Introduction

Augmented Reality (AR)

Functional Mechanisms of AR

Consumer Responses

Method

Study 1: Comparisons Between AR- and Web-based Product Displays

Study 2: How AR-based & Web-based Product Presentations Affect Consumer Evaluations

General Discussion

Limitations and Future Research

References

Abstract

This study evaluates the effectiveness of augmented reality (AR) as an e-commerce tool using two products — sunglasses and watches. Study 1 explores the effectiveness of AR by comparing it to a conventional website. The results show that AR provides effective communication benefits by generating greater novelty, immersion, enjoyment, and usefulness, resulting in positive attitudes toward medium and purchase intention, compared to the web-based product presentations. Study 2 compares the paths by which consumers evaluate products through AR versus web with a focus on interactivity and vividness. It is revealed that immersion mediates the relationship between interactivity/vividness and two outcome variables — usefulness and enjoyment in the AR condition compared to the web condition where no significant paths between interactivity and immersion and between previous media experience and media novelty are found. Participants’ subjective opinions about AR are examined through opinion mining to better understand consumer responses to AR.

Introduction

Thanks to the rapid advances in technology, a greater variety of promotional tools are currently available for presenting products more persuasively. One new emerging technology that has been receiving massive attention from many companies is augmented reality (AR). Cosmetic companies such as Sephora and L’Oréal introduced an AR mirror that enables customers to experience virtual facial makeup (Jaekel 2016). Other large companies such as Snap, Nike, Adidas, Mini, and eBay have been eagerly adopting various forms of AR, allowing consumers to more vicariously and realistically experience their products (Archer 2015). Perhaps more interesting is Pokémon Go, a mobile game in which AR digital graphics are overlaid onto gamers’ real worlds through a mobile phone display which has had more than 500 million downloads in two months (Takahashi 2016) and generated revenues of $470 million in 82 days (Minotti 2016). The market size for AR was 640.2 million in 2015 and is expected to generate $120 billion in revenue by 2020 (Merel 2015). As such, AR is experiencing a huge popularity among companies and consumers. AR is defined as “the superposition of virtual objects (computer generated images, texts, sounds etc.) on the real environment of the user” (Faust et al. 2012, p. 1164).