Artificial intelligence (AI)-powered personalisation in service industries: An integrative review and future research directions

Artificial intelligence (AI) is transforming service industries by enabling personalised experiences that enhance customer satisfaction and operational efficiency. Despite its growing significance, research on AI-powered personalisation remains fragmented, being dominant by technicality and with limited consensus on conceptualisation, theoretical frameworks, key concepts, and typologies. This paper addresses these shortcomings through a structured review of 201 journal articles published between 2006 and 2024 using the Theory-Context-Method-Characteristic (TCMC) framework. The review offers valuable theoretical contributions and practical implications. First, it bridges service and computer science literature through a unified analytic framework and develops an updated conceptualisation of AI-powered personalisation. Second, major research gaps are identified, including limited theory-driven inquiry, concentration on tourism and hospitality contexts, an overreliance on algorithm optimisation methods (i.e., algorithm-based experiments), and insufficient attention to personalisation features, consumer psychology, and non-customer stakeholders. Third, a forward-looking agenda is proposed, emphasising stronger theoretical grounding, broader cross-industry/ cross-country research, and deeper examination of emotion-aware and anthropomorphic AI. Finally, for practitioners, the findings underscore that responsible and high-impact AI-powered personalisation hinges on three pillars: transparent data governance, intuitive and low-friction AI touchpoints, and a workforce equipped to manage and complement advanced AI systems.