Consumer’s Perceptions and Attitudes on Augmented Reality in Online Retail.

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INOM

EXAMENSARBETE INFORMATIONS- OCH

KOMMUNIKATIONSTEKNIK, AVANCERAD NIVÅ, 30 HP

,

STOCKHOLM SVERIGE 2021

Consumer’s Perceptions and

Attitudes on Augmented Reality in

Online Retail.

INDIRA AMARIS BAÑOS

KTH

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DEGREE PROJECT IN MEDIA MANAGEMENT, 

SECOND CYCLE, 30 CREDITS

STOCKHOLM, SWEDEN 2020

Consumer’s Perceptions and Attitudes on

Augmented Reality in Online Retail.

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SAMMANFATTNING

Denna studie diskuterar Augmented Reality (AR) som ett digitalt marknadsföringsverktyg inom onlinehandeln, med ett särskilt fokus på de uppfattningar och attityder som konsumenterna har gentemot verktyget. Projektet syftar till att ge insikter om hur man studerar AR i online-butiksmiljöer och berör också hur olika egenskaper hos AR kan påverka konsumenternas attityder till produkter som visas eller demonstreras med AR-verktyg. Den konceptuella ramen är baserad på litteratur och fallstudier inom AR, konsumentupplevelse och kund-värdeskapande.

Data för detta forskningsprojekt erhölls genom fördjupade intervjuer med deltagare som tidigare haft erfarenheter av AR. Efter att ha analyserat och kategoriserat sina svar föreslår resultatet att deltagarna har en övergripande positiv inställning till verktyget och att de redan är angelägna om att engagera sig i tekniken. Deras svar föreslog också att användningen av AR-verktyg i online-detaljhandeln positivt kunde påverka konsumenternas attityder till de marknadsförda tjänsterna eller produkterna som visas med verktyget. Beroende på vissa faktorer kan verktyget dessutom ha en positiv effekt på inköpsbeslutet.

Bland de negativa aspekterna anser deltagarna att tekniken inte Einns där ännu och måste förbättras för att ge ett meningsfullt värde för dem. Andra värdefulla insikter från projektet är relaterade till kundresan och det värde verktyget ger användarna.

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Consumer’s Perceptions and Attitudes on

Augmented Reality in Online Retail.

Indira Amaris   Royal Institute of Technology  School of Electrical Engineering and Computer Science Media Management +46 707578319 indiraab@kth.se ABSTRACT

This study discusses Augmented Reality (AR) as a digital marketing tool in online retail, with a special focus on the perceptions and attitudes which consumers hold towards the tool. The project, aims to give insights on how to study AR in online retail settings and also touches upon how different characteristics of augmented reality can impact the consumers attitudes towards products displayed or demonstrated with AR tools. The conceptual framework is based on literature and case studies in the Pields of augmented reality, consumer experience and, customer value creation.

The data for this research project was obtained through in-depth interviews with participants who have had previous experiences with Augmented Reality. After analysing and categorising their answers, the Pindings suggest that the participants have an overall positive attitude towards the tool and that they are already keen to engage with the technology. Their answers also suggested that the use of AR tools in online retail could positively affect the consumers attitudes towards the promoted services or products which are displayed with the tool. Moreover, depending on certain factors, the tool could potentially have a positive effect on the purchasing decision.

On the negative side, the participants consider the technology is not there yet and needs to be improved to deliver meaningful value for them. Other valuable Pindings of the project are related to the customer journeys and the value the tool provides to the users.

Key Words

Augmented reality, Retail industry, Consumer attitudes, TAM, attitude components, Digital Marketing, customer experience, costumer value.

1. INTRODUCTION

The introduction of new technologies has increased the speed in which every stage of the value chain is performed, from manufacturing to product search and from purchase to delivery. According to a forecast from Statista, by the end of 2020, global e-commerce sales will increase to about $4.2 billion to represent 16% of total retail sales, and these numbers will just continue to grow as internet usage keeps increasing . 1

However, the competition online is tough, and creating value is becoming an even more difPicult task for business and marketers that are looking for new ways to stand out from the competition. One way to succeed is to improve the overall customer experience introducing the latest digital tools to facilitate different processes.

Augmented reality is one of the digital trends that is shaping the future and that could deliver a lot of value for marketing, the retail industry, and more importantly for the consumers. According to RetailDive, the Integration of augmented reality in marketing efforts aims to build consumer relationships, boost sales, and add value to the shopper experience.

Augmented reality (AR) has emerged as a new technology available to retailers to engage with costumers in an unique and vivid way (Javornik, 2016; Yim, Chu, & Sauer, 2017 in McLean & Wilson, 2019). Azuma (1997) explains that augmented Reality (AR) integrates computer generated objects with the real world and provides individuals with real time interactions. Given to the adoption of the ubiquitous smartphone retailers and consumers interest in AR has grown, and many retailers are now implementing AR features in their mobile applications (Dacko, 2017). In the context of retail,

Meyer Susane, (2020) Evolving Ecommerce: 14 Trends Driving Online Retail In 2020, Accessed :6April, 2020. Recovered at: https://

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AR involves any approach that combines computer-generated and real world image and/or location information for a richer, more immersive retail experience (Liao, 2015; Pantano, 2009). AR gives retailers another opportunity to attract and interact with their target audience, giving them the illusion that the Company's virtual objects and the real word coincide in the same environment, this provides a frame for non-traditional interactions with the customers, delivering an entire personalised experience to the potential user.

While AR is in its infancy in terms of its application in consumer markets, spending on the technology is expected to reach $60 billion by 2020,(Porter and Heppelmann, 2017) giving to retailers a signiPicant reason to invest in the technology. Nevertheless, additional research is critical to determine if the technology adds sufPicient value to customers in order for companies to decide whether or not to invest in integrating AR solutions in their set of tools. At the same time, Foruoudi et al (2017 p,272) highlights the lack of research determining how interactive technologies (as Augmented Reality) inPluence the customer experience. Regarding this question, Huang and Liao (2015, p. 269) stresses the importance of further research that evaluates the users’ perception of AR and the importance of understanding the elements which create value for the customer. Therefore more insights from the customer perspective are needed to understand the value that the technology is adding to their journeys. Liao et al. (2014, p. 1432).

Here is where relevance and the motivation of this project lies. This study aims to narrow down the gap of knowledge regarding the customers perceptions and attitudes towards augmented reality in retail and reviews aspects that are relevant for and improved AR costumer experience. To achieve this, a literature review of pertinent models has been made, choosing the Technology Acceptance Model, as one of the central frameworks for the project, since this model has as objective to analyze how people adopt and accept a technology (Huang Liao, 2015, p 270). However, as the main focus of the study is consumer attitudes and perceptions, concepts from different attitude models have been reviewed as the dePinition of attitude and its components, which are the affective, behavioural, and cognitive components. Besides this, customer value creation and customer experience frameworks were also reviewed as both are essential in the moment of designing marketing strategies, recognising new product opportunities, and enhancing service and product concept. The review of these frameworks was pertinent and helpful for determining which factors are relevant for a product to deliver value to consumers. All these

frameworks and theories served as a base to design the instrument, gather the project data and draw the conclusions.

2. THEORiCAL FRAMEWORK

Attitudes are believed to directly inPluence behavior. This is the reason why marketers need to have a clear perspective of consumer attitudes toward speciPic services or products before launching them to the market. In practice, the term ‘attitude’ is often used as an umbrella expression covering such concepts as preferences, feelings, emotions, beliefs, expectations, judgments, appraisals, values, principles, opinions, and intentions (Bagozzi, 1994).

Although there are different dePinitions of attitude, the one fact which many of them have in common is that an attitude is held in reference to something or someone and that they affect the behavior of the individual when they come into contact and interact with that something or someone. Ajzen & Fishbein (1977) state that attitudes are held with respect to some aspect of the individual’s world, such as another person, a physical object, a behavior, or a policy. Therefore, the way a person reacts to his surroundings is called his attitude. Baron & Byrne (1984) dePine attitudes as relatively lasting clusters of feelings, beliefs, and behavior tendencies directed towards speciPic persons, ideas, objects, or groups. Another dePinition proposes that and attitude is a tendency to respond to some object or situation. According to (Malhotra,2005), an attitude is a summary evaluation of an object or thought. The object or phenomenon can be anything a person discriminates or holds in mind and may include people, products, and organisations (Bohner, G. and Wanke 2002).

Allport (1935) adds that an attitude is not passive, but rather it exerts a dynamic inPluence on behavior. He further stated that an attitude is a mental or neutral state of readiness, organized through experience, exerting a directive or dynamic inPluence on the individual’s response to all objects and situations to which it is related. In the particular case of this project, we wanted to analyze if the subjects have already formed some sort of notions after their previous experiences with Augmented Reality and if they have already formed a psychological tendency that is expressed by evaluating a particular entity with some degree of favor or disfavor (Eagly & Chaiken 1993).

It is also pertinent to understand the three components that contribute to the formation of an attitude as explained in the Model of Attitude (ABC) proposed by Ajzen & Fishbein, (1980). The Pirst of these is the affective component; this is the emotional

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response that a subject can have towards an attitude object, (Visal Jain, 2014) which could be, for instance, liking or disliking AR tools.

The second component, termed as the behavioural, is a verbal or non-verbal tendency by an individual, and, it consists of actions or observable responses (favourable/unfavourable) to do something regarding an attitude object. Wicker (1969). In the context of the project a favorable or unfavourable tendency of the subjects to interact with an AR tool when making an online purchase.

Lastly, the cognitive component is an evaluation of the object and that constitutes the subject’s opinion about the object. According to Fishbein & Ajzen (1975), ‘cognitive’ refers to the thoughts and beliefs an individual has about an object. He also states that a belief is information a person has about an object, this information links an object and an attribute. This is another valuable aspect to inquire about, the attributes that subjects can attach, or link, to augmented reality.

Another model of attitude which is closely related to the focus of the project is the Technology Acceptance Model (TAM), proposed by Davis (1989, 1993). According to him, TAM is an applied model of attitude in which the intention to use a technology is inPluenced by the attitude towards that technology and the perception of its usefulness. Attitudes, in turn, are inPluenced by a person’s beliefs in how useful the technology is and how easy it is to use. In the context of the project, it was necessary to evaluate the participants beliefs towards AR tools in the e-commerce context and additionally to analyze if the participants previous experiences with the technology have already helped them to form beliefs about the attributes of the technology, thus affecting their intentions to engage with an AR tool when the opportunity arises. As stated by Djamasbi et al. (2009) The perception of ease of use is measured by the degree to which using a technology is free of effort and the perception of usefulness is measured by the degree to which the technology can help to improve task performance. This Model ratiPies the importance of researching the consumers attitudes towards AR - this subject will be explored in the section titled ‘Discussion’.

Further literature was reviewed to Pind a theoretical background about how augmented reality service could add value to consumers when buying products with the help of AR. For this, the customer value creation framework was very useful. According to Woodruff (1997), customer value has long been recognized as a central concept in marketing and the fundamental basis for all marketing activity Holbrook (1994). It has been suggested as the purpose of organizations (Woodruff 1997) 1997), and the main key to success via differential positioning Cooper (2001), and a precursor to customer satisfaction and loyalty (Woodwall 2003).

Woodruff dePines customer value as “a customer’s perceived preference for, and evaluation of, those product attributes, attribute performances, and consequences arising from use that facilitates or blocks achieving the customer’s goals and purposes in use situations” (1997, p. 141), which can be e va l u a t e d p r e o r p o s t p r o d u c t u s e . H i s conceptualisation incorporates multiple contexts and multiple cognitive tasks as the preference for and evaluation, and multiple assessment criteria like attributes, performances, and consequences. This dePinition is well aligned with the focus of the research and we will analyze further how the attributes of the technology contribute to facilitating or blocks the customer from chivied their goal, in this case, reviewing a product with AR a product online. Many dePinitions of Customer value have been proposed during the years, however, there is no commonly accepted dePinition of customer value - neither a dePinitive framework nor typology of customer value. Nevertheless, for the sake of this project, we will use the one proposed by Smith and Colgate.(2007). They present a customer-value creation framework that identiPies four main categories of value which can be generated by companies and could be helpful to understand the value that a costumer/users can attached to an AR preview tool. these categories are:

-Functional or instrumental value: which are the attributes of the product or service itself; the extent to which a product is useful and helps to fulPill a customer’s desired goal.

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-Experiential/hedonic value: the extent to which a product or service creates appropriate experiences, feelings, and emotions for the customer.

-Symbolic/expressive value: the extent to which customers attach or associate psychological meaning to a product or service. -Cost/sacriPice value: the cost or sacriPice that would be associated with the use of the product. 3. SCOPE OF THE STUDY AND METHOD Research question

What is the consumers overall attitude towards AR tools to review products online?

Method

This project has a qualitative approach and the main goal is to obtain valuable insights about the consumers attitudes and perceptions of augmented reality in retail. The study also aims to contribute to closing the research gap regarding the use of Augmented reality as a digital marketing tool for retail. To provide these insights and draw some conclusions an instrument based on the theoretical framework was design. The chosen method was in-depth interviews, therefore, after the literature review three big areas were chosen to build and instrument that could help answer the projects main question. The chosen areas were attitude components, intention to use the technology and value added to consumers, for each theme or category questions were formulated to build an interview guide presented in the Appendix 1 which may be found in the last section of this document. The main objective of the interviews was to Pind answers to the questions for each of the categories but also to serve as a conversation starter, giving room to the interviewer to ask new questions as the conversation developed. During the conversations with the participants a new important question arouse during the conversation namely, the customer journey, therefore, this additional category was added, and then literature on this Pield was also briePly reviewed and added to the study.

Other relevant questions for the project were: Does the use of technologies as AR in online retail have a positive effect on the consumers' attitude towards the products or services promoted with the tool? Does augmented reality affect the decision process, when buying products online? And how do AR applications

or tools add value to the customers and their journey?

The project's sample consisted of eight people between the ages of 24 to 30, heterogeneous in terms of gender, Pive males and three females. All the participants have had previous experiences with AR, however, none of the participants have had experiences with augmented reality in the context of retail. All of them had used AR for entertainment, for example, games, social media AR Pilters, real-time translations or yelp. For this reason before the interviews were conducted they were given a demonstration a one minute demonstration video . 2

The video explains how the AR IKEA APP works and how the user can visualise objects in real time with the help of AR. They were also requested to download the AR app Stylelab by Synsam, a Swedish eyewear company or to try the desktop virtual try of the Misterspex website (two off the participants tried 3

neither Symsam app nor the desktop try on, however they have use AR before in other contexts therefore they had a clear idea of the affordances of the technology). The intention of this was to give a clearer context to the participants about how the technology is used in retail, so that they could in turn provide clear and detailed descriptions of their actions, attitudes, feelings and perceptions of their previous experience with AR; and their possibles experiences with an AR tool in retail. The duration of the interviews was approximately 30 minutes with each of the subjects. All the interviews were recorded and afterwards the participants answers were summarised as showed in Appendix 2 at the end of this document.

4. RESULTS AND ANALYSIS

After interviewing the participants, the data collected was analyzed and then categorized into smaller themes or topics which could help to facilitate answering the main questions of the project, based on the theoretical framework proposed in section 2. The chosen themes were: attitude components, intention to use the technology, value-added to consumers, and customer journeys.

Nevertheless, it is important to emphasize that the project sample was too small to assume that these conclusions represent the ones of the general population in this age range. Therefore the conclusions drawn from the project are aiming to only be insight and to serve as a starting point of rePlection about the current state of the technology from the users perspective and connect these Pindings to the theoretical framework.

Demonstration video IKEA AR tool https://www.youtube.com/watch?v=UudV1VdFtuQ

2

Desktop virtual try on https://www.misterspex.se

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Attitude components

During the interview phase, the participants were asked questions related to their previous experiences, knowledge, or information they have about the technology. Questions about the perceptions and emotions towards AR tools were also asked. Additionally, they were also asked about their thoughts in regards to the tool after the demonstration video. From the participants’ answers it was possible to observe:

All the participants were capable to give an accurate description of the technology, using phrases as “a technology that enhances reality adding digital features” or "a tool that allows you to place digital objects on top of a real view of the reality” or "combining technology with the real world to get a new outcome”. These descriptions are very close to those proposed in the reviewed literature. The interviews were also asked to name adjectives to describe the technology, all of them attached positive adjectives to the AR tool. Therefore it could be suggested, that evaluation of the cognitive component was in general positive.

Half of the participants considered this technology useful, the other participants, described the technology as innovative, interesting, and interactive. When talking about the decision process, all of them agreed that an augmented reality tool that assists online purchases could affect the purchase decision positively. These questions are related to the affective component.

When the interviewees were asked if they would make a purchase basing their decisions on information obtained with an AR overview tool, Pive of them said they would be willing to do it, however, there are certain conditions for it. The conditions to Pinalise a purchase after reviewing a product with AR were related to the quality of the AR tool or app, such as image quality (photorealistic enough), synchronisation of the virtual items with the real view.

Besides those, other conditions were mentioned but they were more related to the product as the price of the item, thus being easier for them to take this decision and complete the purchase if the price of the product was low. The size of the product was also an important condition along with the possibility of easy returns. With small products, they could take the decision only using AR, for large products they would rather preview the product with the AR tool and then visit the store to have a real view of the item.

The other three respondents said they will not do it under any circumstances because the current quality of the tools does not seem accurate. However, they

would use the tool to obtain additional information and inputs about the product, but they still would need real interaction with the product.

Intention to engage with AR tools

Once the participants watched the demonstrative video and used the ar tools (two of the participants did not try the tool Synsam app neither the desktop try on, however, they did watch and agreed to understand how the tool works) They were asked if they would use AR to review products online.

All the participants said they would try the technology to preview a variety of products online. However, the majority of them thought they would be more willing to use the tool to preview certain products than others. For example, they would appreciate it for items as furniture or home decor, 4 of them would also value having the tool to try on clothes.

The fact that all participants seemed open to try or use AR tools might suggest there is a readiness in the participant's mind to interact with the technology. This readiness could be related to the fact that all of them have had previous experiences with AR that were somehow described as positive. This probably helped them to form a prior opinion of the technology.

Value-added to the user and customer journeys

All the participants believe there is a lot of potential for AR in retail settings. However, the majority of them think the tool does not provide signiPicant value yet. This would be discussed in the discussion section. Most of the interviewees think the value an AR tool would provide for retail is instrumental. The participants state that these tools would be useful for getting the Pirst impressions of products, get a better understanding of dimensions and textures. They could also get additional information that cannot be provided by a picture or text. Some of them think AR could help the search process by narrowing down the number of items and discarding those products they don't like. Besides, they would use it for matching the products to other items they own, for inspiration, and some of them think it could help them to avoid returns.

The subjects were also asked if the technology could in some way help them to speed up the purchasing process, only one of the respondents think AR could help to speed up the process and save time and energy by doing everything from home. Other respondents thought it could save them time by helping them to avoid returns. And others think that perhaps the decision process would be longer since they would probably have to spend time trying out

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different products with the tool. The majority of them said they were surprised by the quality of the Ikea app. This leads them to believe that the tool would be great for companies working with furniture, home decor or renovation.

Concerning the experimental value, which is related to the emotions and feelings the technology could arise in the participants. They described their Pirst experiences with AR as fun or interesting however they have never use the technology to buy products. Later they were asked if they believe AR would affect the purchase decision, Pive of them said the tool could help them to feel more certain of the attributes of the products and two stated that the tool could convince them about the product being the right choice for them and they would probably feel more satisPied with the purchase.

A participant stated “This tool would be really good to

help decrease the high return rates in retail which are very inconvenient for the customer and a net loss for the seller” Other participant stated that for him the value of AR in retail resides in its ability to give a clearer picture of the product to the customers. He stated, “It is hard to imagine the dimensions of a product if you only look at a picture, but AR can give you a better idea on how products would look on your body or >it at your home for example”.

On the other hand, many of the participants gave negative comments in regards the quality of the service in an e-commerce setting. Their opinion was formed based on comments they have previously heard, and after watching the example video or have tried the AR apps or the desktop virtual try-on themselves. “The technology needs to improve, become

more exact and easy to use. I don't know if it has to do with the camera or with the movement recognition tech but something feels a bit off, for example with the Symsam app and I think it doesn’t feel too realistic for clothes either. It feels more realistic with furniture, for example, with the Ikea app when you are placing the items, you can place them correctly and get a close idea of the products but it takes some skill and technique to do it”. So for the tool to become common

among the general population the tool needs to be much easier to use. For products like clothes, watches, or accessories it does not provide enough value for me to use this tool. However, most of them believe the technology would be Pine-tuned in the upcoming years and then would it be a substantial experience for the users and it also would be a great source of value for businesses in the retail industry. Many of them agree that the tool is still not providing enough value for people to feel trigger to try the technology and to do an effort to use the technology, For instance learning skills, downloading a tool, take

photos or videos to scan dimensions or body measurements.

According to them, this is for the speciPic case of clothing websites platforms, platforms, or apps. One of the participants comments:

Another interesting Pinding was related to customer journeys. The interviewees were asked how would their customer journey look if they wear using AR, to Pind out how they use the technology would differ. In their answer, the subjects proposed different dynamics in their journeys.

Some of them would use the AR tool in a linear manner. During this “linear journey” the user starts online, reviews different products, try to understand textures, and dimension by placing the products in their home (in the cases of furniture, home decor, technology, home renovation materials) or trying the product on themselves (clothes, shoes, sunglasses or other accessories, jewelry, make up), the customer Pinds the product that better suits its needs and makes the purchase online. This costumer was proposed as an option for low price items and standard products like bookshelves, or small home decor, basic clothing items.

A participant commented: “For very expensive items, I

would start of>line and then try the AR tool at home. For cheap items, I could probably start online and do the purchase right away as long as the product is also easy to return“.

Some other participants proposed a “reverse

journey” they talked about this journey giving as an

example large items as furniture, Ploors, home decor. They would start their journey ofPline by doing an in-store search, sorting out the products they don't like, and having a close examination of those products they like the most, to Pinally pick a selection of products that they would later try on at home with the help of AR, and check for example if the dimensions are correct for their homes, check if the colors match with other items they own and then Pinalize the purchase online. In this case, AR generates value for the consumer give assurance to the customer about aspects as dimensions, making them feel the product is adequate for them and thus helping to prevent a return.

Another customer journey was proposed by the participants, “The circular journey”. The customer starts online, uses AR as a tool to narrow down the search and Pind the products she/he likes the most, makes a small selection of products she would like to see in real life. The customer then visits the store and gets a real feeling of the product and continues to further narrow down the search till choosing the product of its preference, at this point the customer

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either makes the decision and makes the purchase or goes back to home to use again the technology to try out the product he/she liked at home.

One of the participants comments about his ideal customer journey buying with the help of AR: “I go to

the store usually for inspiration, but I would like to buy more online, because of convenience. Personally, the ideal customer journey for me would be to start of>line, see and feel the product and pick my favourites items, then go home and try the product with AR mix and match them and see how they >it and then make a decision.”

This journey was proposed for large high price items, that are also inconvenient to return because of the weight or size. In this journey, the AR tool was mainly used as a curation or Piltering tool to facilitate narrowing down the search and later to get assurance about questions as dimensions.

5. DISCUSSION

In this section the Pindings will be connected to the theoretical framework and some rePlections about the subject, in general, would be made. To start the discussion the connection or link between the emotional and cognitive components and attitudes and behaviours would be clariPied. Beliefs are based on previous experiences, while feelings represent how we perceive something. Our behavioural intentions or attitudes towards an object come after we recognised the feelings a given attitude object arises on us, this emotional process can determine someone behaviour towards an object. In the case of the interviewees any of them had previously use AR to make online purchases, however the majority of them have had somehow positive experiences with AR for entertainment, the emotions they felt while using AR previously were most probably positive since all of them link the technology with positive adjectives and besides they expressed their wiliness to use AR in the future, even though acknowledging that the tool still needs to be Pine tuned.

Attitude components

The Pindings suggest that the use of technologies as AR in online retail could affect in a positive way the consumers' attitude towards the products or services promoted and/or displayed with the tool. The results also suggest that augmented reality could positively affect the decision process when buying products online.

The attitude towards an attitude object (in this case AR tools in websites, shopping platforms, or apps) inPluences how an individual acts. Since most of the questions related to the cognitive and affective components of attitude had positive answers, it could

be suggested that the behaviour towards the technology would also be positive.

The ABC model of attitude Fishbein & Ajzen (1975) explains that any particular attitude can be based on one component more than another. This means that each component can also be the answer to the question: where does an attitude come from? So an attitude can be formed based on a positive experience or a feeling the technology arises on the use.

In the cases of the participants, it seemed their attitudes are mostly based in the affective component and cognitive components given to their previous experiences and knowledge they have with and about the tool. According to the ABC model, attitude components help an individual to form an attitude towards an attitude object, in this case, AR as a tool to overview products online when there is an intention to buy.

According to the participants' answers, the reasons why they believe AR would affect the decision process when buying online is because they would get additional info that would clarify more their ideas about a product. In this way, AR tools can deliver valuable info that consumers cannot get only based on a picture or text.

Additionally, the participants think the tool could help them feel more convinced and certain that they are choosing the right product for them. If this is the case for the general population, companies that use AR could have a competitive advantage over companies that are not using the technology. During the interview one of the participants said they don't like or avoid buying online because they feel uncertain and do not have a clear idea of the product.

Intention to engage with AR tools

The fact that the interviewees knew about the concept and know the attributes of the technology increases the possibility for them to start to interact and engage with the AR tool, according to the TAM model. Since the technology then becomes more visible for them, it becomes easier for them to spot the tool when is available in different websites or apps than for the people than don't even know the concept of augmented reality or those who have never have an experience with the tool and don't know how it works and how could it help them. It was also possible to observe that all participants proposed positive adjectives when describing AR. The adjectives attached to it were: innovative, interesting, useful, interactive. This seems to suggest that the attitude toward the technology is favorable. According to the Technology Acceptance Model, the intention to use technology is inPluenced by the

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attitude towards that technology and perception of its usefulness. Davis (1989, 1993). Heelet et al (1979) propose that an individual overall attitude is a function of beliefs about an object’s attributes and the strength of these beliefs. In this respect, he comments that the attributes ( as useful in this case) that consumers give to a product or service have a big impact on the decision-making stage.

The majority of the subjects won’t decide to buy a product online by only basing their decisions on an AR product overview. However, some of them would do it as long is not a large item or the price of the product is high.

All of the interviews stated they would appreciate having an AR product overview tool when buying products online. The possible reason for this is that they have already had positive experiences with AR, although not in a retail setting but for entertainment purposes. They have previously used AR in games, social media Pilters, goggle translation with ar or Smart apps where there is an integration of AR info, for example, the yelp reviewing App.

According to the TAM model, readiness is one of the Pirst requirements for a user to engage with technology. Besides, it's also an important factor that companies should have considered when planning to introduce or implement a new digital tool to facilitate the different processes and engage with their potential customer because without that readiness interaction with products or services becomes less likely.

The readiness to engage with the technology is a good start and an opportunity for the retailers, to improve the relationship with their clients or start a new relationship with potential costumers by delivering a new interactive experience. Engaging the user is vital for companies, it has become a strategic imperative for sustaining a competitive advantage. McLean, Wilson. (2019). The value creation framework highlights the importance of involving consumers in speciPic interactions and/or interactive experiences to build and enhance consumer relationships. Brodie, Ilic, Julic, & Hollebeek (2013) in McLean, Wilson. (2019)

Value-added to the user and customer journeys

Dacko states that with the adoption of the ubiquitous smartphone, developers, retailers, and consumers' interest in augmented reality has signiPicantly grown, as such many retailers are now implementing augmented reality features into their mobile applications (Dacko, 2017). That is why some of the big actors in the retail industry have for some years been taking the lead in the adoption of AR. Some of

the most famous examples of companies using the technology are IKEA, Sephora, ASOS, Amazon. These companies use AR as a tool to facilitate a variety of customer activities as product overview, product trials, virtual try-on, information search and acquisition, aid consumers during decision making, Heller, Chylinski, Ruyter, & Keeling, (2019), but also to decrease the high return rates that are one of the biggest downsides of online retail. Although the participants have not use the technology in a retail setting they seem to have a clear understanding of how the technology could add value to business and customers and which activities or tasks an AR tool could facilitate.

One of the biggest uses the tool offers is presenting products and giving users a better understanding of sizes and dimensions. According to Keiser and Garner, The companies have difPiculties in effectively presenting the sizes since most of the sizes are based on measurement charts or size guides of one “ideal” consumer and embodying this in a single Pit model. Keiser & Garner (2003) in Embaye & Kostadinova. (2018). Although half of the participants of the interview said they won't buy clothes using AR, they still acknowledge the potential of the tool on this regard and think it would be a disruptive tool for the fashion industry in the future when the registration problems are minor. The other half of the participants seem positive about it and think it is one of the biggest benePits of the technology. One participant comments “I'm excited to try AR to try products at

home but also the magic mirrors to try clothes in-stores instead of queuing to try on products”.

As presented in the results session, one of the participants commented about the poor image quality of AR tools. What this participant is referring to it is the called registration problem of the technology. Azuma (1997) commented one of the basic problems currently limiting augmented reality applications is the registration problem. The object in the real and virtual worlds must be properly aligned concerning each other, or the illusion that the worlds coexist will be compromised. This is a problem that has been persistent from the beginning of the tool, and although signiPicant improvements have been made, it still needs further revision. Most of the participants believe the technology needs to be improved to deliver signiPicant value for them, however, they all think this would be Pixed soon and that the tool could deliver both experimental and instrumental value for them.

According to the value creation framework reviewed before, and Experiential value is concerned with the extent to which a product creates appropriate experiences, feelings, and emotions for the customer.

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For example helping them feel more certain the product is the right for them

An instrumental value Woodruff (1997) is concerned with the extent to which a product has desired characteristics or functions and is useful. (For example the performance quality of the AR tool). This is also related to the Customer journeys the participants proposed since the paths of their customer journey seemed to be somehow related to the type of value they attach to and AR tool when buying online.

Regarding the customer journey, the theory suggests that winning companies and brands owe their success not just to the quality and value of what they sell, but to the superiority of the journeys they create Edelman Et Al (2015). This is a reality among different industries, where big disruptors have achieved their success by offering the same products or services but improving the overall customer experience with the help of technology.

Edelman (2010, cited in Scott 2017, p.173- 174) has developed a new approach to the customer journey where the classic linear path is abandoned. Scott et al. (2015, cited in Scott 2017, p.174) argue that this is due to a fact that customers are interacting with multiple online and ofPline channels in their shopping decisions. When talking with the participants about their customer journeys only two of them said they would linearly do their journey. The rest of the participants proposed different paths as propose for Edelman.

Two participants proposed a sort of reverse journey when they start ofPline and then moved online to try the AR tool and make the purchase decision. The majority of the subjects said they would circularly do their journeys. To describe their journey they did not use the world linearly, reverse, or circular, however, it could be concluded by looking at the steps of their proposed purchasing process. Scott states that the circular process is an alternative to the traditional linear approach, he states that this type of journey suits better consumers in the digital age (Scott, 2017, p. 175). Scott (2017, p.176) describes how the circular journey initially starts with awareness of the product or service and develops into interest, consideration of the feasibilities, and continues with a search for information. This is what the participants commented when they said they would start online to search the product and interact for the Pirst time with the product, get information about it, and assess the qualities of the items.

For companies in the retail industry looking to implement AR in their set of tools is important to understand how customers would be using the tool and the types of actions, perceptions, and interaction

that the tools enable depending on the content available to users in a speciPic AR layer. Nonetheless, further research in the customer experience and the customer journey Pield is necessary to understand in depth the different interactions that could result from using the technology. And also for companies to understand if the tool creates enough value for customers. In this way, more companies could feel the incentive to invest in the tool.

For companies to build a competitive advantage with AR is important to gain knowledge about the customer behavioral processes and consequently generate desired reactions on the various key touchpoint throughout the customer’s decision-making process (Lemon & Verhoef, 2016, p. 69; Scott, 2017 p. 173). These different interactions that could be potentially be enabled with the AR tool could also become a good source of data for the companies.

Future of AR

The participants commented about their opinions concerning the future of AR. It seems to be a general agreement among them in regards to the potential of the technology, all of them see a bright future in the technology and think it would start to become more popular in the years to come. However, it seems the technology still needs to be improved to reach its full potential and deliver signiPicant value for business and consumers. Meanwhile, the majority of them think the tool delivers a lot of value for entertainment proposes, education, and possible for industries where design is primordial as architecture or engineering and off-course retail, speciPically the furniture, home decor, and fashion industries. Industry leaders are already jumping in the trend. In 2017 IKEA launched their AR app that since then has been the object of research of multiple studies, some of them were reviewed for the purposed of this project. And this year (2020) ASOS debuted its AR tool to the market that can be found on its product pages.

In a quantitative study conducted in Sweden, that included the opinion of both consumers and the retail industry actor, some of the retailers stated that since no one else from their direct competitors in Sweden is using an augmented reality tool as part of their product evaluation tools, this could potentially bring the Company sustainable competitiveness and become market leaders. Embaye & Kostadinova. P 39, (2018). DeMers, (2016) comments that companies must invest in digitally relevant methods for advertising to maintain a competitive position in this rapidly changing digital environment.

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Limitations of the project

It is important to comment that the present project presents a lot of limitations the Pirst and the most obvious is the size of the sample, however, many of the research projects that are done from the users perspective in the Pile of AR also used similar tools and also small samples, this is perhaps due to the limited knowledge of the population about the subject. Another disadvantage of the project was the lack of the perspective of experts in the area, expert opinion would have been very pertinent and helpful at the time to build the instrument and evaluate the participant's answers.

From a measurement perspective, it was difPicult to conPigure an instrument that could be a relevant source of data when the subjects had no previous experience with AR to perform online purchases. Therefore, it is probable that the accuracy of the participants' answers and the depth of them were limited to their lack of experience and knowledge about the area. Although the participants were provided with a demonstrative video of the technology, the results could have been richer with more empirical behavioral data. Another limitation is the lack of theory on the speciPic topic of attitudes and perceptions towards technology.

But as consumers' use of augmented reality increases, there is a growing need to understand its inPluence on customer behavior, its purpose of use, and the experience it delivers (Javornik, 2016 in McLean & Wilson, 2019). For sure when the tool will become more accessible to companies and the technology would start to become more accessible to companies and visible to the general users more quantitive research from different perspectives would be conducted.

6. Conclusion

Technological innovations have changed the consuming and shopping patterns of society, it has also meant a rise of competition for actors in almost every industry. This has pressured companies to Pind new ways to compete by creating products and services that are constantly more personalised, have higher quality, and are produced more sustainably. In the speciPic case of the retail industry, it has also made it necessary to utilise digital tools and services that increase the chances of reaching out and engage more deeply with customers thus creating more value for them.

The retail industry had gone through many signiPicant changes in recent years. Among the biggest change was the shift from the in-store shopping experience to an online one. The years to

come bring a lot of uncertainties to retailers that not only struggle with an increased number of competitors but also are required to fulPill the ever-growing demand and expectations of convenience, quality, sustainable practices, high customization, and richer customer experiences. For the speciPic case of the retail industry, technology has brought a lot of challenges but also opportunities as the rise of solutions to support companies in speeding up different processes in the value chain to fulPill the growing need for immediacy.

One of the tools or technologies that could potentially deliver signiPicant value to consumers and actors in the retail industry is Augmented Reality. Although AR has been around for many years, little research has been conducted when it comes to the consumers' perspective. Additionally, there is still a lack of knowledge about its applications and it is unclear to date how and how much can this technology add value to consumers and businesses. Despite the growth of online retail, the sector still faces multiple challenges, one of the biggest ones is product evaluation. To tackle this problem different AR tools are starting to be implemented for retailers. This study aimed to contribute with insights about Augmented reality as a digital marketing tool in online retail, speciPically about the consumers' perceptions and attitudes towards AR tools.

The main Pindings of the project suggest that the use of AR tools in online retail could affect positively consumers' attitude towards the products or services promoted and displayed with this tool. The results also suggest that augmented reality could positively affect the users' decision process by providing them with more certainty about the products. On the negative side, the participants stated, that they don't feel the technology is mature enough to provide signiPicant value, mainly because technical aspects as the registration problems of the technology need to improve or be Pine-tuned. For instance, the images need to be more photorealistic to be effective and creating the illusion that the virtual and real-world coincide, or the capability of the tool to synchronize accurately with the background or follow the movement of the user.

Other valuable Pindings of the project were related to the customer journey and the proposed ways in which the participants could use the technology. Some would use it in a linearly, whereas others would do it in a reverse or in a circular way, depending on their preferences or priorities. Further research on this area could help companies to improve the customer experience in the different touch-points that constitute the path to make the purchase. However, the project sample was too small to assume that these conclusions represent the ones of the

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general population in this age range. The Pindings of the project aim more to serve as an insight into the consumer perspective and attitudes towards the technology, aiming to help to close the current research gap concerning Augmented Reality and its commercial uses.

Therefore the conclusions drawn from the project are aiming to only be a contribution and to serve as a starting point of rePlection about the current state of the technology from the users’ perspective and also to contribute to the current discussion about how AR applications or tools can continue to add value to customer journeys and improve their shopping experience by facilitating the entire process.

2020 has been an exceptionally hard year, the Covid-19 virus, put almost the entire world in isolation and left a lot of business of all sectors and particularly retail in a very troubling position. Some experts have commented that perhaps the global pandemic could be disrupting retail by forcing them to Pind alternatives to engage with their clients in this time of social isolation. Augmented reality is one of the tools that retailers could probably start to consider the most after this year, but again more research in regards of the value provided for the technology and how it enriches the user experience needs to be conducted, but it will probably start to happen as the technology gains more visibility and popularity.

7.

REFERENCES

Ajzen.(1991). The theory of planned behaviour. Ajzen & Fishbein. (1980). Theory of reasons action as applied to moral behavior - A conPirmatory analysis Arestov & Armström.(2018). Bridging the digital and physical worlds: The deployment of augmented reality in a retail setting a case study on IKEA. Azuma, A. T. (1997). A survey on augmented reality.

Presence, 6(4), 355–385.

Bank.(2018).Integrating online and ofPline worlds through mobile technology in physical stores: A quantitative study investigating the impact of technology readiness on the technology acceptance model for mobile technologies in physical retail Chen, E. (2016, January 16). How augmented reality will shape the future of Ecommerce. Entrepreneur. https://www.entrepreneur.com/article/287687. [Retrieved 2020, 20,04].

Dacko, S.(2016). Enabling smart retail settings via mobile augmented reality shopping apps. Technological forecasting and social change, 124, 243-256.

Davis, F. D.(1986). A Technology Acceptance Model for empirically testing new end-user information systems: theory and results. Doctoral dissertation. Cambridge: Sloan School of Management.

Dybdal Andersen & Schreck. (2018)Enhancing consumers' purchase intention by augmented reality: The relationship between augmented reality and Swedish millennials’ online purchase intention of shopping goods

Embaye & Kostadinova. (2018) Augment App: Potential Implications on E-commerce: A Multi-Case Study on Swedish Online Fashion Retailers

Hellgren. (2019). AUGMENTING THE REALITY: Can AR Technology Entice Consumer Engagement? A Quantitative Study

Hong & Zhuqing. (2012) New Thoughts of Customer Value Study

Huang, T-L., & Liao, S. (2015). A model of acceptance of augmented reality interactive technology: the moderating role of cognitive innovativeness. Electronic Commerce Research. 15 (2), 269–295. Kristensson. (2019) Future service technologies and value creation

McLean, Wilson. (2019). Shopping in the digital world: Examining customer engagement through augmented reality mobile applications

Scholz & Smith. (2016)Augmented Reality: Designing Immersive Experiences That Maximize Consumer Engagement

Smith & Colgate (2007), Customer Value Creation: a practical framework

Vishal Jain, (2014) 3D Model of Attitude Available at: https://www.researchgate.net/publication/ 265567380_3D_Model_of_Attitude [accessed May 20 2020]

OTHER SOURCES

Dickson. (2020) Life after COVID-19: how social distancing is disrupting retail. Accessed :16 may, 2020. Recovered at: https://360.here.com/covid-19-impact-retail

Gaioshko, Daira. Accessed: 10 April 2020. Recovered a t : ( h t t p s : / / w w w . r e t a i l d i v e . c o m / e x / mobilecommercedaily/10-ways-how-augmented-reality-can-help-retailers

Meyer Susane, (2020) Evolving Ecommerce: 14 Trends Driving Online Retail In 2020, Accessed : 6 A p r i l , 2 0 2 0 . R e c o v e r e d a t : h t t p s : / / www.bigcommerce.com/blog/ecommerce-trends/ #14-ecommerce-trends-leading-the-way

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Walk-Morris Tatiana. (2020) Accessed: 20, may 2020. Recovered at: https://www.retaildive.com/news/ asos-debuts-ar-tool-for-online-shoppers/577679/

Appendix 1. Interview Guide

Appendix 2. Summary Participants’ answers

QUESTION

THEME

Theory link

When you think of Augmented Reality what comes Pirst to your mind ?

Cognitive component Model of attitude

In which context have you used Augmented reality? Cognitive component Model of attitude

How was your experience ? Affective component,

Customer experience Model of attitude, Customer value framework Would you consider the tool easy or difPicult to use A f f e c t i v e c o m p o n e n t ,

Intention to engage with AR

Model of attitude,

Technology Acceptance Model If you could describe you experience with AR with one

adjective which one would it be? Cognitive component Model of attitude Do you buy online?

Which type of products do you tend to buy online ? After seeing the demonstration video for the Ikea AR app and symsam AR app. would you value having an augmented reality product overview of the products you tent to buy?

Costumer value Customer value framework

Do you think having an AR product overview can help speed up the purchasing process?

Instrumental Value Customer value framework In which way do you think AR could affect the purchase

decision? E x p e r i m e n t a l v a l u e , affective component , consumer experience

Model of attitude, Customer value framework ,

Would you buy a product basing your decision on an AR

product averview? Behavorial component, Intention to engage with the thecnology

Model of attitude, Technology acceptance Model

If you would use AR to make a purchase How do you think your costumer journey would be like from the start to the end of the process?

Costumer Journeys Customer value framework

For which type of business do you think AR technology

with be the most useful? Feedback and development Customer value framework

Do you think there is future for augmented reality? Feedback and development From your perspective, what needs to change or improve

for the technology to add more value to the users?

Feedback and development Customer value framework, Technology acceptance Model

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Questions Subject 1 Subject 2 Subject 3 Subject 4 Subject 5

Previous experiences with

the technology? What? Entertainment Entertainment Entertainment, Google glasses Entertainment, Google translate ar option

Entertainment

Does the participants can give a good definition of the technology

Yes Yes Yes Yes Yes

Which adjective better describe the technology for them?

useful, Possibilities,

helpful Intersting Interesting Innovative

buy online? No, because he doesn’t have a clear view of how the products would look like

Yes, only consumables and with other things have not been satisfied with the purchases, so he feels discourage to buy online.

Yes, books, shoes, clothes, electronics

Yes, groceries, pharmaceuticals, clothes, technology

No, beach he is concern about the quality of the products

How often ? Never Very seldom At least once/month 2-5 t/month Never Would try an AR too to

buy products online if the website oﬀers the service?

Yes Yes Yes Yes Yes

Value having an AR Product overview?

Yes Yes, he thinks it would help to decrease the return rates, because the consumer would be more certain of what is getting

Yes for some products, and if it a good service

Yes yes, cause it would help them to Get clear view of the quality and dimensions of the product why? It would facilitate the

decision process. Helping to meassure

To have an overview of the products that can give you a more comprehensive idea of the product besides the picture. Also help to sorting out or discard things you dont like or want and finding those products you would like to try on real life

Good way to try out the product from home, and have and idea,

Speed up the searching process by Narrowing down the search and then go to the store and get a real feeling

It would give you a better idea/feeling how product look like. It could be really good to narrow down the search online and then look at the products in real life

To understand the dimension and to try matching the product with other items, or to see how a furniture piece would look in the house for example. So when you buy the product you already have an idea how to combine the products with other items or where a to place a product (in the house)

Customer journey? Circular -online, ar review -in store purchase

-Circular start at home discard products, find the products he like the most go to the store and see those product and make the transaction

-start at home

-try out products on me, or placing them at home If buying multiple items. But if its only one item would probably start oﬀ line and then try at home for big products like furniture

Circular (on expensive or big products) Start online, see if it fits( review colors and dimensions)

Store first pick few things he likes the most the go back home try the ar tool and make the purchase

Would you buy a product online by using AR? Conditions?

He would use the tool but Won’t take the decision only based on the tool overview not matter what product, only a very cheap and standard product like a bookshelf,

Won’t take the decision only based on the tool overview not matter what product. He will only take the decision if he already saw the product oﬄine, and would use the technology is the store is for example far away from home

yes, but would have to see the real product as well. But could buy clothes if I already now the brand

Yes but depending on factors like Size, price. No big products that are diﬃcult to return or expensive product ( would need a real view of the product) -also depending on how easy is to return the product

Not usually, but he could try if he already know the bran and the fit of its products, so he is buying variations of the products. Like Zara and hm he know how their sizes are so he would be more willing to try an ar tool for this stores

Speed up the process? Yes, it would save time. Maybe It will probably take longer timer since he would have to go back and forward review products online and oﬀ line. But he thinks he would value the possibility specially for certain articles

Perhaps it won’t be quicker but maybe you will end up more satified with what you bought

Maybe not speed up, but give more certainty

Would it aﬀect the

decision process? Positive-by convincing you that you are choosing the right product

Probably, by given more

info about the product Positive-clarify things, since, specially for people that has feel uncertain about how product look and if it the right desicion. Is a good tool to persuade . how every it probably means that I would spend a lot of time on the app try thing back and forward

Positive

It would make it more certain that is the right thing, it would probably be good to avoid a return

yes, by helping you get a better idea of what you are getting . Sometime you buy for example furniture and when you go back home the item is to big or doesn’t fit

Which product would you

buy using ar Furniture, home decoration, wall paint, tools House renovation materials and accessories

Home renovation, paint ,floors, Woden accessories

Clothes, furniture Collectibles, accesories, maybe clothes if he know the brand and its fits

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Which product you won’t buy using AR

Clothes, luxury products (watches, sunglasses) it does not give any value for him. He won’t even put the time to try on this tipes of products

clothes, accessories, sunglasses

Clothes, except if he knows the brand and the fit

Expensive products, Clothes from brands he doesn’t know, big items,

Which industries could get the most benefits form AR?

Architecture, retail, construction,

Home renovation, paint ,floors, Accessories, nice business and would be also a really good wait to diﬀerentiate from the competition

Industries were design is important Clothing, furniture, restaurants yelp

Home deco, furniture, clothes, kitchens, education, architecture

Future of AR? Its gonna be implemented more and more

For retail to help decrease the return rates

The subject sees a lot of future in the technology and thinks it would provide a lot of value to customer and business, even more than VR which in his eyes the only value provide is entertainment so far.

Become more popular for e commerce, games.

There is definitely a future for retail but maybe in some years when the technology gets improved

What needs to be for the technology to be better?

It needs to improve, more exact, easy to use. give a more realistic and accurate feeling,

Fine tune the technology

for it to be more realistic It has to become easier to use, and for the technology to become popular its needs to be good enough to provide significant value to the user

-improve the technology -raise awareness -more websites including the tool -make it visible so people, know is there and starts to use it start to get use to it

The technology is not good enough, you dont get a realistic feeling of the items, so that need to change in order to for ar to become more popular. Also people should be taught how to use

Subject 1 Subject 2 Subject 3 Subject 4 Subject 5 Questions

Questions Subject 6 Subject 7 Subject 8

Previous experiences with the technology? What?

Entertainment Entertainment Entertainment

Does the participants can give a good definition of the technology

Yes Yes Yes

Which adjective better describe the technology for them?

Innovative, Useful Useful, interactive

buy online? Yes, clothes Yes Yes

How often ? 1-2 t/month Once a month Often

Would try an AR too to buy products online if the website oﬀers the service?

Yes Yes Yes

Value having an AR Product

overview? Yes Yes Yes

Why? To try products before

buying them and based on that take the decision, and first impression of the product

Because it can give you a better idea than a picture on how a product looks, to understand better the texture and the material

To have additional info about a product besides the picture. In could help me to understand better the products features