The impact of ai-driven hyper-personalisation within loyalty programs in South Africa

Abstract

Purpose: The research used quantitative deductive methods based on Stimulus-Organism- Response theory to confirm AI-Driven Hyper-Personalisation effects on Purchase Intention through Customer Engagement and Perceived Value as mediators in South African retail loyalty market. Methodology: The research design uses a cross-sectional survey method to collect data from South African retail loyalty program participants. The research conducted Structural Equation Modelling to test all hypotheses simultaneously while performing a complete assessment of construct validity. Findings: Empirical analysis confirmed that the AI-Driven Hyper-Personalisation stimulus serves as a potent antecedent, significantly and strongly driving both Perceived Value and Customer Engagement. The research shows that AI-Driven Hyper-Personalisation creates a substantial direct relationship with Purchase Intention because the beta value reaches a significance level. Critically, the theorised mediating pathways were rejected. The nonmediation outcome and empirical data showing Customer Engagement and Perceived Value constructs have strong similarity demonstrate that consumers view utilitarian benefits and relational interaction as single responses to advanced AI systems. Contribution: The study challenges the general applicability of the traditional Stimulus- Organism-Response sequential mediation pathway to high-intensity AI stimuli. The research team needed to create the Integrated Organism Construct because they rejected sequential mediation through Customer Engagement and Perceived Value and because their data showed no distinct relationship between these two Organism constructs. The research proves that Stimulus-Response patterns function as a fundamental theoretical boundary which controls the system. The system shows that AI-Driven Hyper-Personalisation functions as a transactional accelerator which eliminates the requirement for sequential psychological processing to generate Purchase Intention. South African retail managers need to make technical AI Service Quality investments because these results show that transactional acceleration depends on it. The combination of utilitarian and relational benefits needs a new approach which moves from individual psychological state measurement to use composite performance indicators like Integrated AI Service Satisfaction for tracking the complete value and commitment AI systems produce.