The Effects of Virtual Reality on Consumer Learning “An empirical Investigation”

1. The Effects of Virtual Reality on Consumer Learning“An empirical Investigation” Kil-SooSuh Yonsei University - KOREA Young Eun Lee University of British Columbia – CANADA 2005 - School of Business Presented by: Alyaa Hussien

2. Goals of the Study Examine whether the use of VR in Web-based storefronts positively influences consumer learning, including consumer intentions to purchase. Investigate whether and how the impact of VR on consumer learning may be contingent upon product type.

3. Outline Review previous research on VR and consumer learning. Present a review of existing literature on the theory of cognitive fit and product attributes. Explicate product types and predict the moderating effects of the different product types on consumer learning. Explaining research method and presenting data analysis. Summary of the results of the experiment.

4. Theoretical Background and Hypotheses

5. What is Virtual Reality ? VR is a computer-generated, interactive, 3D environment in which people become immersed. It provides interaction with the product & increased telepresence.

6. Virtual Reality (cont’d) It enables users to experience product virtually by examining and manipulating the visual images, functions, and features of products in a variety of ways. VR brings truth-likeness to Web-based stores, partially alleviating the major constraints caused by the lack of contact between consumers and products online.

7. Types of Virtual Reality • Depending on the extent of this immersion, VR applications can be classified into 2 categories: • Immersive Virtual Reality • Non-Immersive Virtual Reality

8. Immersive Virtual Reality Users wearing head-mounted displays are totally surrounded by enclosed virtual environments.

9. Non-Immersive Virtual Reality It’s most commonly conveyed by desktop or laptop computers. Thus, users’ VR experiences are limited to what they see on their display monitors and what they hear from their speakers.

10. Strengths of VR Interfaces

11. High Media Richness VR provides high levels of representational quality and volume of content in a mediated environment. The degree of media richness is determined by the sensory depth and breadth of an interface. VR has the capability to increase depth and breadth of an interface.

12. High Interactivity The degree to which users can manipulate the form and content of a mediated environment in real time. Interactivity is achieved when users are provided with immediate feedback through their perceptions that a mediated environment is modified based on their input. It offers a high level of control over computer-mediated environments in terms of user abilities to be active rather than passive.

13. Telepresence VR can generate a sense of “being there” in an environment by means of a communication medium. Sensory stimuli conveyed by a VR interface, can create a perceptual illusion of being present and highly engaged in a mediated environment, while in reality we’re physically present in another place.

14. Consumer Learning Consumer learning refers to any process that changes a consumer’s memory and behavior as a result of information processing. VR reduces ambiguity by providing rich information, and it motivates consumers by enabling them to interact with products. Thus, by providing VR, Web retailers can positively influence consumer learning about products.

15. Consumer Learning (cont’d) • Effective consumer learning is assumed to be a critical mediator of consumption and ascertained from : • Cognitive, • Affective, • Conative Dimensions.

16. Cognitive Dimension • The cognitive dimension determines the extent to which information about products enhances consumer comprehension. It can be measured based on either actual or perceived knowledge. • H1a. Compared to static interfaces, VR interfaces increase consumers’ actual product knowledge. • H1b. Compared to static interfaces, VR interfaces increase consumers’ perceived product knowledge

17. Affective & Conative Dimension • The affective dimension identifies whether or not consumer attitudes are influenced by particular stimuli. • The conative measurements investigate behavioral responses to various stimuli, such as purchase intentions that may be invoked by the stimuli.

18. Affective & Conative Dimension (cont’d) H2. Consumers’ attitudes toward products presented with VR interfaces differ from their attitudes toward products presented with static interfaces. H3. Consumers’ purchase intentions toward products presented with VR interfaces differ from their purchase intentions toward products presented with static interfaces.

19. Theory of Cognitive Fit and Product Types • The theory of cognitive fit posits that a match between IT applications and users’ tasks is important for the realization of positive results from IT. • Marketing research has demonstrated that an important influence on the consumer task is the nature of the product. • So, the advantages of VR are augmented only in relation to products whose critical attributes can be assessed adequately by the characteristics of VR.

20. Product Experience and Attributes

21. Salient attributes of products • Attributes that are most prominent & important when consumers make decisions about purchasing the products. • Virtually High Experiential (VHE): products whose salient attributes are mainly virtually experiential • Virtually Low Experiential (VLE): products whose salient attributes are not primarily virtually experiential

22. Salient attributes of products • H4a. Increases in consumers’ actual knowledge, effected by VR interfaces, are more significant for VHE products than VLE products. • H4b. Increases in consumers’ perceived knowledge, effected by VR interfaces, are more significant for VHE products than VLE products. • H5. The impacts of VR interfaces on consumer attitudes toward products are more significant for VHE products than VLE products. • H6. The impacts of VR interfaces on consumer purchase intentions toward products are more significant for VHE products than VLE products.

23. Research Method • A laboratory experiment was employed to empirically test the effects of VR on consumer learning and the moderating effect of product types. • To enhance realism, the similarity of experimental events to real experiences and the generalizability of the findings, They selected products sold in real Web-based stores and interfaces developed by a commercial VR application provider.

24. Experimental Design • A 2 × 2 factorial design with a • Within-subject factor : The Interface Design > had 2 levels: VR & Static. • Between-subject factor: The Product Type > had2 levels: VHE and VLE.

25. Counterbalancing Products

26. Web-Based Store Interface Design • Four Web-based stores, each offering four products. • Two used a VR interface; two used a static interface. • The two stores for each product type were identical. They contained the same products, information, and design, thereby ensuring information symmetry.

27. Choice of Products

28. Choice of Products

29. Dependant Variables • Actual knowledge was measured by a comprehension test. • Perceived product knowledge was assed by three existing Likert-scale items. • Participants’ attitudes toward the products were measured by adopting an established scale using seven-point semantic differential items . • Participants’ purchase intentions were assessed using an existing seven-point semantic differential scale.

30. Experimental Procedure • After the participants fully understood how to manipulate the interfaces, they were asked to navigate freely around the Web-based store for as long as they wanted. • After navigating around the store, participants were asked to minimize their browser windows and to complete the actual knowledge test.

31. Hypothesis Testing • Participants reported significantly higher scores for the Actual Product Knowledge test in the VR treatment than the static treatment. • H1aissupported. • Perceived Product Knowledge in the VR treatment was also higher than the static treatment. • H1b is supported.

32. Hypothesis Testing (cont’d) • The participants reported more Positive Product Attitudes in the VR treatment compared to those in the static treatment. • H2issupported. • Purchase Intentions for products in the VR treatment were more pronounced than those in the static treatment. • H3 is supported.

33. Hypothesis Testing (cont’d) • Although the enhancement of Actual Product Knowledgeby the VR treatment for VHE products (12.4%) was greater than that for VLE products (1.6 %). • H4ais NOTsupported. • The enhancement of Perceived Product Knowledge by the VR treatment for VHE (60%) was greater than that for VLE Products (8%). • H4b is supported.

34. Hypothesis Testing (cont’d) • The enhancement of Product Attitudes by the VR treatment for VHE (29%) was greater than that for VLE Products (11%). • H5is supported. • The enhancement of Purchase Intensions by the VR treatment for VHE (41%) was greater than that for VLE Products (14%). • H6 is supported.

35. Conclusion • VR enables consumers to experience products virtually over the Internet, alleviating consumers’ lack of physical contact with products. • Compared to static interfaces, consumers exhibit significantly higher levels of actual and perceived product knowledge, product attitude, and purchase intentions with a VR interface. • The type of a product, either VHE or VLE, moderates the effects of VR interfaces on consumer learning, except for the consumer’s actual product knowledge.

36. HOWEVER, Increases in purchase intentions do not always result in corresponding increases in actual purchases. It is difficult to estimate what increase in purchase intentions will be sufficient to compensate businesses for the costs involved in providing VR interfaces.

37. Conclusion (cont’d) • If Web-based stores want to enhance consumer learning with less concern for the costs necessary to achieve this goal, they can achieve it by adopting VR for all products. • However, it might not be worthwhile for e-commerce sites dealing in VLE products to introduce VR because the costs may exceed the benefits. • So, Vendors can use VR to represent only those VHE products that they want to highlight in a Web-based store, or display selected attributes only through VR, while displaying other qualities in static modes.