Reality re-imagined: How augmented reality redefines decision processes and consumer behaviour in retailing

Abstract

Managers and retailers increasingly recognize that in today’s world consumers make decisions about products that are physically absent or services that are digitized and intangible. The absence of products at the point of decision-making results in ‘imaginary’ quasi-sensory and quasi-perceptive experiences for consumers. Mental imagery is a multi-sensory process that requires representation of information in working memory. Consumers who are not able to generate mental images might experience negative retail or service encounters. Emerging research on Augmented Reality (AR) highlights the potential of the technology for retailing frontlines. Yet, little is known about whether AR aid consumers to offload their mental imagery processes onto the technology, and whether AR can add tangibility to digitized service encounters. In the first manuscript, “Let me imagine that for you”, my co-authors and I conceptualize how AR emulates consumers’ mental imagery processes. As a result, the AR-enabled retail frontline increases positive word-of-mouth towards the retailer as well as choice of higher value products. In a series of studies, we uncover the underlying mediating mechanism of processing fluency and a subsequent increase in decision comfort, and investigate boundary conditions. In the second manuscript, ‘Touching the untouchable”, drawing from theorizing on active inference, we provide a framework to assess how sensory control and feedback modalities of multi-sensory Augmented Reality (m-AR) impact value judgements by reducing mental intangibility. Across four studies we elucidate how touch control of holograms positively impacts consumers’ willingness-to-pay. We further investigate the underlying mediating mechanism of reduced mental intangibility that leads to increased decision comfort, as well as examining assessment as a boundary condition. In the third manuscript, “AR-enabled service automation”, we provide a conceptual framework that highlights the potential of AR in digitized service automation processes. We define AR-enabled service automation and decompose the multi-staged Technology-Enabled Engagement Process (TEEP) as a basis for an AR engagement platform to support service automation. The process is started through interactive features that, if perceived as spatially present, result in first emotional and cognitive engagement, and subsequentially in value-in-use and behavioural engagement towards the service provider.