived fairness and privacy concerns significantly influence trust, which mediates their impact on smart satisfaction and e-loyalty. Notably, while smart satisfaction enhances consumer engagement and e-loyalty; however, its direct effect on purchasing behaviour remains complex and requires further exploration. This study highlights the reciprocal relationships among trust, smart satisfaction, and digital well-being, underscoring their collective importance in shaping positive consumer experiences. By addressing key barriers such as trust, perceived risk, and ethical concerns, this research contributes to the growing discourse on digital transformation in retail. The findings provide actionable strategies for stakeholders, including enhancing transparency in data usage, integrating fairness into algorithmic processes, and designing consumer-centric technologies to promote digital well-being. These insights are critical for retailers, policymakers, and technologists striving to optimise consumer engagement while fostering ethical accountability in smart retailing. In addition to the retail sector, the implications of this research extend to other industries, such as healthcare, education, and finance, where smart technologies are increasingly being adopted. This study provides a robust empirical foundation for understanding how ethical considerations and digital transformation intersect to shape consumer behaviour, trust, and satisfaction. By bridging critical gaps in the literature and offering practical guidance, this research advances academic knowledge and equips stakeholders to navigate the complexities of ethical and sustainable technology adoption in an increasingly digital world.