THE INFLUENCES OF VIRTUAL REALITY

(VR) AND AUGMENTED REALITY (AR) IN

CUSTOMERS BEHAVIOR:
DO TECHNOLOGICAL ADVANCES ENHANCE CUSTOMER EXPERIENCES
AND SHAPE PURCHASING DECISIONS IN RETAIL INDUSTRY?

Phan Nguyen Thao Nguyen

Student ID code: 2205000215, F-UON-M7C, Foreign Trade University

Abstract:
Purpose: This study aims to assess the impact of Virtual Reality (VR) and
Augmented Reality (AR) technologies on customer behavior in the retail
industry. Specifically, it seeks to evaluate how Virtual Reality (VR) and
Augmented Reality (AR) enhance shopping experiences, influence purchase
decisions, and shape interaction behavior both in physical stores and online.
Additionally, the research aims to identify key factors driving the acceptance
and usage of Virtual Reality (VR) and Augmented Reality (AR) technologies
among customers in retail settings, and propose effective marketing strategies
and tools based on these technologies to optimize business performance.

Design/methodology/approach: The research employed a mixed-methods

approach, combining qualitative and quantitative methodologies to
comprehensively examine the phenomenon under investigation. A model
incorporating surveying, in-depth interviews, and data analysis was utilized to
collect and analyze data. The sample selection method was guided by rigorous
sampling techniques to ensure representation and validity. Quantitative data
were analyzed using statistical techniques, while qualitative data were subjected
to thematic analysis to extract meaningful insights. Ethical considerations
governed all aspects of the research process, guiding participant recruitment,
data collection procedures, and analysis practices. The findings and
interpretations presented in this study were grounded in ethical principles,
ensuring the integrity and confidentiality of participants' information and
adhering to professional standards of research conduct.

Research limitations/implications: The research constrained by several

limitations that warrant acknowledgment. Primarily, the size of the sample
utilized in the research may restrict the generalizability of the findings to
broader populations. Additionally, the geographical scope of implementation
may introduce biases inherent to specific regions or cultural contexts, thereby
limiting the applicability of the results on a global scale. Furthermore, the
dynamic nature of AR and VR technologies presents challenges in precisely
delineating the myriad forms and manifestations in which these technologies
may manifest in different settings. These limitations underscore the need for
cautious interpretation of the study's conclusions and highlight avenues for
future research to explore the nuances and complexities inherent to the adoption
and impact of AR and VR technologies in diverse contexts.

Originality/value: This study contributes to the existing literature by providing a

comprehensive overview of the influences of VR and AR on customer behavior
in the retail industry. It highlights the potential of these technologies to enhance
customer experiences, shape purchasing decisions, and drive business growth.
The study also identifies key research gaps and opportunities for further
exploration, paving the way for future research and development in this rapidly
evolving field.

I. INTRODUCTION:

With the advancement of technology, the retail industry has witnessed a

remarkable evolution, transforming the way consumers interact with products
and brands. Among the innovative technologies driving this transformation are
Virtual Reality (VR) and Augmented Reality (AR). These immersive
technologies have permeated various facets of retail, offering new avenues for
customer engagement and interaction. In response to shifting consumer
preferences and increasing digitalization, retailers are embracing Virtual Reality
(VR) and Augmented Reality (AR) to enhance the shopping experience both in-
store and online. This study delves into the profound impacts of Virtual Reality
(VR) and Augmented Reality (AR) on customer behavior within the retail
sector, exploring how these technologies influence purchasing decisions and
shape the future of retail experiences. In the course of our research, we will
delve into two pivotal inquiries that underpin the essence of this study. The first
inquiry centers on the accessibility and satisfaction levels of customers with
regard to AR and VR technologies. We seek to ascertain whether these
technologies have achieved widespread availability and whether they effectively
meet the expectations and needs of customers. The second inquiry delves into
the potential impact of AR and VR on customers' purchasing decisions. We aim
to explore whether these technologies exert a positive influence and contribute
to the enhancement of customers' decision-making processes when it comes to
making purchasing choices. Through a thorough investigation into these
questions, we endeavor to shed light on the role and significance of AR and VR
technologies in shaping the retail landscape.

II. LITERATURE REVIEW:

In the contemporary retail landscape, marked by rapid technological

advancements, Virtual Reality (VR) and Augmented Reality (AR) have
emerged as transformative tools reshaping the interaction between retailers and
consumers. This literature review delves into the profound impact of VR and
AR on customer behavior within the retail sector, scrutinizing their efficacy
across both physical and digital retail domains.

Virtual Reality (VR) and Augmented Reality (AR) in Retail

Originally developed for cinematic purposes, Augmented Reality (AR) and

Virtual Reality (VR) experienced a surge in popularity during the 1990s with
the emergence of mobile AR and wearable computers. This led to a heightened
focus on these technologies within the realm of computer science. Alongside
VR, AR found practical applications in a diverse array of fields, including retail,
gaming, medicine, navigation, and education. Although early applications of
VR can be traced back to the aviation industry in the 1970s, widespread
adoption only occurred more recently, thanks to advancements in virtual
technology. The exponential increase in computing power, particularly in terms
of generating computer-generated imagery and enabling real-time interaction,
has been instrumental in driving the proliferation of VR systems. Both AR and
VR have attracted significant attention due to their potential to disrupt various
industries. This figure provides a comparative timeline of AR and VR research
progress in a specific retail setting, highlighting the multidisciplinary origins of
the research.(Bonetti et al., 2017)
The deployment of Virtual Reality (VR) and Augmented Reality (AR) in retail
environments has garnered considerable attention for its potential to redefine the
shopping experience. Fiore and Kim's seminal study (2007) conducted a
comprehensive examination of VR's influence on retail store performance.
Through immersive virtual tours and interactive product demonstrations, Fiore
and Kim illustrated the significant enhancement in customer engagement and
dwell time within retail spaces facilitated by VR technology. Similarly, Peter
and Bodkin' research (2021) provided valuable insights into the benefits of VR
integration in retail settings. By analyzing consumer responses and sales
metrics, they elucidated the positive correlation between VR-enhanced
experiences and heightened customer satisfaction, thereby reinforcing the
strategic importance of VR in retail operations.

Virtual Reality (VR) and Augmented Reality (AR) in Physical Stores

The convergence of Virtual Reality (VR) and Augmented Reality (AR)

technologies within physical retail environments offers a myriad of
opportunities to augment the shopping journey. Building upon previous
findings, Peter and Bodkin' research (2021) expanded their inquiry into the
integration ofVirtual Reality (VR) and Augmented Reality (AR) in physical
stores. Through meticulous observation and analysis, they underscored the
transformative potential of Virtual Reality (VR) and Augmented Reality (AR)in
creating immersive, omnichannel retail experiences. By providing consumers
with interactive product demonstrations and immersive virtual tours, retailers
can stimulate foot traffic and cultivate deeper consumer engagement, ultimately
translating into enhanced sales performance and brand loyalty.

Virtual Reality (VR) and Augmented Reality (AR) in Online Stores

In the realm of e-commerce, Virtual Reality (VR) and Augmented Reality (AR)
technologies serve as pivotal tools in enriching product visualization and
reducing purchase uncertainty. Research by Chen et al (20) delved into the
efficacy of AR in mitigating purchase uncertainty and enhancing product
visualization in online retail contexts. Through a series of controlled
experiments, Lee and Lee elucidated the tangible benefits of AR-powered
product visualizations in bolstering purchase intent and fostering consumer
satisfaction. Additionally, Wuest and Rauschnabel's study (2016) examined the
impact of AR on online shopping behavior. By leveraging AR to bridge the gap
between online and offline shopping experiences, Wuest and Rauschnabel
demonstrated the potential of AR to deliver personalized and interactive
shopping encounters that resonate with contemporary consumers, thereby
driving higher engagement and conversion rates.

Integration of Augmented Reality (AR) and Virtual Reality (VR) in Retail

The seamless integration of AR and VR across physical and digital retail

channels heralds a new era of immersive shopping experiences. Ha and Stoel's
seminal work (2009) underscored the importance of cohesive integration to
deliver consistent brand experiences across touchpoints. Through the strategic
amalgamation of AR and VR, retailers can curate immersive omnichannel
journeys that resonate with consumers' evolving preferences and behaviors,
fostering deeper brand connections and engendering lasting loyalty.

Challenges and Future Directions

Despite the transformative potential of AR and VR in retail, significant
challenges persist in their widespread adoption and implementation. Huang and
Benyoucef (2013) identified technical complexities, exorbitant implementation
costs, and consumer adoption barriers as formidable hurdles. In their
comprehensive survey, Huang and Benyoucef elucidated the primary
impediments to AR and VR deployment, highlighting the imperative for
collaborative efforts among stakeholders to devise scalable solutions that
surmount these challenges and unlock the full potential of immersive
technologies in retail settings. Furthermore, future research endeavors should
prioritize longitudinal studies to ascertain the long-term impact of AR and VR
adoption on consumer behavior and retail performance, thereby informing
strategic decision-making and propelling sustainable growth in the retail sector.

In summation, Virtual Reality (VR) and Augmented Reality (AR) represent

transformative catalysts reshaping the retail landscape, fostering deeper
consumer engagement, and driving heightened brand affinity. However,
realizing the full potential of AR and VR hinges on overcoming pervasive
challenges and embracing collaborative innovation to craft immersive retail
experiences that resonate with today's discerning consumers.

III. Methodology:

1. Research process:
 Defining the problem

Planning a research
design

Designing and doing research

criteria and survey

Gathering the data

Processing and
Analyzing the data

Formulating conclusions
and writing the report
Figure 1. Steps of research process

2. Research Design:
This study will employ a mixed-methods approach, combining
quantitative surveys and qualitative interviews to gather comprehensive
and primary data on the influence of Virtual Reality (VR) and
Augmented Reality (AR) on customer behavior in the retail industry. A
survey and quick interview was initially conducted in a group of
consumers and sellers from age 18-30 years old using the same
questionnaire. I obtained a total of 20 replies, 13 from the survey, 7 from
the interview.
3. Sampling:
A purposive sampling technique will be used to select participants who
have experience with Virtual Reality (VR) and Augmented Reality (AR)
technologies in retail environments. The sample will include both
customers and retail sellers to ensure diverse perspectives are captured.
4. Data Collection:
● Quantitative Data: A structured survey questionnaire will be
administered to customers to collect quantitative data on their
experiences with Virtual Reality (VR) and Augmented Reality
(AR) technologies, shopping behavior, and purchase decisions. The
survey will utilize Likert scale questions to measure the
effectiveness of Virtual Reality (VR) and Augmented Reality (AR)
 in enhancing shopping experiences and influencing purchasing
decisions.
● Qualitative Data: In-depth interviews will be conducted with retail
professionals to gain insights into the implementation of Virtual
Reality (VR) and Augmented Reality (AR) technologies in retail
settings, challenges faced, and strategies for successful integration.
These interviews will provide rich qualitative data to complement
the survey findings.
5. Data Analysis:
● Quantitative Analysis: Descriptive statistics such as mean, standard
deviation, and frequency distributions will be used to analyze the
survey data and prove the hypothesis. Additionally, data from the
survey will be statistically and analyzed in chart form
● Qualitative Analysis: Thematic analysis will be utilized to analyze
the qualitative interview data. This involves identifying recurring
themes and patterns in the responses, allowing for a deeper
understanding of participants' perspectives.
6. Ethical Considerations:
This research will adhere to ethical guidelines, ensuring informed consent
from participants, confidentiality of data, and ethical treatment
throughout the research process.
7. Constraints:
The study could face certain constraints like potential sample bias, biases
arising from self-reporting in survey responses, and the applicability of
findings to wider retail settings. These constraints will be recognized and
mitigated to the fullest extent feasible.

IV. Findings:

In addition to querying respondents about their demographics, shopping

frequency, and experiences with Virtual Reality (VR) and Augmented Reality
(AR), the study will also delve into the specific contexts in which they have
encountered these technologies, such as whether it was during in-store browsing
or online shopping sessions. Furthermore, the survey will seek to understand the
factors that influence their attitudes towards Virtual Reality (VR) and
Augmented Reality (AR), including perceived usefulness, ease of use, and
enjoyment. Additionally, respondents will be asked about their intentions to use
Virtual Reality (VR) and Augmented Reality (AR) in the future, as well as their
preferences for certain features or applications of these technologies in the retail
environment. Finally, the study will explore any potential barriers or concerns
that respondents may have regarding the adoption of Virtual Reality (VR) and
Augmented Reality (AR) in their shopping experiences.

1. Data from the survey

Demographics

To commence, let's delve into the demographic characteristics observed

throughout the survey and in-depth interviews. It became evident from the
comprehensive data collection process that a substantial portion of both survey
participants and interviewees were predominantly young females based in
Hanoi city. Moreover, the study revealed a varied spectrum of financial status
among the respondents, with reported monthly incomes ranging from 2 million
to 15 million VND. This diversity underscores the importance of considering a
wide range of perspectives and backgrounds in analyzing the findings of the
research.

Shopping regularity

Next, an analysis of the frequency of purchases emerges as a pivotal aspect of

the study. This facet offers a scholarly lens through which to scrutinize
consumer behavior and discern notable trends in shopping patterns. By
meticulously examining the frequency with which individuals engage in
purchasing activities, the research endeavors to provide a nuanced
understanding of consumer habits within the target demographic.
 Figure 2. The monthly shopping frequency of consumers.

Figure 2 provides a comprehensive overview of the shopping behaviors

observed among respondents in both online and physical retail environments.
Notably, the data reveals a high frequency of shopping activities within this
demographic. The prevalence of responses categorized as 'occasionally' and
'frequently' is particularly noteworthy, with over 40% and 30% respectively,
showcasing a significant level of engagement with consumerism. This trend
underscores the persistent inclination of respondents to actively seek out new
products and services on a regular basis, indicative of a dynamic and vibrant
consumer landscape within the target demographic.
 Figure 3. Consumer experience with VR.

The figure 3 depicts that a significant portion of survey respondents has not yet
experienced Virtual Reality (VR) technology, or has had limited opportunities
to engage with it. The data reveals that over 60% of participants have not
utilized VR, with only approximately 8% of them utilizing it on a regular or
occasional basis
 Figure 4: Consumer experience with AR.

Regarding Augmented Reality (AR), there is a similar pattern to Virtual Reality

(VR), with over 38% of respondents having not experienced it. However, this
technology appears to be more prevalent compared to VR, with approximately
30% of survey participants using AR regularly in their shopping activities, a
rate more than four times higher than that of VR usage.
Evaluation of Shopping Experience

Figure 5:Evaluation from Consumers about AR and VR Product Understanding

In regards to figure 5, a predominant consensus among surveyed individuals

emerges regarding the considerable utility of Virtual Reality (VR) and
Augmented Reality (AR) technologies in facilitating a deeper comprehension of
showcased products. Notably, the data reveals that the criteria of "Very Useful"
and "Extremely Useful" are the primary categories, commanding substantial
proportions of respondents' endorsements. Specifically, 38.5% of participants
attribute the descriptor "Very Useful," while 30.8% opt for "Extremely Useful,"
underscoring the widespread acknowledgment of the instrumental role played
by Virtual Reality (VR) and Augmented Reality (AR) in enriching consumer
understanding within the retail context.
Figure 6: Consumer Perceptions of the Influence of Virtual Reality (VR) and
Augmented Reality (AR) on Purchase Decisions

Figure 7: Consumer Perspectives on the Impact of AR and VR on their

Shopping Choices
In figure 6 and figure 7, it delineates the impact of Virtual Reality (VR) and
Augmented Reality (AR) presence on consumers' purchasing decisions.
Through the query, "Does Virtual Reality (VR) and Augmented Reality (AR)
influence your shopping decisions?" figure 6 encapsulates participants'
perspectives on the influence of these technologies on their purchasing
determinations. Predominantly, respondents across the survey assert varied
degrees of influence from Virtual Reality (VR) and Augmented Reality (AR)
technologies, ranging from modest to substantial impacts on their decision-
making processes.

In figure 7, participants were asked to express their views on whether these

technologies enhance their shopping decisions. The data illustrates similarly
positive signals compared to figure 6, with the majority of respondents
indicating that these technologies reinforce or augment their desires or
intentions to purchase items. The pronounced clustering towards the right end of
both charts signifies a constructive indication of employing advanced
technologies to elevate the quality of customer experiences within retail
settings.

This collective affirmation underscores an evolving paradigm in retail, where

the strategic deployment of Virtual Reality (VR) and Augmented Reality (AR)
technologies is increasingly acknowledged as instrumental in fostering positive
consumer engagement and bolstering competitive advantage. As consumer
preferences continue to evolve in tandem with technological advancements, the
integration of Virtual Reality (VR) and Augmented Reality (AR) into retail
environments emerges as a crucial avenue for enhancing customer satisfaction
and driving business growth.

2. In-depth Interview

Through a concise interview process targeting individuals aged between 25 and

35, who are currently proprietors of one or more retail enterprises spanning
diverse industries in Hanoi, valuable insights were gleaned. These insights
mirrored, to a large extent, the sentiments expressed by survey participants.
However, it was discernible that respondents, viewed from a business
standpoint, exhibited a heightened level of scrutiny towards the integration of
AR and VR technologies into their operations. Notably, during discussions
pertaining to the augmentation of product understanding facilitated by these
technologies, this demographic cohort conveyed a sense of discontentment,
indicating that the features provided may not fully meet their expectations or
requirements. Despite this, other facets explored during the interviews elicited
positive feedback, indicating a potential receptivity towards innovation within
the retail landscape.

V. Discussion:

Investigating how AR and VR technologies influence consumer purchasing

behavior constitutes the central focus of this study. Several conclusions can be
drawn from the survey data described in the following sections.

At present, the adoption of AR and VR remains far from ubiquitous, as

indicated by the prevailing absence of firsthand experiences reported by
respondents. This phenomenon underscores a significant gap between the
potential of these technologies and their actual implementation in real-world
contexts. The primary deterrent to widespread adoption appears to be the
formidable initial costs associated with installation, deployment, and
infrastructure development. Such financial barriers create a distinct divide,
limiting the accessibility of AR and VR technologies primarily to large
enterprises and retailers with ample resources. Consequently, these technologies
predominantly find their footing in high-traffic venues such as bustling
shopping centers, expansive exhibitions, or upscale retail establishments
catering to affluent clientele. However, this segmentation poses a substantial
challenge within the modern economic landscape, where inclusivity and
democratization of technology are increasingly valued.

Transitioning to the realm of consumer perspectives and purchasing decisions,

studies examining the influence of VR and AR on consumer behavior reveal a
prevailing sense of positivity and optimism among participants. The data
underscores the significant impact of these technologies on purchasing
decisions, with a notable 31% of respondents acknowledging varying degrees of
influence, ranging from Moderately to Extremely significant. Contrary to
expectations, only a mere 8% of participants perceive a minimal impact, while
none claim no impact at all. Moreover, this sentiment is mirrored in assessments
of whether VR and AR technologies lead to increased spending decisions. This
collective affirmation suggests that, despite existing limitations, AR and VR
technologies are readily embraced and utilized by a broad spectrum of
consumer demographics. Indeed, both AR and VR represent promising
technological advancements with immense potential for further evolution and
refinement in the foreseeable future.

As such, it is imperative for developers and retailers alike to remain steadfast in

their commitment to advancing the quality and accessibility of these
technologies. By embracing a proactive stance and integrating AR and VR into
their technological arsenals, retailers can enhance their products, amplify sales,
and optimize business performance to align with their unique objectives and
consumer preferences. In doing so, they not only adapt to the shifting tides of
technological innovation but also pave the way for a more immersive, engaging,
and inclusive retail landscape.

VI. Reference:
Fiore, A. M., & Kim, J. (2007). Enhancing the role of virtual product experience
in consumer learning. Journal of Interactive Marketing, 21(2), 50-68.

Bonetti, F., Warnaby, G. and Quinn, L. (2017) ‘Augmented reality and virtual
reality in physical and online retailing: A review, synthesis and research
agenda’, Augmented Reality and Virtual Reality, pp. 119–132.
doi:10.1007/978-3-319-64027-3_9.

Chen, Y. et al. (2015) ‘The joint moderating role of trust propensity and gender
on consumers’ online shopping behavior’, Computers in Human Behavior, 43,
pp. 272–283. doi:10.1016/j.chb.2014.10.020.

Ha, S. and Stoel, L. (2009) ‘Consumer e-shopping acceptance: Antecedents in a

technology acceptance model’, Journal of Business Research, 62(5), pp. 565–
571. doi:10.1016/j.jbusres.2008.06.016.

Huang, Z. and Benyoucef, M. (2013) ‘From e-commerce to social commerce: A

close look at design features’, Electronic Commerce Research and Applications,
12(4), pp. 246–259. doi:10.1016/j.elerap.2012.12.003.
Peters, C. and Bodkin, C.D. (2021) ‘Retail store community and its impact on
store success’, International Journal of Retail & Distribution Management,
49(6), pp. 735–751. doi:10.1108/ijrdm-05-2020-0165.