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The Effect of Augmented Reality Shopping Applications on Purchase Intention

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DOI: 10.15408/ess.v9i2.9724

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 Esensi: Jurnal Bisnis dan Manajemen P-ISSN: 2087-2038; E-ISSN:2461-1182
Volume 9 (2), 2019 Halaman 133 - 142

The Effect of Augmented Reality Shopping Applications on

Purchase Intention

Leonnard1*, Annisa S Paramita2, Jasmine J Maulidiani3

1, 2, 3
Sekolah Tinggi Manajemen IPMI
1
[email protected], [email protected], [email protected]
*
Corresponding author

Abstract
Augmented reality is a new technological breakthrough that helps e-commerce delivers an online
shopping experience with quality of offline shopping. This is possible due to the capability of augmented
reality technology that allows consumers to interact and to try products through the virtual world. This
technology has not been widely adopted by e-commerce in Indonesia. In this study, we analyzed the
effect of this technology on purchase intention through e-consumer experience in the form of perceived
enjoyment and usefulness to 89 consumers. Our findings revealed that virtual presence significantly
affects the enjoyment and usefulness directly and indirectly to purchase intention. In addition, the
device also significantly affects the enjoyment and usefulness directly. Finally, the usefulness is proven
to significantly affect purchase intention.
Keywords: augmented reality; e-commerce; purchase intention; PLS-SEM

Abstrak
Augmented reality adalah terobosan teknologi baru yang membantu e-commerce memberikan
pengalaman belanja online dengan kualitas belanja offline. Hal ini dimungkinkan karena kemampuan
teknologi augmented reality yang memungkinkan konsumen berinteraksi dan mencoba produk melalui
dunia virtual. Teknologi ini belum banyak diadopsi oleh e-commerce di Indonesia. Dalam penelitian ini,
kami menganalisis pengaruh teknologi ini terhadap minat pembelian melalui pengalaman konsumen
elektronik dalam bentuk kesenangan yang dirasakan dan manfaatnya bagi 89 konsumen. Temuan
kami mengungkapkan bahwa kehadiran virtual secara signifikan mempengaruhi aspek kesenangan dan
kegunaan secara langsung maupun tidak langsung terhadap minat pembelian. Selain itu, perangkat ini
juga secara signifikan mempengaruhi aspek kesenangan dan kegunaannya secara langsung. Terakhir,
aspek manfaat terbukti secara signifikan mempengaruhi minat pembelian.
Kata kunci: augmented reality; e-commerce; minat pembelian; PLS-SEM

First draft: June 15, 2019; Revision: August 10, 2019; Accepted: September 5, 2019
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INTRODUCTION
The emergence of e-commerce has changed the way producers sell their products
by making use of technology, selling at competitive prices, and reaching wider consumer
segmentation through communication and transactions via the internet (Desti & Shanthi, 2015).
These advantages have granted e-commerce a very significant and emerging development of
e-commerce websites offering a wide range of products. However, these developments have
not been able to completely cover for the on-site shopping experiences (Lu & Smith, 2008).
On-site shopping gives an edge where consumers actually can interact with the product
directly. They are able to see, to touch, and to try the product directly. Even consumers
can also interact with the seller or the shop assistant to inquire any information about the
product. These experiences are not fully acquired by consumers when they shop through
e-commerce. As a result, it is often found that consumers are disappointed when they reach
the product in their hands.
Therefore augmented reality is one of the new breakthroughs that offer solutions to
the above problems through technology that can bring virtual world into the real world.
Through this technology, consumers are able to do online shopping with on-site shopping
experience. Since, application of augmented reality in e-commerce is still relatively new, studies
that analyze the augmented reality in relation to the factors that encourage consumers to
use the technology and its impact on purchase intention is still limited. Prior studies have
analyzed the impact of AR on e-commerce, including technology effectiveness, consumer
experience and satisfaction (Desti & Shanthi, 2015; Rese et al., 2017; Yim et al., 2017;
Zhu et al., 2004). However, the analysis of the effect on purchase intention is still modest.
Purchase intention is the next stage of consumer satisfaction. This variable measures the
desire of consumers to make purchases in the future. The variable is a measure of actual
buying behavior (Morrison, 1979). Therefore, in this study, we focus on the impact on
purchase intention of products.
Augmented reality is an integration between the real world and the virtual world. This
technology has greatly helped consumers to see the real world of virtual worlds that are
incorporated into the real world. This technology provides a breakthrough way to interact
with virtual objects that cannot be accessed directly by consumers (Azuma, 1997). This
technology has proven to provide many advantages in e-commerce, including increasing
sales, developing brand, and shaping consumer perceptions (Desti & Shanthi, 2015). In
online shopping experience, this technology enables consumer to try on products through
virtual worlds (Ma & Choi, 2007).
A consumer experience of augmented reality in e-commerce is very important in
influencing their evaluations and purchasing decisions. Interactivity and vividness are two
augmented reality qualities that influence consumer evaluation (Ariely, 2000; Yim et al.,
2017). Furthermore, the term virtual presence as an indicator to evaluate the level of
reality of the virtual world offered by augmented reality (Slater & Steed, 2000). Virtual
presence is proven to improve the quality of consumer experience (Tussyadiah et al.,
2018). In addition to the virtual presence, another important factor in improving the
quality of consumer experiences is the device used to increase consumer experiences
of augmented reality (Nincarean et al., 2013; Rapaccini et al., 2014). A high quality

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Leonnard The Effect of Augmented Reality Shopping Applications on Purchase Intention

experiences will lead to high perceived technology usefulness and enjoyment (Van Noort
et al., 2012).
Usefulness is an indicator to measure how effective and efficient technology is used
to help consumers find and obtain the information they need, evaluate products and
make purchases (Kim & Forsythe, 2008). Usefulness is also an important indicator that
explains the Electronic Technology Acceptance Model (TAM) (Davis, 1989). In addition
to the usefulness, another indicator that explains TAM is enjoyment (Davis et al., 1992).
Enjoyment measure aspects of pleasure and enjoyment of technology use (Childers et
al., 2001). Both of these variables proved significant consumer shopping behavior and
purchase intentions (He et al, 2018; Heijden, 2000; Huang & Hsu Liu, 2014; Poushneh
& Vasquez-Parraga, 2017).

METHODS
Randomly collected data were conducted with 89 consumers of e-commerce, aged
between 15 and 35 years old and worked as high school and university students (73
people), employees (11 people), entrepreneurs (3 people), housewives (1 person) and others
(1 person) at South Jakarta, Indonesia. Surveys were distributed through online google
forms. To analyze the impact of augmented reality on e-commerce purchase intention, the
indicators used are virtual presence, device, perceived usefulness, perceived enjoyment, and
purchase intention. The quality of augmented reality is measured through virtual presence
and device (Ariely, 2000; Slater & Steed, 2000; Yim et al., 2017) as well as the virtual
presence (Yim et al., 2017) and the device (Nincarean et al., 2013; Rapaccini et al., 2014).
The consumer experience is measured through perceived usefulness (Yim et al., 2017) and
perceived enjoyment indicators (Chang, Sun, Pan, & Wang, 2015; Mathwick et al., 2001).
Finally, purchase intention is employed as an endogenous latent variable (He et al., 2018).
All of the measurements are obtained on a five-point Likert scale. The indicators used can
be observed in Table 1.
The Partial Least Square path modeling (PLS-PM) was performed to test the research
hypotheses by using the SmartPLS 3.0 software. The small sample size will result in a biased
estimation of the covariance-based path modeling so that maximum likelihood functionality
was not possible. Therefore, the use of PLS-PM is considered very appropriate for small
sample quantities (<100) (Hoyle, 1999). The stages of analysis using this method consist
of outer model analysis, inner model analysis, and hypothesis testing.
Outer model analysis is used to evaluate whether the measurement scales used are
valid and reliable. It consists of convergent validity test, discriminant validity test, and
undimensionality test. The inner model analysis is used to evaluate whether the structural
model formed is robust. The analysis consists of evaluating the coefficient of determination
(R2), predictive relevance (q2), and Goodness of Fit (GoF). Finally, hypothesis testing is
performed by evaluating the value of t-statistics and coefficients with a hypothesis based
on the theory and previous studies.

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Table 1. Variables and indicators used in the study

Constructs Dimensions Descriptions

Virtual presence X1 Augmented reality helps me visualize virtual objects become visible

X2 Augmented reality provides information about virtual objects

Device X3 I use augmented reality through smartphone or tablet

X4 Augmented reality requires no device other than my smartphone or

laptop

X5 Applications with augmented reality can be used through a variety of

gadgets everywhere

X6 Augmented reality can be accessed easily

X7 The use of augmented reality in the application is easy to understand

X8 Augmented reality is a medium that excels in the delivery of messages

with text, sound, images, video, and animation

Enjoyment X9 Applications that use augmented reality have many features and are
more interesting

X10 Augmented reality makes the app more interactive

X11 Online shopping apps that use augmented reality features is more
impressive and special

Usefulness X12 I feel augmented reality in online shopping provides more information

X13 Online shopping using augmented reality provides a variety of product

options

X14 Online shopping using augmented reality gives you more options to
view or try products in the real world

X15 Shopping online using augmented reality gives more choice of

interesting features

X16 Online shopping with augmented reality simplifies access to reviews

and ratings from other customers

Purchase intention X17 I will re-purchase in the e-commerce websites that uses augmented
reality

X18 I chose to look for information on the e-commerce websites that use
augmented reality before buying a product

X19 I prefer online shopping websites that use augmented reality

RESULTS AND DISCUSSION

The results in Table 2 indicate that the research model has good convergent and
discriminant validity. All loading factor values are greater than 0.50. The Cronbach’s alpha,
Rho A, and composite reliability are also greater than 0.70. Moreover, the Average Variance
Extracted (AVE) values of all constructs are greater than 0.50.

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Leonnard The Effect of Augmented Reality Shopping Applications on Purchase Intention

Table 2. Result of measurement model

Std. Average Variance Composite Cronbach’s

Constructs Dimensions Rho A
Loadings Extracted (AVE) reliability Alpha

Virtual presence X1 0.923 0.847 0.917 0.820 0.820

X2 0.918

Device X3 0.553 0.510 0.859 0.807 0.843

X4 0.543

X5 0.806

X6 0.748

X7 0.823

X8 0.758

Enjoyment X9 0.748 0.684 0.866 0.767 0.779

X10 0.846

X11 0.882

Usefulness X12 0.814 0.714 0.926 0.900 0.902

X13 0.846

X14 0.852

X15 0.884

X16 0.829

Purchase X17 0.856 0.733 0.892 0.818 0.822

intention
X18 0.861

X19 0.850

Furthermore Table 3 indicates that the model has good discriminant validity. The
evaluation of Fornell-Lacker criterion revealed that the correlation between each construct
with its own construct is higher than other constructs (Golob, 2001).

Table 3. Fornell-Lacker criterion results

Purchase Virtual
Device Enjoyment Usefulness
intention presence

Device 0.714

Enjoyment 0.806 0.827

Purchase intention 0.769 0.683 0.856

Usefulness 0.766 0.755 0.839 0.845

Virtual presence 0.758 0.852 0.661 0.747 0.920

The result of evaluation of the structural model in the table 4 indicates that virtual
presence has a direct positive effect on the enjoyment and usefulness (coeff. = 0.565 and
coeff = 0391 respectively), and indirectly to purchase intention (coeff. = 0.359) supporting
hypothesis 1a and 1b. The device has a significant direct positive effect on the enjoyment

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and usefulness (coeff. = 0.378 and coeff. = 0.469 respectively), but does not significantly
affect purchase intention indirectly (coeff. = 0.397) supporting hypotheses 2a and 2b. Finally,
usefulness has been indicated to have a positive effect on purchase intention (coeff. = 0.752)
in favor of hypothesis 3.

Table 4. Direct, indirect, and total effects of PLS-SEM

Direct effect Indirect effect Total effect

Virtual presence -> Enjoyment 0.565 - 0.565***

Virtual presence -> Usefulness 0.391 - 0.391**

Virtual presence -> Purchase intention - 0.359 0.359**

Device -> Enjoyment 0.378 - 0.378***

Device -> Usefulness 0.469 - 0.469***

Device -> Purchase intention - 0.397 0.397***

Enjoyment -> Purchase intention 0.115 - 0.115 n.s

Usefulness -> Purchase intention 0.752 - 0.752***

Note: n.s=non-significant at alpha 0.05

This study examined the effect of augmented reality on consumer purchases in

e-commerce. The result of data processing indicates that virtual presence affects perceived
enjoyment and usefulness. We assumed that the augmented reality used by e-commerce
on this research site already has a good virtual quality (Slater & Steed, 2000). The high
quality devices are able to produce perceived enjoyment. This is in accordance with the
prior study, which states that the enjoyment level perceived by consumers is higher in the
virtual stores than in physical stores (Lee & Chung, 2008). Likewise with the effect on
usefulness to the consumer (van Noort et al., 2012). In addition, the result also gives us
information that augmented reality has been accepted as a new technology by consumers.
It supports Electronic Technology Acceptance Model (TAM) (Davis, 1989). The relationship
between constructs in the model is indicated in the Figure 1.
The variable also has an indirect effect on purchase intention through perceived
enjoyment and usefulness. The desire of consumers to pay for products is no longer
because of the quality and characteristics of these products, but because of their experience
using virtual reality applications (Li & Meshkova, 2013). It applies especially to female
consumers. However, in this study, enjoyment is not being able to generate purchases.
It can be caused by the virtuality level, whether it allows consumers to simulate the
product in whole or only in part. In addition, it also depends on the type of consumers,
whether they have hedonic or utilitarian values (Kim & Forsythe, 2007; Merle, Senecal,
& St-Onge, 2012).

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Leonnard The Effect of Augmented Reality Shopping Applications on Purchase Intention

Figure 1. Structural result model of PLS-SEM

Note: n.s= non-significant at alpha 0.05

Consumer decisions with hedonic values ​​will be more influenced by their experience
of fun and playfulness when using virtual technologies. However, it is not the case with
consumers with utilitarian values. Their decisions are based on rational consumption
behavior. Consumers who have utilitarian values ​​differ from those with hedonic values where
​​
the biggest motivation of consumers using augmented reality on e-commerce websites is
to improve the quality of information they need in evaluating products. Also, the level of
consumer confidence in virtual stores is still lower than websites (Kim & Forsythe, 2007). In
addition, other factors such as cognitive involvement and self-congruity effects also influence
consumer decisions to make a purchase.
The device also proved to significantly affect perceived enjoyment and usefulness. The
device measures how easily the levels of augmented reality use in e-commerce, the types of
media that can be used to access augmented reality, as well as the quality of text, sound,
images, video, and animation. It is consistent with prior studies which state that ease of
access to augmented reality through various media will enhance consumer enjoyment and
knowledge of products through positive experience when using augmented reality (M. Yim,
Cicchirillo, & Drumwright, 2012; M. Y. C. Yim et al., 2017). In this study, however, we did
not specifically examine what factors of the media used that affected consumer enjoyment
and usefulness. Usefulness has been indicated to affect purchase intention. The higher the
consumer’s perception of the usefulness of augmented reality in helping them get more
quality information than traditional web based, the greater their chances of purchasing
the product (He et al., 2018; Heijden, 2000; Huang & Hsu Liu, 2014; Poushneh & Vasquez-
Parraga, 2017; M. Y. C. Yim et al., 2017). Conversely, enjoyment does not significantly affect
purchase intention.
Augmented reality has given a new breakthrough in helping e-commerce solve the
problem of how to bring the products online to buyers in real. Although e-commerce has
provided consumers with the convenience to shop online, their biggest problem is to bring
the product in real-time as if consumers were buying in stores directly. This will minimize
dissatisfaction, return of products, and low ratings and reviews on e-commerce. Augmented
reality has been proven to improve connectivity between products and consumers that
support previous studies. As discussed above that the technology significantly affects consumer

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perceptions of product enjoyment and usefulness. However, the influence of this technology
on consumer buying behavior is still being debated.

CONCLUSION
This study confirms previous studies that analyzed the effect of augmented reality on
purchase intention. The results of data analysis indicate that virtual presence significantly
affects the enjoyment and usefulness directly and indirectly to purchase intention. Devices
significantly affect the enjoyment and usefulness directly and usefulness proved to significantly
affects purchase intention. Conversely, enjoyment does not significantly affect purchase intention.
It can be affected by many factors, including types of consumers, cognitive involvement and
self-congruence. In addition, the characteristics of consumers are also important to consider.
Most of the respondents of this study are high school and university students, therefore, the
interpretation of the results should be performed carefully. It is because students are more
receptive and adaptable to new technologies, but it is not applied to adults and parents.
In addition, in making a purchase decision, they may depend on their parents’ decision. In
addition, the results are still prevalent in all types of products that have adapted augmented
reality technology to their websites. Each product may have different characteristics and the
test results for each variable in this research model will possibly distinct.

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