Unpacking AI Service and Customer Engagement in Indonesian Retail: The Mediating Role of Intention and Moderating Role of Trust

This study examines the effect of Artificial Intelligence (AI) service on customer engagement in the Indonesian retail industry, with intention as a mediating variable and trust as a moderating variable. Using a quantitative approach with data collected from retail customers in Indonesia, this research employed Structural Equation Modelling-Partial Least Squares (SEM-PLS) to test the proposed hypotheses. The results indicate that AI service has a significant positive effect on customer engagement (p < 0.001). Furthermore, intention mediates the relationship between AI service and customer engagement (p < 0.001). However, trust does not moderate the relationship between AI service and intention (p = 0.331) nor between intention and customer engagement (p = 0.337). The model explains 43% of the variance in customer engagement and 49% of the variance in intention. These findings provide both theoretical and practical implications for AI service implementation in the Indonesian retail context.