Are young consumers open to integrating augmented reality into their shopping experience and should retailers embrace this technology in the form of a new marketing strategy?

Abstract

Stagnating sales after the financial crises of 2008 and the ongoing current European sovereign‐debt crises are a growing concern for retailers worldwide (Wallop, 2012). This dissertation focuses on current technologies, particularly augmented reality, and its potential use in the retail industry. Moreover, this work attempts to evaluate whether AR technology has a real application in retail sector (if correctly implemented). This dissertation met the research objectives through an extensive study of relevant literature and the adoption of practical research approach. The research method chosen for this study was an Internet survey, where primary data was collected in order to understand the current outlook of young consumers on augmented reality in retail. The willingness of young people to use augmented reality and interact with products through this technology was analyzed as well. The findings from this research provide evidence that young consumers are in general willing to use augmented reality during their shopping, once familiarized with the benefits of this technology, as they value the experience augmented reality brings. Nonetheless, most young consumers are not yet fully aware of augmented reality and its different forms (Desktop, Web‐based and Mobile). By applying the Resource Based View framework this research further attempts to highlight the conditions under which augmented reality could have a strategic impact for retailers, and how retailers could turn this technology into a (sustained) competitive advantage. The main conclusion drawn from this research is that augmented reality as a new retail technology can become a strategic resource in the form of a marketing instrument enhancing the relationship between retailers and their customers. Moreover, the data collected demonstrates that consumers are looking for a way to connect with products (and hence retailers) both online and offline. Therefore, this dissertation recommends that retailers take advantage of this technology and incorporate AR in their marketing strategy, however not as a new strategy but rather as a supporting tool to their marketing. Moreover, in order to sustain AR’s value, retailers need to further innovate from within and aim at a superior customer service through AR.