Analyzing the Role of AI Adoption in Influencing Online Grocery Buying Intentions in Tier-2 Cities: A Study of Bhubaneswar

Abstract

The diffusion of Artificial Intelligence (AI) into everyday retail commerce is reshaping how urban Indian consumers discover, evaluate, and purchase groceries online. While this transformation is well-documented in India's major metropolitan centres, the experience of emerging smart cities such as Bhubaneswar — Odisha's capital and the country's first-ranked Smart City Mission finalist — remains entirely uncharted in academic literature. This study investigates how AI-driven features, specifically personalised product recommendations, AI-powered chatbots, smart search technologies, and dynamic convenience mechanisms, influence the online grocery shopping behaviour of residents in Bhubaneswar. Employing a mixed-methods research design, primary data was gathered from 400 respondents across diverse income, age, gender, and occupation groups through a structured Likert-scale survey instrument, supplemented by qualitative insights from focused in-depth interviews. Data were analysed using descriptive statistics, Pearson correlation, multiple regression, and Structural Equation Modelling (SEM) via SPSS 26 and AMOS 26. Five hypotheses were tested, examining the direct and mediated effects of AI personalisation, convenience, chatbot utility, and platform trust on purchase intention, with demographic variables included as moderators. Results reveal that AI-driven convenience is the strongest predictor of purchase intention (β = 0.58, p < 0.01), while platform trust plays a pivotal mediating role (β = 0.55, p < 0.01), and AI personalisation significantly enhances the overall shopping experience (β = 0.40, p < 0.01). The SEM model demonstrates excellent fit (CFI = 0.94, RMSEA = 0.05, GFI = 0.91). Younger consumers (18–35) and higher-income groups show markedly greater reliance on AI features, while government employees and educators — Bhubaneswar's dominant occupational classes — exhibit cautious but growing acceptance. The study advances understanding of how AI reshapes grocery retail in non-metro smart city contexts and offers practical guidance for platform designers, city administrators, and policymakers implementing ONDC and digital commerce frameworks in emerging urban India.