International Journal of Scientific Research and Engineering Development

This research paper provides a comprehensive analysis of the transformative impact of Artificial Intelligence (AI)-driven personalization on consumer behavior within the Fast-Moving Consumer Goods (FMCG) sector. The primary objective is to evaluate how this technological paradigm shift influences consumer decision-making, brand engagement, and loyalty, while also assessing its effect on key business metrics. This study synthesizes extensive data from industry reports, academic literature, and real-world case studies of leading multinational corporations (MNCs). Key findings reveal a strong positive correlation between the implementation of advanced AI personalization techniques and significant improvements in marketing Return on Investment (ROI), customer engagement, and sales conversion rates. However, the analysis also uncovers critical moderating factors that shape the effectiveness of these strategies, namely the "AI Engagement Paradox," where consumers prefer the outcomes of personalization but not overt interactions with AI, and the "Personalization-Privacy Paradox," a persistent tension between the desire for tailored experiences and concerns over data privacy. The paper concludes by presenting a strategic framework for FMCG companies, offering actionable, ethically-grounded recommendationsfor the phased adoption and mature implementation of AI in marketing to navigate these complexities, build consumer trust, and secure a sustainable competitive advantage in the digital era.