The Impact of AI-driven Customer Segmentation on Customer Value in the Cosmetic Products Industry

Abstract

Artificial Intelligence (AI) is transforming digital marketing by enabling brands to segment and target customers more accurately. This study examines the impact of AI-driven customer segmentation on customer value in the cosmetic products industry, focusing on satisfaction, engagement, and loyalty compared with traditional segmentation methods. A total of 200 respondents from Vijayapura, Karnataka, were selected using purposive sampling, ensuring representation of active online cosmetic consumers familiar with AI-based marketing. This sample size was considered adequate for achieving reliable results using basic statistical analyses such as descriptive statistics, t-tests, and ANOVA. The findings show that customers exposed to AI-based segmentation reported significantly higher satisfaction, engagement, and loyalty levels (p < 0.001). Moreover, responsiveness to AI-driven marketing varied by age and gender, with younger and female consumers showing greater adaptability to AI-enabled personalization. The study concludes that AI segmentation substantially improves marketing effectiveness by delivering personalized experiences and enhancing customer relationships. It recommends that cosmetic brands integrate ethical and transparent AI tools to strengthen consumer trust and long-term loyalty.