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"Virtual Reality in Retail: Contingent Effects if Virtual Fitting Rooms" by Dr. Guiyang Xiong

Event information
Marketing
Seminar
Wednesday, Aug 7 2019
KK 1301, K.K. Leung Building
  • 10:30 a.m. - 12:00 nn

Marketing Seminar

Speaker:

  • Dr. Guiyang Xiong
    Assistant Professor of Marketing
    Martin J. Whitman School of Management
    Syracuse University

     

Abstract:

A revolutionary application of the virtual reality technology in online retailing, virtual fitting room (VFR), has attracted increasing attention of researchers and practitioners. However, it remains unclear whether and how VFR influences sales and post-sales outcomes based on the limited literature, and how its effects vary across customer groups and product types. Hence, retailers hesitate in adopting the technology due to concerns about its profit prospects. In this research, we conduct large-scale field experiments with real-world customer behavior data to test the causal effects of different VFR designs, and lab experiments to unveil the underlying theoretical mechanisms. We find that, although VFR can have a sizeable positive effect on sales, it can be counterproductive when used improperly. Specifically, personalized VFR may not increase sales if used in combination with conventional product visualizations because self-discrepancy becomes salient under this condition. Moreover, VFR significantly influences post-sales outcomes, i.e., it enhances customer satisfaction and reduces product return rate. Finally, the effects of VFR are conditional on certain customer characteristics and product types, implying the importance of precision targeting.