Augmented Reality (AR) technology is revolutionizing the way we shop online, allowing consumers to virtually place products in their own environment. A team of researchers at the Faculty of Economics and Management contrasted AR-enhanced product views against conventional 2D images to determine their effects on consumer preferences.

In the latest edition of the University of Lucerne’s annual report (German only), research team member Leif Brandes, Professor of Marketing & Strategy, shares some of what his team has uncovered.

"We found that the likelihood and readiness to buy a good product remains the same, regardless of whether I look at it with a 2D image or with AR," Brandes says. "But for an inferior product, the readiness to buy is significantly higher when it is viewed with AR."

Psychological ownership and bias

According to Brandes, “AR causes a systematic bias in the judgement of products of different quality levels."

The phenomenon behind this bias is known as psychological ownership. "AR gives us the feeling of owning something because we can look at it in our own environment," Brandes explains. Apparently, the feeling that we already own the product leads us to perceive inferior products as better.

Practical implications for retailers

Should high-quality product providers avoid using AR? "Not necessarily," Brandes advises. "While AR helps inferior products, it does not harm better ones per se. However, it reduces the perceived difference in quality between them.” Hence, consumers' willingness to pay more for an inferior product increases when viewed with AR. This suggests that AR can have a significant impact on sales, particularly for lower-quality items.

Looking ahead, Brandes sees AR's greatest potential in helping consumers make more informed decisions. For example, AR can make it easier to decide on sunglasses by allowing you to better assess the size and fit of the product. The ability of AR to provide a more accurate representation of products before purchase may reduce the number of product returns. The reduction in returns may consequently result in higher customer satisfaction and lower emissions. 

The results of the study "Buyer, Beware: Augmented Reality Product Display Increases Consumer Preferences for Inferior but Not for Superior Products " (working title) are currently under peer review for publication in a scientific journal. The study is part of the Swiss National Science Foundation-funded project,"Augmented Away: The Effects of Consumers’ Immersion in Augmented Reality on Brand Preference, Perception, and Choice."