This content relates to : DIGITAL TRANSFORMATION
The use of virtual reality technologies like virtual fitting rooms (VFR) leads to a sizeable increase in sales.
VFR also significantly increases post-purchase customer satisfaction and reduces the rate of product returns.
Personalized VFR outperforms non-personalized VFR only when traditional promotional photos are not available. So the optimal strategy for an online retailer to enhance sales is to entirely replace conventional visual displays with personalized VFR, instead of combining them.
With the rapid development of virtual reality technology, virtual fitting rooms (VFR) increasingly attract the attention of marketers (e.g., online apparel retailers) and researchers. The vast majority of prior research has employed lab experimentation and self-reported data to examine how VFR influences user perception or attitude, instead of actual purchases. It remains unclear whether VFR increases sales. The question is of utmost importance to managers because of the considerable cost of implementing and maintaining VFR systems. In this study, we empirically test the causal effects of different VFR designs on consumer purchases and post-purchase behaviors using large-scale field experiments, and unveil the underlying theoretical mechanisms.
Online retailers traditionally use highly appealing promotional photos for an apparel item (typically featuring an attractive model to showcase the ideal look of the item), which can increase sales because consumers like the way it looks on the model. In contrast, VFR enables consumers to virtually try on an item before purchase and better realize how it would look on themselves (which typically does not look as good as on the model), thus diminishing the influence of promotional photos in driving purchases. Hence, many online retailers are concerned about a potential decline in sales if they launch VFR.
Our results based on field experiments conducted with two different online apparel retailers indicate that, in general, the launch of VFR leads to significant increase (instead of decline) in consumer purchases. Moreover, VFR using personalized avatars has a stronger positive effect than that using non- personalized avatars. However, in the presence of traditional promotional photos, personalized VFR no longer outperforms non-personalized VFR in increasing sales. In addition, personalized VFR significantly increases post-purchase satisfaction and decreases the rate of product returns.
In follow-up lab experiments, we demonstrate the theoretical mechanisms behind the effects observed: VFR (especially personalized VFR) increases purchase intention by reducing consumers’ perceived risk associated with the purchase and increasing enjoyment of the shopping process; however, the positive effect of personalized VFR may be reversed when pre-purchase self-discrepancy becomes salient.
Our findings on the positive profit prospects of VFR (which increases sales and reduces returns) may help alleviate managers’ hesitation about adopting the technology. However, when implementing it, retailers should replace conventional promotional photos with personalized VFR instead of combining them.
Associate Professor, Whitman School of Management, Syracuse University
To learn more, read:
Try It On! Contingency Effects of Virtual Fitting Rooms (2019)
Shuai Yang and Guiyang Xiong, Journal of Management Information Systems, 36 (3), 789-822.