Effects of AI-Based Personalized Marketing on Luxury Brand Consumer Responses: The Mediating Role of Digital Literacy and the Moderating Role of Brand Engagement

This study examines how AI-powered personalized marketing tools influence luxury brand consumer responses through digital literacy mediation and brand engagement moderation. Despite accelerated digital transformation in luxury retail, limited research explores AI’s impact on emotional brand relationships where exclusivity and personalization create tensions. We surveyed 300 Korean luxury consumers with AI marketing experience using Hayes’ PROCESS Macro Model 7 with 5,000 bootstrap samples, controlling for demographics and purchase frequency. Results show AI marketing experience enhances digital literacy (β＝.4126, p＜.001), which influences brand attachment (β＝.5634), satisfaction (β＝.5412), and purchase intention (β＝.5378, all p＜.001). Brand engagement moderates the AI-literacy relationship (β＝.1234, p＜.01), with high-engagement consumers showing 50% stronger effects. Moderated mediation indices (.0664-.0695) confirm engage ment amplifies AI’s indirect effects. Multi-group analyses reveal 41% stronger effects for MZ generation versus Generation X, and 79% stronger moderation for online-only versus omnichannel shoppers. This study extends TAM to emotional dimensions in luxury contexts, demonstrates digital literacy’s mediating role bridging technology and emotion, and reveals “pervasive moderation” where engagement affects all pathways. Findings suggest luxury brands should prioritize high-engagement customers for AI initiatives, develop generation-specific strategies, and strengthen online AI investments. The research shows AI resolves luxury’s exclusivity-accessibility paradox through “algorithmic distinction”—mass personalization creating individualized luxury experiences