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Artificial intelligence in the fashion Generative

adversarial
industry: consumer responses to network
technology
generative adversarial network
(GAN) technology 61
Kwonsang Sohn Received 11 March 2020
Revised 25 March 2020
School of Management, Kyung Hee University, Seoul, Republic of Korea 22 May 2020
Christine Eunyoung Sung 2 June 2020
3 June 2020
Jake Jabs College of Business and Entrepreneurship, Montana State University, 28 July 2020
Accepted 8 September 2020
Bozeman, Montana, USA, and
Gukwon Koo and Ohbyung Kwon
School of Management, Kyung Hee University, Seoul, Republic of Korea

Abstract
Purpose – This study examines consumers’ evaluations of product consumption values, purchase intentions
and willingness to pay for fashion products designed using generative adversarial network (GAN), an artificial
intelligence technology. This research investigates differences between consumers’ evaluations of a GAN-
generated product and a non-GAN-generated product and tests whether disclosing the use of GAN technology
affects consumers’ evaluations.
Design/methodology/approach – Sample products were developed as experimental stimuli using
cycleGAN. Data were collected from 163 members of Generation Y. Participants were assigned to one of the
three experimental conditions (i.e. non-GAN-generated images, GAN-generated images with disclosure and
GAN-generated images without disclosure). Regression analysis and ANOVA were used to test the hypotheses.
Findings – Functional, social and epistemic consumption values positively affect willingness to pay in the
GAN-generated products. Relative to non-GAN-generated products, willingness to pay is significantly higher
for GAN-generated products. Moreover, evaluations of functional value, emotional value and willingness to
pay are highest when GAN technology is used, but not disclosed.
Originality/value – This study evaluates the utility of GANs from consumers’ perspective based on the
perceived value of GAN-generated product designs. Findings have practical implications for firms that are
considering using GANs to develop products for the retail fashion market.
Keywords Artificial intelligence (AI), Generative adversarial networks (GANs), Consumption value theory,
AI aversion, Fashion consumer behaviour
Paper type Research paper

1. Introduction
Artificial intelligence (AI) has become one of the biggest disrupters in the consumer market
(Hackl and Wolfe, 2017); it has been extensively adapted to various services and products
without consumers even recognizing it (Krogue et al., 2017). Increasingly, firms are showing
interest in using generative AI to produce creative outputs traditionally considered unique to
humans. Defined as “programs, algorithms, systems and machines that demonstrate
intelligence” (Shankar, 2018, p. vi), AI is a form of self-learning technology (Davenport and
Ronanki, 2018). In particular, generative adversarial networks (GANs), a highly
representative form of generative AI technology used to model data distributions
(Goodfellow et al., 2014), have been shown to successfully perform creative tasks
previously considered exclusive to humans (Wu et al., 2017). International Journal of Retail &
Distribution Management
Vol. 49 No. 1, 2021
pp. 61-80
This work was supported by the Ministry of Education of the Republic of Korea and the National © Emerald Publishing Limited
0959-0552
Research Foundation of Korea (NRF-2017S1A3A2066740). DOI 10.1108/IJRDM-03-2020-0091
IJRDM With the advent of GANs, the scope of AI is expanding and yielding creative results.
49,1 However, little is known about the practical impacts of generative AI, and theorization is
lacking. In retail fashion, where products are designed to satisfy consumers’ aesthetic and
hedonic needs (Ozdamar Ertekin and Atik, 2015) and where speed and novelty are important,
GAN promises to be a cost-effective way to generate new product designs. By investigating
consumers’ responses to fashion products designed using GAN technology, this study
contributes to the literatures on AI, GANs and consumer behaviour and offers practical
62 implications for firms that may consider using GANs and other forms of AI to design
products.
Currently, several GANs are being used in the fashion industry: TextureGAN various
colours or patterns to be applied to basic sketch images (Xian et al., 2018); multi-label AC-GA
generates images of fashion products based on characteristics input as text (Banerjee et al.,
2018) and CAGAN enables users to generate upper body and garment images (Jetchev and
Bergmann, 2017). Previous studies on generative AI and GANs have focused on technical
aspects; empirical studies investigating consumer perceptions of GAN-generated product
designs are lacking. Existing research about AI focuses predominantly on technical aspects;
few researchers have investigated the practical application of AI. This study aims to fill this
research gap by evaluating generative AI as a potential viable technology in the retail fashion
context and to examine the effects of GAN technology on consumer purchase decision-
making. Findings from previous studies show that members of Generation Y tend to be tech-
savvy (Smith, 2017; Lee et al., 2020) and fashion-sensitive, with knowledge of fashion trends
(Bakewell and Mitchell, 2003; Valaei and Nikhashemi, 2017). Evidence shows that increased
knowledge about product characteristics, novelty and differentiation positively affects
consumers’ buying behaviour (Tanner and W€olfing Kast, 2003); therefore, increased
knowledge about GAN-generated fashion products may influence the perceptions and
purchase intentions of tech-savvy members of Generation Y.
This study has three aims: (1) to empirically examine how the consumption values
associated with retail products developed using GAN-synthesized images affect consumers’
purchase intentions and willingness to pay; (2) to compare consumers’ evaluations of GAN-
generated versus non-GAN-generated products to identify differences between purchase
intentions and willingness to pay and (3) to verify whether disclosing the use of AI affects
consumers’ evaluations. We expect that the results of this study will enable firms in the
fashion industry that adopt GAN technology to predict consumer behaviour, especially with
regard to apparel with printed images.

2. Literature review
2.1 Prior research on fashion design using GANs
GANs (Goodfellow et al., 2014) constitute a class of methods by which data distributions are
modelled. The generator imitates the distribution of learning data, and the discriminator
estimates the likelihood of the sample emerging from the actual data (Zhang et al., 2019). A
GAN learns from the min-max game between the generator and the discriminator. Because
this type of unsupervised learning can be applied to images, GANs are attracting significant
attention from deep learning scholars (Hong et al., 2019) and the retail fashion industry.
Several researchers have developed GANs to design fashion products: shoeGAN utilises
GoogleNet-based, fully connected neural network classifiers to extract vector values of
images which become inputs for shoe designs (Deverall et al., 2017); FashionGAN enables
specific fabric colours and patterns to be applied to a single sketch as an input value, thereby
overcoming the complexities involved in creating 3D virtual clothing (Cui et al., 2018) and
attribute manipulation GAN solves problems involving many attributes by introducing class
activation maps to the generator (Ak et al., 2019). Other researchers have developed GANs
that transform clothing designs based on images of a fashion model, including: a GAN that Generative
outputs altered images based on text entered by a designer (Zhu et al., 2017a); an end to end adversarial
Swapnet to create a 3D image by superimposing posture, form and clothes from different
images and adding warping and texturing modules to the vanillaGAN (Raj et al., 2018) and a
network
category-supervised GAN that classifies clothing in images using YOLO and then uses technology
CatGAN to produce a tiled image (Zhang et al., 2018). Despite recent significant advances of
both theory and application, evaluating and comparing GANs remains a daunting task (Borji,
2019). Therefore, direct applications in industry must be implemented with caution. Another 63
concern is the stabilization of learning. Although GANs have enabled some stable learning to
be carried out (Radford et al., 2015), neural network structures must be improved if GANs are
to be effectively utilized in more diverse fields (Cai et al., 2020). Also, most studies have
focused on technical aspects, whereas this study focuses on consumers’ responses to GAN-
designed products. The emergence and acceptance of new technologies and the consequent
impacts on consumer satisfaction have important implications in the retail industry (Altıntaş
et al., 2020).
Although rigorous scholarly investigation and theorisation is nascent, some scholars have
attempted to create a theoretical framework for the adoption of AI technology (Belanche et al.,
2019; Kowalczuk, 2018), whereas others have compared technology acceptance theories in the
context of AI-based intelligent products and investigated factors influencing acceptance
(Sohn and Kwon, 2020). Few have empirically investigated the effectiveness of AI technology
and consumer awareness of its use. In the fashion context, Chuang et al. (2018) verified that
Chatbot e-service agent marketing efforts can be more efficient than traditional approaches.
Similarly, Liang et al. (2020) investigated consumers’ attitudes and purchase intentions
towards an AI-based virtual-style consultant service; despite positive effects in terms of
perceived usefulness and perceived ease of use, consumers perceived a performance risk with
regard to AI-based services. Although researchers have investigated consumers’ reactions to
AI, none have examined consumers’ acceptance of GANs in product design contexts.

2.2 Consumption values and buying behaviour

Retail fashion is driven mainly by aesthetics and customers’ hedonic tendencies (Noh et al.,
2014). In other contexts, a traditional utilitarian approach to product design might be
warranted, but in retail fashion, a multi-faceted approach is necessary. Like other hedonic
products, fashion has symbolic, intangible and emotional value (Deserti, 2014; Sullivan et al.,
2012). This study employs consumption value theory to explain buying behaviour and its
relation to image design, an essential element of fashion products.
Consumption value theory posits that consumers assess the value of products and
services based on perceptions of potential utility and benefits (Vinson et al., 1977; Zeithaml,
1988). To overcome limitations of framing it as a single dimension, Sheth et al. (1991) outlined
a new, multidimensional theory of consumption value (i.e. functional, social, emotional,
epistemic and conditional value) that explains the entire purchase decision-making process
(Tam, 2004). Importantly, most consumption values are independent; changes in one value do
not necessarily result in changes in another, and their impacts on purchasing behaviour may
vary. This study considers the effects of four consumption values: functional value, social
value, emotional value and epistemic value. Conditional value is excluded because it
represents a special case of the other four consumption values rather than acting as an
independent variable (Sweeney and Soutar, 2001).
In general, consumers form higher evaluations of products that meet their expectations
better, with positive effects on purchase intentions (Aghazadeh et al., 2014). Perceived quality
is strongly correlated with differentiation, superiority and consumer engagement in decision-
making (Yoo et al., 2000). Likewise, consumption values are affected by the utility derived
from various factors, and their relative importance can change based on the consumption
IJRDM context or product characteristics. For example, in contexts such as social media and social
49,1 commerce, emotional and social value influence purchase intentions more than functional
value (Gan and Wang, 2017; Kim et al., 2011) because increased awareness of others’
assessments affects purchasing behaviour. Because increased knowledge about product
characteristics, novelty and differentiation positively affects buying behaviour (Tanner and
W€olfing Kast, 2003); the relative importance of consumption values may also increase.
Therefore:
64
H1. Consumption values (functional, social, emotional and epistemic) positively affect
purchase intentions.
H1a. Use of GAN technology affects the relationship between functional value and
purchase intentions.
H1b. Use of GAN technology affects the relationship between social value and purchase
intentions.
H1c. Use of GAN technology affects the relationship between emotional value and
purchase intentions.
H1d. Use of GAN technology affects the relationship between epistemic value and
purchase intentions.
Willingness to pay is another important factor which can predict the perceived value of
products and consumer needs (Wertenbroch and Skiera, 2002) and explain consumers’
buying behaviour. Willingness to pay can reflect the product’s perceived quality and help
others determine their worth (Netemeyer et al., 2004). As demonstrated in the mobile services
context, consumption values may affect willingness to pay (Pihlstr€om and Brush, 2008).
Therefore:
H2. Consumption values (functional, social, emotional, and epistemic) positively affect
willingness to pay.
H2a. Use of GAN technology affects the relationship between functional value and
willingness to pay.
H2b. Use of GAN technology affects the relationship between social value and
willingness to pay.
H2c. Use of GAN technology affects the relationship between emotional value and
willingness to pay.
H2d. Use of GAN technology affects the relationship between epistemic value and
willingness to pay.

2.3 AI technology
Although many consumers are unaware of it, AI technology permeates many services and
products (Krogue et al., 2017) and is changing the retail landscape (Grewal and Roggeveen,
2020). Tussyadiah and Miller (2019) examined consumer awareness of AI, classifying
consumers into three groups: laggards, aficionados and realists. Most consumers are realists
who believe that AI technology has both benefits and risks. For consumers who perceive
AI-based products and services to have high utility compared to other products, the use of
AI technology can be an effective strategy to change buying behaviour (Chopra, 2019).
Because rapid advances in AI-related technologies will enable new consumer experiences,
they will also affect the consumption values. This technology will revolutionize consumer
experiences in many industries, particularly retailing. As AI-based systems are used to
manage more marketing and production planning tasks, the optimization of machine Generative
intelligence will be the next step in the digital transformation of industry practices (Vial, adversarial
2019). Recently, AI technology has been applied in the retail fashion industry to improve
consumption experiences (Saponaro et al., 2018). Therefore, the following hypotheses are
network
proposed to identify the effect of AI technology (non-GAN, GAN with disclosure and GAN technology
without disclosure):
H3. There are differences among the three groups in functional value. 65
H4. There are differences among the three groups in emotional value.
H5. There are differences among the three groups in social value.
H6. There are differences among the three groups in epistemic value.

2.4 Effects of algorithm aversion

Some consumers may reject the use of algorithms, including AI technology. Algorithm
aversion (Dietvorst et al., 2016) is observed in various industries such as finance,
manufacturing and healthcare and can have major effects on consumer decision-making
(Fildes and Goodwin, 2007; Vrieze and Grove, 2009). Especially in industries where personal
preference is an essential part of decision-making, antagonistic attitudes towards algorithms
are prominent (Sinha and Swearingen, 2001). Therefore:
H7. There are differences among the three groups in purchase intentions.
H8. There are differences among the three groups in willingness to pay.

3. Methods
3.1 Stimuli
The experimental stimuli were GAN-generated and non-GAN-generated images of tops (i.e.
long-sleeved t-shirts). Design elements appeared on the front of the tops, which is most
suitable for expressing complexity and novelty (Seifert and Chattaraman, 2017), factors
which influence consumers’ aesthetic reactions. This study focused on novelty, which can
directly affect purchase intentions (Ha and Tam, 2015; McQuiston, 1989; Sung et al., 2019).
Novel product variations and corresponding images were created using cycleGAN, the
most successful generative AI algorithm in its category (Chu et al., 2017). The algorithm
learns from unpaired training data to convert images of domain A into images of domain B
(Zhu et al., 2017b). Images from the artistic works of van Gogh, Monet, Jeong-seon and Ukiyoe
were collected from the official GitHub of the cycleGAN developer (https://people.eecs.
berkeley.edu/∼taesung_park/CycleGAN/datasets/) and Google Arts and Culture. Image data
that could affect the learning process were converted to the same resolution and pre-
processed to remove all marginal images before cycleGAN learned the dataset (van Gogh:
58,500 iterations; Monet: 185,500 iterations; Jeong-seon: 59,200 iterations; Ukiyoe: 113,700
iterations). Results were limited to four because too many alternatives would result in
information overload, which could increase perceived choice complexity for participants
(Iyengar and Lepper, 2000; Lurie, 2004) (Table 1).

3.2 Participants and procedure

The experiment was conducted with 163 participants between the ages of 20 and 39. An
online post advertised an opportunity to participate in the experiment in exchange for a
monetary reward, and invited individuals who were interested to visit the laboratory.
Members of Generation Y tend to be knowledgeable about fashion products and constitute an
IJRDM Findings and
49,1 Reference Research aim Context Sample and methods contributions

Liang et al. To examine Intentions to adopt N 5 313 respondents Findings reveal

(2020) consumers’ Amazon’s AI-based in the top 10 significant positive
attitudes and virtual-style metropolitan areas in effects of perceived
purchase intentions consultant service the USA. Descriptive usefulness and
66 towards an AI Echo Look statistics, SEM perceived ease of use,
device analysis, multigroup and significant
comparison negative effects of
performance risk on
consumers’ attitudes
towards AI
Sohn and To compare AI-based N 5 378 respondents The value-based
Kwon (2020) technology intelligent products in South Korea. adoption model is the
acceptance theories such as smart Descriptive statistics, best predictor in the
in terms of speakers, voice SEM analysis, context of AI-based
acceptance of AI- assistant services Hotelling’s T 2 test, intelligent products
based intelligent and AI-based home decomposition and the proportional
products and appliances analysis, ANOVA influence of enjoyment
investigate the and Tukey’s HSD is overwhelmingly
factors influencing large
acceptance
Belanche To propose a Robo-advisor N 5 765 North Consumers’ attitudes
et al. (2019) research framework services American, British toward robo-advisors,
to better and Portuguese together with mass
understand robo- respondents. SEM media and
advisor adoption analysis, interpersonal
and to examine the multisample subjective norms, are
validity of the analyses the key determinants
measurement of adoption. The
influences of perceived
usefulness and attitude
are slightly higher for
users with a higher
level of familiarity with
robots; in turn,
subjective norms are
significantly more
relevant for users with
a lower familiarity and
for customers from
Anglo-Saxon countries
Chung et al. To verify the effect Using Chatbot to N 5 161 respondents Findings reveals that
(2018) of marketing efforts provide in South Korea. Chatbot e-service
provided by personalized care in Descriptive statistics, agents’ marketing
Chatbot the luxury retail SEM analysis efforts positively
sector impacted accuracy and
credibility, which in
turn positively affected
satisfaction. Overall,
Chatbot e-service
provides interactive
and engaging brand/
customer service
Table 1. encounters
Summary of previous
studies (continued )
 Findings and
Generative
Reference Research aim Context Sample and methods contributions adversarial
network
Kowalczuk To develop and test Voice-activated Customer reviews Perceived ease of use
(2018) an acceptance smart speakers N 5 2,186 and and perceived technology
model for such as Amazon Twitter data usefulness, the quality
investigating Echo and Google N 5 899. N 5 293 and diversity of a
consumers’ Home respondents. system, consumers’ 67
intentions to use Netnographic enjoyment, technology
smart speakers analysis, SEM optimism and risk
analysis (surveillance anxiety
and security/privacy
risk) strongly affect the
acceptance of smart
speakers. Enjoyment
has the strongest effect
on behavioural
intentions to use smart
speakers Table 1.

important customer group in the retail fashion industry (Bakewell and Mitchell, 2003; Valaei
and Nikhashemi, 2017). Participants were selected based on quota sampling method. To
represent Generation Y, characteristics of potential participants, including age (20–39),
gender and job (student, office worker and others), were considered prior to selection.
Participants (men: N 5 84, 51.5%; women: N 5 79, 48.5%; mean age: 29.2 years, SD 5 5.7)
were assigned to one of the three experimental conditions – i.e. 1) non-GAN-generated images,
2) GAN-generated images with disclosure and 3) GAN-generated images without disclosure)
in three different locations (see Table 2). Those groups were categorized into non-GAN and
GAN groups.

Functional Conditional Social

Value Value Value

Consumer Choice Behaviour

Figure 1.
Diagram of
consumption value
Emotional Epistemic theory (Sheth
et al., 1991)
Value Value

Group 1 2 3

Use of GAN No Yes Yes Table 2.

Use of GAN disclosed N/A No Yes Group design
IJRDM
49,1

68

Plate 2.
Examples of stimuli

Participants visited a website and uploaded one of several images to design a fashion product
(see Plate 2a). Those in the first group viewed a top design based on the uploaded non-GAN-
generated image and evaluated it. Those in the second and third groups viewed top designs
based on GAN-generated images; those in the second group were not told that the designs
were generated using AI; this information was disclosed to the third group. Based on the
uploaded image, the cycleGAN algorithm generated four different top designs in the style of
each of the four artists (see Plate 2b for an example). Participants in these groups were asked
to compare these designs to the design based on the original image. In the case of the GAN-
generated images without disclosure group, most participants asked whether they could
actually purchase the generated stimuli (Table 3).
3.3 Measures
To measure consumption values and purchase intentions, participants used seven-point
Likert scales ranging from 1 (strongly disagree) to 7 (strongly agree) to respond to 19
validated items: three items measured functional value (Sweeney and Soutar, 2001), four

Construct Items Factor loadings Cronbach’s α CR AVE

Functional value FV1 0.799 0.849 0.872 0.695

FV2 0.780
FV3 0.844
Social value SV1 0.656 0.913 0.911 0.722
SV2 0.744
SV3 0.752
SV4 0.804
Emotional value EMV1 0.771 0.937 0.929 0.726
EMV2 0.799
EMV3 0.852
EMV4 0.834
EMV5 0.707
Epistemic value EPV1 0.765 0.886 0.892 0.676
EPV2 0.863
EPV3 0.842
EPV4 0.791
Purchase intentions PI1 0.863 0.967 0.967 0.908
Table 3. PI2 0.876
Measurement test PI3 0.873
 Non-GAN group Use GAN group
Functional Functional
Value H1a Value H1a
-0.174 0.160
Purchase Purchase
H1b Intention H1b Intention
0.467*** 0.151
H1c R² = 0.820 H1c R² = 0.197
Social Value 0.110 Social Value 0.241
H1d H1d
0.584*** 0.065

H2a H2a
0.086 0.379***
Emotional H2b Emotional H2b
Value 0.182 Willingness -0.236* Willingness
Value
H2c to Pay H2c to Pay
0.217 0.019
R² = 0.195 R² = 0.177
H2d H2d
0.091 0.239**
Epistemic Epistemic
Value Value

Note(s): * p < 0.05, ** p < 0.01, *** p < 0.001

technology
network

69
adversarial
Generative

Figure 2.
Results of
hypothesis tests
IJRDM Functional Social Emotional Epistemic Purchase
49,1 Construct value value value value intentions

Functional value 0.834

Social value 0.508** 0.849
Emotional value 0.512** 0.617** 0.852
Epistemic value 0.304** 0.433** 0.301** 0.822
70 Purchase 0.414** 0.462** 0.502** 0.374* 0.953
intentions
Note(s): Diagonal elements in italic are the square roots of AVE
Table 4. *p < 0.05
Discriminant validity **p < 0.01

items measured social value (Shang et al., 2012), five items measured emotional value
(Sweeney and Soutar, 2001), four items measured epistemic value (Biswas and Roy, 2015;
Dholakia, 2001) and three items measured purchase intentions (Lu et al., 2010). For
willingness to pay, participants specified the prices they would pay for the products.
The measurement model was tested for construct and discriminant validities and
composite reliability (CR). Convergent validity was assessed by examining factor loadings
for each item and CR (e.g. all CR factor loadings greater than 0.87, exceeding the threshold of
0.50, Bagozzi and Yi, 1988), by falling each indicator into each expected latent construct
(Anderson and Gerbing, 1988). In addition, Cronbach’s α was calculated to verify the internal
consistency of extracted items to be used as factors. As shown in Table 3, measurement items
met all three conditions for convergent validity (Fornell and Larcker, 1981). Moreover, the
results of AVE in Table 4 (above 0.05, Bagozzi and Yi, 1988) show that each square root of
AVE exceeds the correlation values of other variables (Fornell and Larcker, 1981). For the
discriminant validity, the heterotrait-monotrait (HTMT) and Fornell-Larker criteria were
used using SmartPLS 3 software. All values of HTMT for constructs were lower than 0.85
(HTMT between 0.234 and 0.670), which is the cut-off value (Henseler et al., 2015). Therefore,
the constructs have discriminant validity. A common method bias test was conducted. The
results of inner VIF tests show that VIF values are less than 3.3 (VIF between 1.256 and 1.938),
indicating no multicollinearity (Kock, 2015).

4. Results
4.1 Hypothesis testing
PLS-SEM was employed to predict key targeted constructs (H1 and H2) for the theoretical
path model test using a component-based approach (Hair et al., 2011). We provide the
significance of the path coefficients, R2, f2 and SRMR for the overall model evaluation. To test
path analysis (H1a–d and H2a–d), the effect of consumption value on consumer behaviour
was tested in each group with a bootstrapped sample of 5,000 cases using SmartPLS 3. The f2
values exceed 0.02, which is acceptable (Cohen, 1992; Henseler et al., 2009) and SRMR 5 0.051,
indicating acceptable fit (conservative cut-off: 0.08; Hair et al., 2017).
The sample size was acceptable for estimated path coefficients. When PLS-SEM is
conducted, (1) “10 times the largest number of formative indicators [should be] used to
measure a single construct” and (2) “10 times the largest number of structural paths [should
be] directed at a particular construct in the structural model” (Hair et al., 2017, p. 24).
H1a–d and H2a–d predict relationships between independent variables (a: functional
value; b: social value; c: emotional value; d: epistemic value) and dependent variables (H1:
purchase intentions; H2: willingness to pay). Path analysis (e.g. path between functional value
and purchase intentions) was conducted to investigate the relationships between constructs. Generative
The path analysis (e.g. functional value and purchase intentions) reveals differences in the adversarial
effects of consumption values on consumer responses, thereby revealing the effects of AI
technology. Values for willingness to pay were log transformed to improve the model fit
network
(Bateman et al., 2006; Nepal et al., 2018). technology
Detailed results are presented in Figure 2 and Table 5. Significant paths are reported as
follows: Although consumption values do not have significant effects on purchase intentions
in the GAN group, results for the non-GAN group show that social (β 5 0.476, p < 0.01, 71
f2 5 0.541) and epistemic (β 5 0.584, p < 0.001, f2 5 1.712) values significantly affect purchase
intentions, explaining 82% of the variance (R2 5 0.820). Thus, H1b and H1d are supported,
but H1a (functional value) and H1c (emotional value) are not supported. Results for the GAN
group show that functional (β 5 0.379, p < 0.001, f2 5 1.719), social (β 5
0.236, p < 0.05,
f2 5 0.062) and epistemic (β 5 0.239, p < 0.01, f2 5 0.066) values significantly affect
willingness to pay, explaining 17.7% of the variance (R2 5 0.177), but the effect of emotional
value is not significant. Thus, H2a, H2b and H2d are supported, but H2c (emotional value) is
not supported. Overall, the results show that consumption values affect purchase intentions
when GAN is not used, but affect willingness to pay when GAN is used.
Moreover, PLS-multiple group analysis (PLS-MGA) was conducted using a bootstrapped
sample of 5,000 cases to identify which path is stronger between the two groups. Among
paths, the path between epistemic value and purchase intentions is significantly stronger for
the non-GAN group than for the GAN group. The path coefficient difference is 0.520
(p 5 0.003). This means that the relationship between epistemic value and purchase
intentions is stronger in the non-GAN group.
4.2 Comparison between groups in different experimental conditions
In testing H3 through H8, a one-way ANOVA test and post hoc comparisons were performed
using Tukey’s HSD test to identify the effects of AI technology among three groups (non-
GAN, GAN with disclosure and GAN without disclosure). The aim was to investigate
differences among the three groups with regard to perceived consumption values and
consumer responses.
Results in Table 6 show that functional value, emotional value and willingness to pay are
significantly higher in the GAN non-disclosure group (M 5 4.87, SD 5 0.74; M 5 5.39,
SD 5 0.88; M 5 $23.66, SD 5 $7.53) than in the non-GAN (M 5 4.30, SD 5 1.14; M 5 4.84;
SD 5 0.87; M 5 $18.29, SD 5 $11.71) and GAN disclosure (M 5 4.46, SD 5 0.72; M 5 4.93,
SD 5 0.83; M 5 $20.15, SD 5 $10.04) groups. Overall, willingness to pay ranged from $5 to

Non-GAN Use GAN

Group (n 5 57) Group (n 5 106)
Independent Dependent t (absolute t (absolute
variable variable Coeff value) Coeff value)

Functional value Purchase
0.174 1.332 0.160 1.151

Social value Intention 0.467** (0.007) 2.689 0.151 1.221
Emotional value 0.110 0.747 0.241 1.964
Epistemic value 0.584*** 5.991 0.065 0.423
Functional value Willingness to 0.086 0.341 0.379*** 3.812
Social value pay a
0.182 0.609
0.236* 2.358
Emotional value 0.217 1.133 0.019 0.154
Epistemic value 0.091 0.521 0.239** 2.793 Table 5.
Note(s): *p < 0.05, **p < 0.01, ***p < 0.001 Results of estimated
a
ln(willingness to pay þ 1) path coefficients
IJRDM GAN not GAN utilised GAN utilised
49,1 utilised (non-disclosure) (disclosure)
(n 5 57) (n 5 50) (n 5 56)
(a) (b) (c) Welch’s t Tukey’s
Variables Mean (SD) Mean (SD) Mean (SD) F (α) (α) HSD

Functional 4.302 4.870 4.455 5.594 6.258 b>a

72 value (1.143) (0.744) (0.724) (0.004**) (0.003**) b>c
Social value 4.377 4.250 4.758 3.656 4.979 c>b
(1.207) (1.098) (0.677) (0.028*) (0.009**)
Emotional 4.835 5.388 4.925 4.597 5.158 b>a
value (1.227) (0.876) (0.829) (0.011*) (0.007**) b>c
Epistemic 4.434 4.355 4.589 0.492 0.501 –
value (1.241) (1.332) (1.161) (0.612) (0.607)
Purchase 4.385 4.493 4.565 0.247 0.245 –
intentions (1.376) (1.370) (1.360) (0.782) (0.783)
Willingness $18.29 $23.66 $20.15 4.670 5.966 b>a
Table 6. to pay (11.71) (7.53) (10.04) (0.011*) (0.004**) b>c
Results of ANOVA test Note(s): *p < 0.05, **p < 0.01; $ 5 converted to USD

$55, with an average of $21.07 (SD 5 $10.49). Participants tended to perceive the stimuli with
GAN-modified images as more novel than the stimuli with the original images when they
were unaware that generative AI technology had been used. Therefore, H3, H4, H5 and H8 are
supported. However, H6 (epistemic value) and H7 (purchase intentions) are not supported
because responses in all three groups hover around 4.5 (epistemic value: M 5 4.4–4.6,
SD 5 1.1–1.3; purchase intentions: M 5 4.4–4.6, SD 5 1.3). In addition, social value in the
GAN disclosure group is higher than in the GAN non-disclosure group, perhaps because
state-of-the-art technology is viewed as socially desirable among members of Generation Y.

5. Discussion
5.1 Main findings
This experimental study identified the influence of each dimension of consumption value
theory on willingness to pay and purchase intentions for retail fashion products designed
using AI-based cycleGAN. First, the results show that functional, social and epistemic
consumption values affect willingness to pay when GAN technology is used. This finding
may be due to the fact that GAN enabled individuals to apply their preferred images to the
designs. Customised designs have high hedonic value, which influences behavioural
intentions (i.e. willingness to pay more) (Feather, 2001). Moreover, consumers’ positive
assessment of GAN-generated fashion designs can be explained by the hedonic-motivation
system adoption model in terms of perceived ease of use and perceived usefulness, as well as
joy and curiosity, which can affect buying behaviour (Lowry et al., 2012; Watson et al., 2018).
The results for functional value for the groups exposed to the GAN-generated images show
that product designs met their functional needs (To et al., 2007). Previous results show that
the epistemic value of differentiating product characteristics affects consumer buying
behaviour (Biswas and Roy, 2015; Yoo et al., 2013). Interestingly, social and epistemic
consumption values affect purchase intentions when GAN technology is not used. In the
same line with this result, for the additional path strength comparison between GAN and non-
GAN groups, the relationship between epistemic consumption and purchase intention is
stronger in non-GAN group than GAN group. This finding may be due to the fact that
participants initially chose their preferred images before applying GAN technology. Generative
This finding is in line with the previous study indicating that personal preference affects adversarial
purchase behaviour (Aghazadeh et al., 2014).
Second, participants perceived stimuli with GAN-modified images as more novel than
network
original images when they were unaware that generative AI technology had been used. The technology
finding that a design’s consumption value via AI technology may lie in its ability to convey an
individual’s unique personality has important implications for buying behaviour in the retail
fashion context (Haines-Gadd et al., 2018; Noble et al., 2009). This indicates that creating new 73
designs using AI-based GAN results in higher perceived product value. Regarding
behavioural intentions, when consumers consider a product’s quality and novelty to be
high, behavioural intentions (willingness to pay and purchase intentions) may increase
(Atuahene-Gima and Li, 2004; Park and Lee, 2012). This result may also be explained by the
co-creation value generated by participants’ active involvement in the experiment. Uploading
a chosen image and then seeing the new, transformed image provides a sense of collaboration
with the product provider. Collaborating with customers on product innovation endeavours
leads to positive feelings and behaviours (Alcantara et al., 2005; Rathore et al., 2016). Thus,
using generative AI technology such as GANs may generate co-creation value for customers,
which enhances their engagement and encourages purchasing behaviour, whether they are
aware of the technology’s usage or not.
To investigate how awareness of the use of generative AI impacts consumers’ perceptions
of product value, the experimental group was divided based on disclosure status.
Interestingly, results for functional and emotional values are higher for the non-disclosure
group, reflecting conflicting perspectives on generative AI. This may be an example of
algorithm aversion or aversion to using AI in product design. Because the diffusion of AI is
transitioning from the current innovators stage to the early adopters stage (Brant and Austin,
2017), consumers who have not experienced the utility of generative AI may distrust it.
Moreover, results for functional and emotional value are higher in the non-disclosure group,
reflecting the substantial utility of generative AI. The cycleGAN algorithm does not produce
completely unique outputs, but transforms existing images into specific styles with specific
features. Consumers in the GAN-generated groups may have assumed the final designs had
been created by an expert. Disclosing the use of AI may have violated participants’
expectations, thereby decreasing their purchase intentions compared to the non-disclosure
group. Expectation confirmation theory (Lin et al., 2005) explains that a direct relationship
exists between the extent to which a product or service meets expectations and satisfaction,
which in turn affects buying behaviour.
Finally, social value is higher when the use of AI is disclosed, indicating that consumers
may change their perceptions of AI over time and that AI is socially desirable among
members of Generation Y. In addition, purchase intentions for GAN-generated products were
similar for the disclosure and non-disclosure groups, which makes sense because the
products were co-created and purchase intentions are highly tied to individual taste. Overall,
the results suggest that using GAN technology may create significant advantages by
expanding the scope and scale of the product design process and increasing perceived
consumption value.

5.2 Theoretical implications

This is one of the first empirical studies to apply consumption value theory to investigate the
effects of generative AI on consumer buying behaviour, as opposed to the development or
technical performance of algorithms and datasets (Banerjee et al., 2018; Hong et al., 2019;
Jetchev and Bergmann, 2017; Xian et al., 2018). The results verify the AI aversion
phenomenon by revealing the human tendency to rely more readily on human input than
 €
AI-generated input (Dietvorst et al., 2015; Eastwood et al., 2012; Onkal et al., 2009). AI aversion
IJRDM
49,1 is associated with lower functional and emotional value when the use of GAN technology is
disclosed than when it is not disclosed. This suggests that when the pace of technological
innovation is rapidly accelerating, consumers do not always view state-of-the-art
technologies favourably and associated product designs may be perceived as lower value.
AI aversion could be examined as a new key factor affecting behavioural intentions in future
studies on AI-based product acceptance.
74 This study is among the first to investigate the effect of GANs, a representative generative
AI technology, on consumer responses in a retail context. In the fashion industry, most
research on AI has focused on its use for classification and prediction, such as customer
behaviour prediction (Kreutzer, 2020), in-store customer behaviour classification (Chopra,
2019; Joseph et al., 2019), in-store monitoring (Dalta et al., 2019) and automatic fraud detection
(Ribeiro et al., 2016). Even though studies have examined how AI can enrich the customer
experience and reduce the cost of content creation by introducing multimodal content (Zhou,
2018), little research has been done on the impact of GAN-designed fashion products.

5.3 Practical implications

This study has practical implications for the application and diffusion of GANs. First, the
findings show that consumers value GAN-generated product designs more than regular
product designs. Thus, generative AI technology can be beneficial in contexts (e.g. retail
fashion) where product design is highly important. For example, GANs can help overcome
barriers to the adoption of autonomic shopping systems in the retail industry (De Bellis and
Johar, 2020). In a competitive environment characterised by a short product life cycle and a
rapidly changing market (Christopher et al., 2004), GAN technology can cost-effectively
enable rapid design processes which may create competitive advantages leading to increased
market share and revenue (Nakata et al., 2006).
However, there are still some obstacles to utilizing GAN in practice. GAN is easily
accessible through shared sources (e.g. GitHub), but there are many different models,
depending on the characteristics of the data and the purpose of learning. Therefore, there is a
need for more experts who understand both GAN and target application domains. In the
fashion industry, technical attempts are currently underway to take advantage of GAN
technology (e.g. Deverall et al., 2017; Cui et al., 2018; Xian et al., 2018; Banerjee et al., 2018;
Jetchev and Bergmann, 2017), but more financial investments are needed to cultivate experts
and expand its use across the industry. If such investments are made, GAN technology will be
able to be applied to various fashion categories.
Second, because emotional value ranks highest among the consumption values, GANs
should be used to generate customised designs. Existing technologies generally focus on
adding functional value, but AI technologies arouse consumers’ interest (Sohn and Kwon,
2020). Especially in retail fashion, where individual tastes and aesthetic needs are important,
innovative GAN technology must provide the value consumers expect (Lee et al., 2018).
Interactive technology has been shown to positively affect the consumer experience (Siregar
and Kent, 2019). Therefore, it is important to utilise data generated from existing AI-enabled
products or services to improve their emotional value.
Third, prior results suggest that the negative effects of AI aversion on social value may be
€
more prominent in product design contexts (Dietvorst et al., 2015; Eastwood et al., 2012; Onkal
et al., 2009). However, this study shows that social value improves when the use of GAN
technology is disclosed, so companies should emphasise that it is state-of-the-art.
Importantly, other consumption values may be negatively affected because customers lack
practical experience with this technology. Therefore, companies should give consumers
ample time to overcome cognitive dissonance and fully recognise the functional and
emotional value of GAN-generated products. One potentially effective marketing strategy Generative
would be to highlight the superior product designs created using generative AI and to adversarial
emphasise that rather than replacing humans; AI fosters collaboration.
network
technology
5.4 Limitations
Some limitations of this study represent opportunities for future research. First, the
only aspect of the stimuli that changed was the images on the tops. In the future, 75
researchers might be able to increase generalisability by taking factors such as texture, fit
and style into account. Second, although cycleGAN is well known and applicable to
product design, caution should be exercised when generalising the empirical results.
Researchers may find other uses for the proposed GAN technology in various contexts
that could have a more positive impact on consumption values and consumer buying
behaviour. Third, all participants were members of Generation Y, who tend to focus on
individuality when purchasing fashion products. The hope is that in the future researchers
will identify age-specific differences in perceptions of GAN-designed products by
studying consumers of different ages. Fourth, larger sample sizes would help validate
the results. With a larger sample size, researchers could explore possible gender-based
differences in the future.

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Corresponding author
Ohbyung Kwon can be contacted at: obkwon@khu.ac.kr

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