Exploring the Role of Flow in Augmented Reality for Mobile Retailing: Implications for Practice and Research

Introduction

Digital transformation brings opportunities to develop new business models, by reshaping the way organisations deliver customer value. The ability to integrate different channels is a core strategy that allows consumers to make decisions across several platforms, switching between physical and digital touchpoints (Berman, 2012). Digital transformation also brings new challenges for organisations, such as the alignment of business goals with new strategies (Matt et al., 2015), quick learning capabilities (Mattila, Yrjölä and Hautamäki, 2021), consumer privacy concerns (de Ruyter et al., 2020) and employee adoption (Alavi and Habel, 2021). Thus, it is imperative to learn how the adoption of new technologies can change established business practices and models.

Under the wave of digital transformation, the retailing industry is seeing an impact on its brick-and-mortar physical stores. The traditional stores are being transformed to adapt to digital changes and organisations are modifying the way they interact with customers during the shopping process (Yadav and Pavlou, 2014). The high connectivity and interactivity levels of new technologies can enhance customer’s shopping experience (Javornik, 2016). For instance, Lee and Xu (2020) acknowledged that Augmented Reality (AR) has a great potential, minimising the gap between physical and online stores (Beck and Crié, 2016), and enhancing both hedonic and utilitarian consumer values during the shopping experience (Lee and Xu, 2020).

Since AR is becoming each time more mainstream and utilised by different businesses (particularly in retail), there is a need to understand which practices need to be changed or adapted in order to provide consumer and business value. AR has been predicted to provide a vast increment in productivity and efficiency for retailing. For instance, 54% of retailers have planned to implement this technology into their business (Microsoft, 2019). AR combines both real and virtual environments, allowing the user to interact with 3D objects in real-time (Azuma, 1997). AR has the potential to adapt to new consumer needs (Caboni and Hagberg, 2019; Lee and Xu, 2020) since it combines virtual objects with consumer’s physical environment through the use of mobile technology. This AR shopping experience provides a more intuitive way for the customer to obtain product information such as product size, colour and fitness and encourages consumers to try the product on by interacting with a product virtually (Cook et al., 2020).

AR applications for retailing could be divided into three types: (i) online web-based applications, (ii) in-store applications and (iii) mobile applications (Caboni and Hagberg, 2019). Mobile AR applications have great potential to increase profits and market share (Lee and Leonas, 2018; Scholz and Duffy, 2018; Caboni and Hagberg, 2019) since it evokes ubiquitous shopping behaviour. One example is the mobile application “IKEA Place'' from the Swedish furniture company IKEA. This application allows users to evaluate where they prefer to place the company’s products using their mobile phone and camera (Rese et al., 2014; Lee and Leonas, 2018). Other examples are the accessory brand Ray-Ban and the makeup brand Sephora (Caboni and Hagberg, 2019). Since consumers are shopping more online, interactive mobile AR applications are considered to be a new method for optimising the customer journey (Lee and Leonas, 2018; Scholz and Duffy, 2018; Caboni and Hagberg, 2019).

Although AR shopping has captured the attention of retail researchers and practitioners, there are still two major challenges remaining: (i) technical problems regarding accuracy and calibration (Pachoulakis and Kapetanakis, 2012; Javornik, 2016) and (ii) lack of optimal user experience (Beck and Crié, 2016; Yaoyuneyong et al., 2016; Hilken et al., 2017; Poushneh and Vasquez-parraga, 2017a; Caboni and Hagberg, 2019; Javornik et al., 2019). While research indicates that AR would positively impact customer experience (Wedel et al., 2020;Romano et al., 2020) there is still an opportunity to study AR and its design elements (Chen, 2020). Since flow mediates consumer perception of AR and purchase intentions (Javornik, 2016), there is a need to understand which design elements influence consumers’ flow state in AR.