MKTG 556 | Session 9 | Augmented Reality in Retail and Its Impact on Sales - 2022

Yong-Chin Tan, Sandeep R. Chandukala, and Srinivas K. Reddy

Introduction:

The rise of augmented reality (AR) technology offers marketers exciting opportunities to engage customers and enhance their brand experience. Although companies are eager to invest in AR, research showing its real-world impact is limited. In this article, the authors identify four main ways the technology is used in retail settings. They focus specifically on AR's role in helping customers evaluate products before buying and analyze its effect on online retail sales. Using data from an international cosmetics retailer, they find that AR use on the retailer's mobile app correlates with higher sales for less popular brands, niche products, and more expensive items. Additionally, the impact of AR is stronger among customers new to the online channel or product category, indicating that sales growth results from increased online channel adoption and category expansion. These findings support the idea that AR is most effective when product-related uncertainty is high, showing the technology's potential to boost sales by reducing uncertainty and building purchase confidence. To promote more meaningful research, the authors outline a research agenda for AR in marketing.