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Effects of Virtual Reality Retailing Store Atmosphere on Consumer Behavior

This research investigates the impact of Virtual Reality Retailing Store Atmosphere (VRRA) on consumer behavior. It explores the components of VRRA, their influence on consumer behavior, and how they affect the overall shopping experience.

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Effects of Virtual Reality Retailing Store Atmosphere on Consumer Behavior

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  1. Krasonikolakis Ioannis & Vrechopoulos Adam ELTRUN - IMES DEPARTMENT OF MANAGEMENT SCIENCE & TECHNOLOGY ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS Virtual Reality Internet Retailing (VRIR): Experimental Investigation of Interactive Shopping Interface – Store Atmosphere Effects on User-Consumer Behavior Thursday, 23 April 2009

  2. Research Positioning • Introduction • Literature Review • Current Business Practice • Research Questions and Objectives • Key Research Hypothesis • Research Methodology • Expected Contribution • References OUTLINE

  3. Interdisciplinary Approach • Information Systems • Human Computer Interaction • E-Commerce • Marketing • Retailing • Consumer Behaviour • Marketing Research Research positioning

  4. Store atmosphere affects consumer behaviour. Relevant research in online environments (especially Web 3.0) is on its infancy. Interdisciplinary research is most robust approach to investigate store atmosphere effects on consumer-user behaviour. Virtual Reality Retailing (VRR) shopping environment through the Internet has similarities and differences with all the other available retail channels. Second Life counted $1bn USD in 2005, and will grow to over $7bn USD by 2009 managing over $400,000 virtual currency transactions per day, supporting more than 7,000 profitable businessesEconomist (2006). introduction

  5. As Kotler (1973-4) first stated, retailers design their stores in ways that produce specific emotional effects to buyers, which influence their behavior. According to Lewison (1994) store atmosphere is the overall emotional and aesthetic effect which is created by a store’s physical features. Burke (1996), stated that 3D effectiveness in e-commerce lies in their ability to generate a virtual environment for the end-user in which his/her experiences will affect patronizing the physical environment. Literature review (1/5)

  6. Dailey (1999) first discussed about web atmospherics and Vrechopoulos, O’ Keefe and Doukidis (2000) introduced the term Virtual Store Atmosphere (VSA) and Vrechopoulos et al. (2004) investigated web store layout effects on consumer behaviour. Similarly, Siomkos and Vrechopoulos (2002) first defined “Virtual Store Atmosphere” of a web retail store as an element of the virtual retail mix. Manganari, et al. et al. (2007) introduced the term m-servicescape for mobile commerce while Koutsiouris et al. (2007) first discussed store atmosphere for location based retail (LBS) mobile services (L-Atmosphere). Finally, Mantzari et al. (2008) discussed the potential of manipulating Digital Interactive TV shopping environment. All studies call for further research on investigating e-atmosphere effects on consumer behaviour. Literature review (2/5)

  7. Online retailers could provide an atmosphere via their website which can affect shoppers’ image and experience with the online store (Eroglu et al., 2000). The field of consumer behaviour is the study of individuals or groups and the processes they use to select, use and dispose of products, services and experiences to satisfy needs and impacts that processes have on the consumer and society (Hawkins et al.,2007). Highly vivid interfaces such as 3D virtual stores provide motives, emotions, meanings and communication which are represented objectively (Mazursky & Vinitzky, 2005). Literature review (3/5)

  8. O’Reilly (2006), reports that in recent years it has become a real phenomenon for many people to interact within Virtual Retailing Environments (VREs) for real economic purposes. While retailing activity in the VRR context is quite active, research on designing the atmosphere of virtual reality retail stores is generally deficient (Apostolou, Koutsiouris and Vrechopoulos 2008). Literature review (4/5)

  9. Literature review (5/5)

  10. (Second Life, Cyworld, There, Active Worlds, etc.) • Levis • Toyota • Starwood Hotels • Swedish government • Teleporting • Flying • Myrl • Social aspect • Low barriers to entry Current Business Practice

  11. Which are the components of the Virtual Reality Retailing Store Atmosphere (VRRSA)? Do the VRRSA components affect consumer behavior? How the VRRSA components affect consumer behavior? Research questions and objectives

  12. H1: Virtual Reality Retailing Store Atmosphere (VRSSA) affects Consumer Behaviour. Key research hypothesis

  13. Literature review (emphasis on relevant empirical studies) Sector selection (e.g. clothing vs. tourism – virtual vs. “real” goods) Initial exploratory research Specific research hypotheses formulation Virtual reality retail store implementation Final conclusive causal research through lab experiment in the context of a virtual reality environment (e.g. Second Life) Research Methodology

  14. Theoretical • Definition of VRRSA • Development of the VRRSA Components’ Theoretical Framework • Provide evidence regarding causal relationships between VRRSA components and Consumer Behaviour • Managerial • Effective designing of VRR shopping environments (i.e. interfaces) towards meeting customer needs and preferences • Provision of guidelines regarding VRRSA customization in order to meet needs and preferences of different groups of individuals Expected contribution

  15. Apostolou, K., Koutsiouris, V., & Vrechopoulos, A. (2008). Retail Store Atmosphere Effects on Consumer Behavior in the Context of Virtual Reality. 5th Student Research Conference of Management Science and Technology, Athens, 8 May 2008 (in greek). • Bitner, M.J. (1992). Servicescapes: the impact of physical surroundings on customers and employees. Journal of Marketing, 56(2), 57-71.   • Booms, B.H., & Bitner M.J. (1981). Marketing strategies and organization structures for service firms. In Donnelly JH George WR (Eds.) Marketing of Services, American Marketing Association, Chicago IL: publisher, 47-51.   • Boyd, G., & Moersfelder, M. (2007). Global business in the metaverse: money laundering and securities fraud. The SciTech Lawyer 3 (3), 4-7.  • Burke, R. R. (1996). Virtual shopping: breakthrough in marketing research. Harvard Business Review, 74, 2, 120– 31.  • Dailey, L.C. (1999). Designing the World We Surf In: A Conceptual Model of Web Atmospherics. Chicago: American Marketing Association. • Eroglu, S.A., Machleit, K.A., & Davis, L.M. (2000). Online Retail Atmospherics: Empirical Test of a Cue Typology. In J.R. Evans & B. Berman (Eds), Retailing 2000: launching the new millennium. Proceedings of the Sixth Triennial National Retailing Conference presented by the Academy of Marketing Science and the American Collegiate Retailing Association. 144-150. • Kotler, P. (1973-4). Atmospherics as a Marketing Tool. Journal of Retailing, 49, 48-63.  • Lewison, D. M. (1994). Retailing. 5th edition. New York: Macmillan Publishing Company. • Mazursky, D., & Vinitzky, G. (2005). Modifying consumer search processes in enhanced on-line interfaces. Journal of Business Research, 58, 1299 – 1309. • Mothersbaugh L., Hawkins D., Best R.. (2007). Consumer Behavior. Irwin Professional Pub REFERENCES (1/2)

  16. O’Reilly, T. (2006). What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software. O’Reilly website, 30th September 2005. O’Reilly Media Inc. Available at: http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-Web-20.html • Shin, H.D. (2008). Understanding purchasing behaviors in a virtual economy: Consumer behavior involving virtual currency in Web 2.0 communities. Interacting with Computers, 20, 433-446.  • Siomkos, G., & Vrechopoulos, A. (2002). Strategic Marketing Planning for Competitive Advantage in Electronic Commerce. International Journal of Services Technology and Management, 3(1), 22-38. • The Economist (2006). Living a Second Life: Virtual economy. The Economist, 28 April, 2006.  • Vrechopoulos, P.A., O’ Keefe, M. R., & Doukidis, I.G. (2000). Virtual Store atmosphere in internet retailing. 13th International Bled Electronic Commerce Conference Bled, Slovenia, June 19-21.  • URL References: • http://www.secondlife.com • http://www.whyville.net/smmk/nice • http://play.toontown.com/webHome.php • http://www.virtualworldsreview.com/soracity/ • http://www.myrl.com REFERENCES (2/2)

  17. Thank you for your attention… QUESTIONS…

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