Journal of Strategic Marketing

ISSN: 0965-254X (Print) 1466-4488 (Online) Journal homepage: https://www.tandfonline.com/loi/rjsm20

Engagement with chatbots versus augmented

reality interactive technology in e-commerce

Emi Moriuchi, V. Myles Landers, Deborah Colton & Neil Hair

To cite this article: Emi Moriuchi, V. Myles Landers, Deborah Colton & Neil Hair (2020):
Engagement with chatbots versus augmented reality interactive technology in e-commerce, Journal
of Strategic Marketing, DOI: 10.1080/0965254X.2020.1740766

To link to this article: https://doi.org/10.1080/0965254X.2020.1740766

Published online: 30 Mar 2020.

Submit your article to this journal

Article views: 218

View related articles

View Crossmark data

Full Terms & Conditions of access and use can be found at

https://www.tandfonline.com/action/journalInformation?journalCode=rjsm20
JOURNAL OF STRATEGIC MARKETING
https://doi.org/10.1080/0965254X.2020.1740766

Engagement with chatbots versus augmented reality

interactive technology in e-commerce
Emi Moriuchi, V. Myles Landers, Deborah Colton and Neil Hair
E.Philip Saunders College of Business, Rochester Institute of Technology, Rochester, NY, USA

ABSTRACT ARTICLE HISTORY

As competition intensifies in the retail industry organizations are Received 25 February 2019
increasingly turning to forms of artificial intelligence as a means of Accepted 4 March 2020
differentiation. E-commerce companies are moving towards inte- KEYWORDS
grating technologies such as chatbots and augmented reality inter- Augmented reality
active technology which have proved to be popular solutions to interactive technology;
customer service in the practitioner domain. However, little is chatbots; technology
known about consumers’ attitude and engagement with these engagement; e-commerce;
emerging technologies when used in a retail environment. consumers; retail
A theory-based research model which was designed to uncover
the motivational mechanisms needed to provide engagement and
effective decision-making processes in this context. Empirical test-
ing conducted with a field study supported the proposed model.

Introduction
In this highly dynamic and interactive business environment, the role of consumer
engagement in creating customer experience is receiving attention from marketing
practitioners and academics. With the increased reliance on technology, consumers are
urged to use technology in their daily lives, including during the purchasing process. The
explanation and prediction of user adoption of new technology while being engaged
with the brand have been gaining attention in both academia and in practice. Among
many technology-related models, the technology acceptance model (TAM) (Davis et al.,
1989) is regarded as the most widely cited and replicated in quantitative studies across
many disciplines. Although TAM is a robust theoretical framework in explaining user
adoption of technologies it does not take into consideration consumer’s readiness to
adopt and the interaction between technology and consumers. There are other models
that are applicable in explaining human-computer interactions, including Theory of
Conversation (ToC) (Pask, 1980) and the Partially Observance Markov Decision process
(POMD) (Doshi-Velez, 2009).
Consumers in retail environments engage in face-to-face service, e-service creation,
and delivery process (Dabholkar & Bagozzi, 2002) as well as hybrid interactions (e.g. omni-
channel). In e-service contexts, service cannot be created as a separate activity from
consumers’ active participation (Lovelock & Wirtz, 2004). Due to the recent increased
demand of co-creation processes which requires involvement of customers to co-produce

CONTACT Emi Moriuchi emoriuchi@saunders.rit.edu

© 2020 Informa UK Limited, trading as Taylor & Francis Group
2 E. MORIUCHI ET AL.

the service, and to take individual differences into consideration, this study uses ToC and
POMD to better understand consumers’ intentions to use artificial intelligence technolo-
gies, such as chatbots and more interactive technologies such as augmented reality
interactive technology (ARIT).
This research contributes toward the digital marketing literature by field testing two
prominent types of interactive technology (i.e. chatbots and Augmented Reality
Interactive Technology) in a retail environment by investigating consumers’ engagement
and purchasing intentions. This study focuses on technology but from an engagement
perspective through a field experiment. Specifically, the engagement with technology
literature is used to explore how the level of engagement differs depending on the type of
technology involved. Two emerging technologies chatbots and Augmented Reality
Interactive Technology (ARIT) were used to test the mediation technology engagement.
This study contributes toward the marketing literature by complementing existing
research that has drawn attention to how consumers interact with technology and how
that affects their behavioral outcomes in a retail context. Customer contact, or the
interaction between the company’s frontline employee (or technology) and its customers,
often initiates the design of new service (Cook et al., 1999). These interactions also have an
influence in the efficiency of service process (Fließ & Kleinaltenkamp, 2004) and custo-
mer’s perception of what they perceive as quality service (Cronin et al., 2000; Taylor &
Baker, 1994; Wakefield & Blodgett, 2016). Modern technology has been adopted sporadi-
cally around the world with different impact on sales revenue and customer service.
According to Waghmare (2019), 70% of people prefer texting, which is reading a chatbot’s
message rather than calling and placing an order. Optimistically, chatbots have an
opportunity to sell products based on the needs of each customers. Furthermore, since
these chatbots are machine leading AIs, they have the capability of remembering
a customer’s answer and tailor their responses accordingly. While there are positives
toward integrating chatbots into the marketing funnel, as a result of static programs to
design chatbots, sometimes consumers are stuck with a programmed question, which
leads to a poor customer experience and create loss.
Second, this research introduces the ToC and POMD theory into the marketing litera-
ture and demonstrates that it provides a novel avenue for examining consumer behavior
related to engagement and interaction with technology. This research expands marketers’
understanding about the potential strategic effects of integrating technology, specifically
in a retail environment. The effect of using technology affects consumers in different
stages of their consumer’s buyer’s journey starting with increasing their awareness about
a company, considering the products that are offered by the company, and lastly, the
decision to purchase the product offered by the company. The findings debunk the claims
that chatbots and augmented reality interactive technology (ARIT), which are novel
technologies, are helpful in affecting consumers’ attitude toward a retail company and
their willingness to purchase. The results explain which technology is useful in a particular
consumers’ buying journey for the consumers.

Research framework and hypothesis development

In the last decade, novelty in technology has moved from being futuristic to becoming
a reality. Technology systems continue to advance while attempting to address
 JOURNAL OF STRATEGIC MARKETING 3

consumers’ needs and wants in their work and social life. Through the advantage of
having a combination of wireless connectivity and portable devices (e.g. Internet of
Things), people are rethinking how they want to adjust their social life (e.g. shopping).
Research has shown that a regular e-commerce transaction (e.g. Amazon.com) is no
longer desirable and is affecting company’s return on investment (ROI). In order to survive
in a highly competitive market, companies are attempting to figure out a strategy that can
improve their conversion rate while maintaining high engagement in their e-services.
Depending on where the consumer is in the buyer’s journey, embracing and utilizing
technology would be different.
Two types of emerging technologies: chatbot and augmented reality interactive
technology (ARIT) are employed in a field experiment in this study. Chatbots are a form
of AI that simulates conversations with human users, improving with interactions over-
time by implementing continually learning algorithms. Chatbots allow consumer to
obtain real-time information through text conversations (Sivaramakrishnan et al., 2007).
Features of chatbots making them attractive to industry are chatbots’ ability run complex
interactions with consumers at scale, 24/7 customer service, and greater customer
engagement across technological platforms. Chatbots are programs designed to conduct
natural language conversations with users. For example, consumers may type a question
or statement, and will receive a response in a natural language style. Chatbots have the
potential to serve several varieties of online functions including site guides, virtual
support, customer service representative, sale agents, and many more.
Augmented reality interactive technology (ARIT) refers to an integration and merging
of both physical and virtual objects that compliment, interact, and support each other
(Ohta & Tamura, 2014). Augmented reality interactive technology enables users to experi-
ence additional audio-visual components that essentially augment a physical reality. The
use of augmented reality has evolved as this medium gradually becomes more sophisti-
cated. One of the key features of augmented reality interactive technology is its inter-
active platform. Craig (2013) discusses how interaction is a key player in the overall user
experience. While augmented reality interactive technology is still relatively new in
marketing, this technology is predicted to grow into a full suite of possibilities that will
exist in the near future. Augmented reality interactive technology has the capability to
provide a superior experience only when its ‘unique capabilities and affordances are taken
advantage of’ (Soeggard, para. 3). Augmented reality interactive technology, similar to
a normal interaction, is defined as a rough mutual influence of one thing on another. Craig
(2013) discussed that interactions can occur between a participant and an augmented
reality interactive technology, or a participant and another participant via an augmented
reality app. For most practical definition, any action taken by a user in an augmented
reality interactive technology experience can be considered as a form of interactions.

The theory of conversation (ToC)

The theory of conversation (ToC) is often used to discuss the theory of human commu-
nication and social interaction. Conversation is an exchange of information which begins
with a shared reference. In this study, ToC is applied between a chatbot (e.g. mimicry
agents) and a consumer. Mimicry agents give the impression that a conversation is
happening without the technology having a true understanding about what is being
4 E. MORIUCHI ET AL.

said. Modern mimicry agents use deep learning to learn from example conversations.
A deep learning method is used for parroting is usually sequent-to-sequence models.
According to Mugan (2017), when applying ToC to chatbots, it begins with a shared
reference and this reference is about a set of known things. The meanings that were
coded in are not mapped to a grounded sense of action in the agent. To generate
conversations through a chatbot, the sequence-to-sequence models treat a statement
as the source language, and they treat the response as the target language. The challenge
with a sequence-to-sequence model is that they lack meaning and they are insensitive to
specifics. This mimicry agent is virtual which has never used the object at hand. This
means that understanding will be limited. Meaning negotiation is not readily available for
mimicry agents. This can create conversational gaps when engaging with consumers.

Partially observed Markov decision process (POMDP)

In the field of technology, a lot of advancements have been achieved to ease the human-
computer interaction (HCI). The technology applications such as augmented reality (AR),
are not really aware of the intentions of the people using them. These applications simply
interact with the consumers if asked to order a task. Recently, there is an increase number
of applications where a robot collaborates with a human partner. The system and human
act jointly as equals to accomplish their mission (Karami et al., 2010). The use of augmen-
ted reality has evolved as this medium gradually becomes more sophisticated. Unlike
chatbots, augmented reality does not participate in an ongoing conversation.
Clothing retailers use augmented reality interactive technology (ARIT) to enable con-
sumers to move beyond the static images of clothes to immediately seeing the result
when virtually trying on the clothes, which saves time and energy. ARIT is an advanced
image interactivity technology which has the capability in stimulating user’s actual
experience with the product or environment.
Several studies used Partially Observed Markov Decision Process (POMDP) to explain
the interaction between human and computer systems (Krishnamurthy, 2016; Williams &
Young, 2007). Migge (2013) posited that POMDP is able to provide a framework to explain
the nature of augmented reality and human interaction with ‘partial observability in terms
of uncertain action effects and incomplete knowledge of the resulting system dynamics
with respect to multiple objectives’ (p. 21). For example, when a consumer uses an
augmented reality interactive technology, the consumer would not know what to expect
from this application, and thus are unable to expect an outcome. In other words,
augmented reality interactive technology in nature has uncertainty in its decision out-
comes, and POMDP is a method that has the ability to explain this interaction between
the uncertainty decision outcomes of augmented reality interactive technology and
human’s decision-making process. However, with consistent interaction with the aug-
mented reality interactive technology application, the consumer will be able to have an
expected outcome and thus will change their behavior to trigger a different outcome
from the augmented reality interactive technology. In the retail context, consumers have
moved beyond the ease of use and usefulness of technology. Consumers have reached
a certain level of familiarity with technology adoption, which forms either a positive or
negative attitude. This attitude in turn affects their engagement with the technology at
hand.
 JOURNAL OF STRATEGIC MARKETING 5

Chatbots, also known as disembodied conversational agents (DCAs) are now a reality on
social media as well as on messaging apps. Chatbots are seen as a means for direct consumer
engagement through text messaging for service and marketing purposes. However, the
transition from an established user interface such as a website to a chatbot is not easy.
While there is optimism regarding the launch of a chatbot as a substitution for a human
customer service personnel, there is a lack of understanding of how customers would react to
these chatbots (Ferrara et al., 2016). These chatbots are designed to execute simple tasks such
as giving advice on clothing choices or as simple as answering frequently asked questions by
the consumers. Araujo (2018) asserted that this type of technology yield mixed results
including failure rates in social media interactions such as Facebook. Furthermore,
Brandtzaeg and Følstad (2017) found that chatbots are often used for productivity purposes,
which refers to the ability to solve an issue or provide quick and consistent feedback. If
a chatbot is able to resolve issues immediately, then consumers are likely to gravitate toward
such a technology as it enables immediate responses. However, since this type of technology is
machine learning artificial intelligent (AIs), which means that it is programmed by humans,
consumers are skeptical about their interaction with these chatbots (Kaczorowska-Spychalska,
2019). Thus, there is a general resistance against chatbot technology (Araujo, 2018; Rosenthal
2017).

H1: Attitude toward technology has a positive (negative) impact on technology engage-
ment for augmented reality interactive technology (chatbot).

Technology has been changing consumers’ behavior in this technologically driven mar-
ketplace. To differentiate themselves, companies are jumping on the bandwagon to
attract consumers by being tech savvy. The fact that customer expectations have been
increasing tremendously. Research has shown that consumers’ attitude toward technol-
ogy does have an impact on the retail store (Collier et al., 2015; Eastlick et al., 2012; Lee,
2015). Therefore, it is expected that consumers’ engagement with technology has an
impact on attitude towards firm.

H2: Technology engagement of an augmented reality interactive technology and

a chatbot has a positive impact on attitude toward firm that uses augmented reality
interactive technology or chatbot.

H3: Attitude toward augmented reality interactive technology and chatbot has a positive
impact on attitude toward firm that uses augmented reality interactive technology or chatbot.

Attitude toward firm, satisfaction, and behavioral outcome

The relationship between attitude and satisfaction has received a good deal of attention in the
literature (José Sanzo et al., 2003; Moriuchi & Takahashi, 2018). Rust and Oliver (1994) argued
that customer satisfaction (or dissatisfaction) is a cognitive or affection reaction toward their
experience of a service encounter. Satisfaction is measured as a post-consumption experience
which compares their perceived attitude (e.g. quality of product) with their expected attitude.
6 E. MORIUCHI ET AL.

Sivadas and Baker-Prewitt (2000) found that the increasing emphasis on customer
satisfaction could be attributed to the overall decline in behavioral outcome (e.g. custo-
mer loyalty, revisits, shopping intentions).

H4: Attitude toward firm who uses augmented reality interactive technology and chabot
has a positive effect in consumer’s satisfaction toward the firm.

The core usage of chatbots is to allow users to access information as though they have
a human to consumers’ interactions throughout their decision-making process. According
to Faggella (2018), companies have adopted chatbots because they are eager to solve
issues such as handling a large volume of requests from its customers, and it eases
consumers’ through their purchasing processes. This suggests that chatbot is often used
as an information-gathering tool (e.g. personal assistant). Chatbots are not multisensory
and do may not have the capability of combining bother real and virtual contents and
aligning it with real and virtual objects to stimulate a user’s actual shopping experience
with the product. Furthermore, Larivière et al. (2017) found that the interface between the
company and the consumers is gradually evolving to be less human-driven and more
technology dominant. In other words, companies are using intelligent assistants, which
lacks human-like attributes, to serve as a service interface. Thus, in comparison to real-life
interactions, for example, between a sales representative and the consumer, the chatbot
lacks the responsiveness and personalization, which in turn has a negative impact on
consumers’ satisfaction with the company. This negative impact will then have a ripple
effect on consumers’ intention to shop at the particular company or brand.
Huang and Liao (2015) argued that augmented reality interactive technology (ARIT) creates
interactive simulation experience that closely resembles the information acquired by examin-
ing the product directly. This capability reduces the level of product risk perceived. Augmented
reality interactive technology allows consumers to see dimensional virtual objects and has it
superimposed upon the real environment. Augmented reality interactive technology allows
a multisensory simulation experience which enriches the shopping experience. McCarthy and
Wright (2004) argued that this persuasive form of technology should be able to deliver
experiential value rather than just a functional technology. ARIT creates value in the form of
visual satisfaction, enjoyment, and other positive outlook which are factors that increases
consumers’ willingness to make a purchase (Kim and Forsythe, 2008a, 2008b).

H5: Consumers’ satisfaction has a positive impact on revisit intention for that uses
augmented reality interactive technology or chatbot.

H6: Consumers’ satisfaction has a positive impact (negative) on shopping intention when
using augmented reality interactive technology (chatbot).

Data collection
Data were gathered through undergraduate students from a private university. Respondents
were offered extra credit for their participation. The final sample consisted of 68 respondents.
The respondents were between the ages of 18–24. Female respondents represented 54.4%
of the sample. We measured our constructs using 7-point Likert scales anchored by
 JOURNAL OF STRATEGIC MARKETING 7

Shopping
Intention

Attitude Attitude Satisfaction

Technology
toward toward Firm Revisit
Engagement
AR/chatbot

Figure 1. Research Framework.

1 = Strongly Disagree and 7 = Strongly Agree or 7-point semantic differential scales. All of the
scales were adapted from existing scales to fit the nature of this study. Each participant was
randomly assigned to a technology: Augmented Reality Interactive Technology (ARIT)
(n = 32) or chatbot (n = 36). Each respondent first answered a pre-experiment survey
which is about their general behavior toward technology usage. Then, respondents were
asked to interact with their assigned technology (ARIT or chatbot) for approximately 15 min
on a given table. Both mobile applications (hereafter app) were available in Google’s Play
store. During the ARIT interaction, participants interacted with the brand’s mobile app
branded as ‘AR watch’. During the chatbot interaction, the participants interacted with the
brand through the mobile app branded as ‘Kik’ for make-up products. Both the ARIT and
chatbot interactions were conducted on tablets. The task was to assume that they needed to
purchase a product (e.g. accessories or make-up). To provide a realistic purchasing process,
the participants decided how to interact with the technology. Participants were interacting
with one of the two well-known retail brands. There were no cross-brand differences. The
products were either a watch or make-up products. After the respondents were done
interacting with the technology, they then completed an after-experiment survey which
asks questions on their attitude, satisfaction, revisit, and purchasing intentions.

Results and analysis

Cronbach’s Alpha was evaluated for scale internal consistency. All measures demon-
strated reliability with alpha values of.77 and greater. Construct validity was examined
based on the factor loading estimates, construct reliabilities, variance extracted percen-
tages and inter-construct correlations (Hair, Babin and Krey, 2017). All factor loading
estimates were significant (p < .001), with the lowest being .74 and the highest being
.99. Items with factor loading of < .04 were removed. The variance extracted estimates
were .77, .77, .59 .99, .99, and .76 for attitude towards firm that uses technology (ATTF),
attitude toward technology (ATTTECH), engagement with technology (ENGT), revisit
(REVISIT), satisfaction (SATIS), and shopping intention (SHOP) respectively. The composite
reliability estimates were adequate, ranging from .85 to .1.00 (see Tables 1 and 2).
To assess the convergent validity of the measurements, Fornell and Larcker (1981)
propose examining three metrics: the item reliability of each measure; the composite
reliability of each construct; and the average variance extracted for each construct and the
inter-construct correlations (see Table 2). As shown in Table 1, all of the constructs’
average variance extracted (AVE) values are well above the minimum threshold of 0.50
(Bagozzi and Yi 2012). All of the standardized loadings were above 0.50 (p < .001),
8 E. MORIUCHI ET AL.

Table 1. Measurement items and internal consistency.

Coefficient alpha CR AVE
ATTTEC1 Bad . . . Good .90 .93 .77
ATTTEC2 Useless . . . Useful
ATTTEC3 Negative . . . Positive
ATTTEC4 Unappealing . . . Appealing
ATTF1 Boring . . . Interesting .96 .96 .77
ATTF2 Bad . . . Good
ATTF3 Negative . . . Positive
ATTF4 Unappealing . . . Appealing
ATTF4 Unpleasant . . . pleasant
ENGT1 I feel comfortable engaging with chatbots .77 .85 .59
ENGT2 I feel that the engagement I have with a chatbot is very human like
ENGT3 The engagement I have with a chatbots is very meaningful
ENGT4 I am having fun when I am engaging with a chatbots
REVISIT1 Very Improbable . . . very probable .99 .99 .99
REVISIT2 Impossible . . . possible
REVISIT3 No Chance . . . certain
SATIS Unfavorable . . . favorable .99 1.0 .99
SATIS Unsatisfactory . . . satisfactory
SATIS Negative . . . positive
SATIS Disliked . . . like
SHOP The likelihood that I would shop in this store is high. 0.85 .90 .76
SHOP I would be willing to buy gifts in this store.
SHOP I would be willing to recommend this store to my friends.
ATTTEC: Attitude toward technology; ATTF: attitude toward firm; ENGT: Engagement with Technology; REVISIT: Revisit the
company’s website; SATIS: Satisfaction toward the retailer that uses technology; SHOP: Shopping intention

Table 2. Inter-construct correlations and the square root of AVE (Fornell–Larcker Criterion).
ATTF ATTTECH ENGT REVISIT SATIS SHOP
ATTF 0.879
ATTTECH 0.454 0.879
ENGT 0.504 0.757 0.768
REVISIT 0.087 0.141 0.138 0.999
SATIS 0.115 0.154 0.158 0.995 0.999
SHOP 0.318 0.425 0.231 0.154 0.122 0.870
ATTTEC: Attitude toward technology; ATTF: attitude toward firm; ENGT: Engagement with Technology; REVISIT: Revisit
the company’s website; SATIS: Satisfaction toward the retailer that uses technology; SHOP: Shopping intention

demonstrating indicator reliability (see Table 4). Similarly, the model constructs attained
high Cronbach’s alpha and composite reliability (p) values that were greater than 0.90,
implying internal consistency. All of the constructs exhibit discriminant validity (see
Table 3). Discriminant validity is also measured using the Heterotrait–Monotrait Ratio
(HTMT) quality criteria. The maximum HTMT value was 0.90, which is at the threshold of
0.90 (Henseler et al., 2015).
A complete bootstrapping procedure was conducted to check the HTMT inference. The
maximum HTMT value was 0.61, which is below the threshold of 1.0 (Henseler et al., 2015).
To check for a multi-collinearity problem, the variance inflation factor (VIF) was calculated
at 2.3, which is below the threshold of 5 (J. F. Hair et al., 2011), and the tolerance level was
above 0.2. These results show strong evidence for the reliability and validity of construct
measures. According to F. Hair et al. (2014), PLS-SEM does not assume that the data are
normally distributed. Thus, instead of using the Kolmogorov–Smirnow and Shapiro–Wilki
test, PLS-SEM uses a bootstrapping procedure to test the significance of the path
coefficient.
 JOURNAL OF STRATEGIC MARKETING 9

Table 3. Heterotrait–Monotrait Ratio (HTMT).

ATTF ATTTECH ENGT REVISIT SATIS SHOP
ATTF
ATTTECH 0.479
ENGT 0.576 0.896
REVISIT 0.098 0.148 0.158
SATIS 0.120 0.162 0.181 0.996
SHOP 0.372 0.474 0.292 0.159 0.123
ATTTEC: Attitude toward technology; ATTF: attitude toward firm; ENGT: Engagement with Technology; REVISIT: Revisit
the company’s website; SATIS: Satisfaction toward the retailer that uses technology; SHOP: Shopping intention

Table 4. Path Analysis and Hypotheses.

Chatbot ARIT
Path Path
Hypothesis coefficient t-value coefficient t-value Support?
Hypothesis 1 Attitude toward technology → 0.79*** 0.80 0.66*** 7.94 Yes
Technology Engagement
Hypothesis 2 Technology Engagement→ Attitude 0.05 n.s. 1.99 0.57*** 3.12 Partially
toward Firm supported
Hypothesis 3 Attitude toward technology→ attitude 0.54** 2.23 0.12 n.s. 0.47 Partially
toward Firm supported
Hypothesis 4 Attitude toward Firm →Satisfaction 0.15 n.s. .48 0.44*** 3.17 Partially
supported
Hypothesis 5 Satisfaction → Revisit Intention 0.99*** 10.64 0.54*** 3.88 Yes
Hypothesis 6 Satisfaction → Shopping Intention 0.12 n.s. 0.49 0.59*** 5.40 Partially
supported
<.10*, <.05**, <.01***

Evaluation of the structural model

The essential criterion in PLS path models for the assessment of the structural models is
the coefficient of determinations (R2) of the endogenous latent variables (Henseler et al.,
2009). The percentages of the explained variance (R2) value for attitude toward firm which
uses technology (ATTF), technology engagement (ENG), attitude toward technology
(ATTTECH), revisit intentions (REVIST), satisfaction (SAT), shopping intentions (SHOP) are
.27, .57, .99, .01, and .01, respectively. We ran a bootstrap analysis by following the
procedure suggested by F. Hair et al. (2014). The nonparametric bootstrap analysis of
5000 subsamples and 68 cases revealed the proposed relationships. Three relationships
were not significant for the chatbot group, and only one relationship was not significant
for the ARIT group (see Table 4).

Predictive validity (Q2)

The Stone-Geisser’s Q2 test is the principle measure for the assessment of the predictive
relevance of the exogenous latent variables (Lis & Horst, 2013). The fundamental notion
of this measure is that the model should be able to sufficiently predict each endogenous
latent construct’s indicators (J. F. Hair et al., 2011). This test was conducted through
a blindfolding procedure within SmartPLS, to estimate the cross-validated redundancy
measures Q2. Based on the results, the omission distance (OD) was 7. This is within the
suggested range of between 5 and 10 (Wong, 2013). The resulting Q2 values greater
than zero indicate that the observed values are well reconstructed and that the
10 E. MORIUCHI ET AL.

exogenous constructs have predictive relevance for the endogenous construction

under consideration, whereas Q2 values less than zero suggest the contrary (Ayeh
et al., 2013). All Q2 values are significantly above zero, which is evident of the model’s
predictive relevance.

Discussion
E-Commerce are increasingly being made available to consumers worldwide. However,
these e-commerce outlets are constantly under scrutiny for technology engagement as it
goes beyond frontline employees (e.g. humans) and the traditional services offered
online. Companies have been seeking more than just involvement with consumers as
they are aware of the impact of engagement with their return on investment. With an
increasing number of e-commerce activities online, companies are seeking a competitive
edge over their competitors in their e-service offerings. With the disadvantage of not
having a face-to-face interaction with the consumers, companies are overcoming that
hurdle increasing their engagement with their consumers using technology. Technology
engagement offered online evolved over time from live chats to chatbot and other more
advanced technology such as augmented reality interactive technology. E-services are
often referred to as “assets-information, business processes, computing resources, app,
made available via the Internet as a means of creating service efficiency. To address the
increasing demand to strengthen customer-service relationships, transactional efficien-
cies, and improvement in customer satisfaction (De Ruyter et al., 2001), e-services have
been the center of attention in this highly technology reliant society.
While e-services are convenient and create efficiencies for consumers, little is under-
stood about the role of engagement and the match between type of technology and type
of services. When e-services are considered as a combination of the client-side user
interface and programs operated by the company’s servers, the Human-Computer
Interaction (HCI) research discipline together with communication theories was used to
guide this research. In this study, the products that we used were considerably hedonic in
a sense that consumers are conscious in how they dress. The results show that people
have a more pleasant experience when interacting with an augmented reality app than
a chatbot app. Even though there were no verbal communications (e.g. written text),
respondents seem to enjoy their time interacting with the augmented reality interactive
technology than with the chatbots.
In general, the respondents’ attitude toward technology did affect how they engage
with the technology (e.g. augmented reality interactive technology vs. Chatbots).
However, this technology engagement did not change these respondents’ attitude
toward the company that owns that technology when they interacting with Chatbots,
which had a ripple effect on their satisfaction toward their shopping experience. Based on
the results, the augmented reality interactive technology seems to be a better choice for
technology engagement for consumers rather than chatbots despite the lack of verbal
communications. This suggests that it is more of the experience with the engagement
rather than the verbal feedback. According to the Partially Observed Markov Decision
Process (POMD), it suggests that the engagement with a technology is about user
experience and the uncertainty. When respondents interact with the augmented reality
interactive technology, they are not sure what to expect. For example, when respondents
 JOURNAL OF STRATEGIC MARKETING 11

move their wrist in different directions while playing with the augmented reality inter-
active technology on the tablet, they are not sure what to expect or what feedback they
would obtain from the augmented reality interactive technology. In other words, there is
no held expectation. However, respondents who used chatbots have expectation of
productivity, which is to receive information based on their questions. Theory of
Conversation explains that when mimicry negotiation is not readily available (e.g. chat-
bots), the chatbot is not able to provide meaningful feedback. Furthermore, Coniam
(2014) added that most of the chatbots are not able to fulfil the expectations of the
users’ needs due to unclear purposes or intention of the question asked, illogical
responses, or insufficient usability. According to the Expectation-Confirmation theory
(ECT), it explains that consumers’ decision to repeat their usage on a piece of technology
is dependent on their experience with their initial usage of the technology. Furthermore,
Ayanso et al. (2015) added that when consumers are using any piece of technology such
as chatbots, there is a continual update of user expectations as they gain more experience
with that piece of technology. Another takeaway from this experiment is that, augmented
reality interactive technology may be more suitable for consumers who are in the
consideration stage (consumer leads), whereas chatbots are suitable for consumers who
are looking for information about a product or service who does not need interactive
engagement.

Managerial implications
Technology integration in e-commerce has been gaining attention in the retail environ-
ment. Several companies have turned toward advanced technologies such as Artificial
Intelligence (AI) including chatbots, voice assistants, and other more sophisticated soft-
ware such as augmented reality. These technologies are delivered on demand via the
Internet, can provide consumers utility gains measured in convenience, efficiency, and
most importantly engagement. Little is known, in academic literature, on how consumers
perceive these technologies that they use during their shopping activities. Results in this
study found that engagement with the augmented reality interactive technology
increases attitude toward the firm and therefore affecting revisiting of an online store
as well as shopping intention. On the contrary, technology engagement via chatbot did
not have an impact on consumers’ attitude toward the firm. According to the Theory of
Conversation, it may seem that the limitations on what a chatbot can do are more than an
augmented reality interactive technology. Thus, restricting the deeper level of engage-
ment between consumers and the brand.
Caro and Sadr (2019) the role of Internet of Technology (IoT) plays a role in the retail
context as these IoT initiatives allow companies to rebalance supply and demand as well
as integration of all the customer touchpoints. The adoption of IoT devices includes
sensor devices, display devices such as chatbots and AR. They asserted that the advance
uses of augmented reality and chatbots could drive unique customer experiences by
providing digital touchpoints.
From a managerial perspective, this paper offers a number of useful insights. This study
provides evidence that technologically enhanced firms will reap benefits even before
a consumer engage with that firms’ technology. Therefore, managers should actively try
to implement new technologies when it is economically feasible. The findings in also aid
12 E. MORIUCHI ET AL.

practitioners by demonstrating the role of engagement when using two different technol-
ogies. Due to time constraints placed on consumers, consumers are increasingly opting to
shop out of the store. Based on the findings, augmented reality interactive technology
leads to more engagement and better behavioral intentions. Therefore, firms should look
into implement augmented reality interactive technology for engagement purposes. This
will allow consumers to have a high level of engagement with the firm without having to
physically be in the store. Contrary to this finding, chatbots did not have an influence on
overall attitude towards the firm. Therefore, chatbots should not be thought of as an
engaging technology. That does not mean managers should discontinue chatbot use.
Rather, chatbots should be integrated as a communication tool for consumers who are
seeking straightforward answers (e.g. service support). These chatbots are also useful in
providing immediate responses for consumers’ query. However, chatbots should not be
seen as a way to provide engagement value. Therefore, resources should be strategically
allocated to the technologies that fit the managers overall customer outcome goal.

Limitations and future research

This research a number of limitations, each of which provides a platform for the
undertaking of future research both empirically and theoretically in this emerging
area. At a theoretical level, the foundation of consumer engagement lies within the
domain of relationship marketing and service-dominant (S-D logic). It is critical that
theoretical research integrates other relevant theories from other discipline. The
interaction between technology and consumers can be addressed by HCI theories
and/or consumer behavioral theories (e.g. consumer culture theory) which are impor-
tant in this emerging integrative perspective. This experimental study is based on
a relatively small sample, which comprises of 68 millennial consumers. While the
research offers initial insight into the nature of technology engagement as part of
a company’s marketing strategy, future research needs to incorporate studies exam-
ining different product categories and drawing from a larger group of consumers. The
role of technology engagement via different types of technology, the interactions
consumers receive are important areas warranting further research. These dyadic
aspects of engagement within specific business-to-consumers (B2 C) or business-to-
business (B2B) interactions merit further attention. The specific consumer experiences
between consumers and businesses, or other agencies also merit further scrutiny.

Disclosure Statement
No potential conflict of interest was reported by the author(s).

References
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision
Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T
Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and
recommended two-step approach. Psychological Bulletin, 103(3), 411. https://doi.org/10.1037/
0033-2909.103.3.411
 JOURNAL OF STRATEGIC MARKETING 13

Araujo, T. (2018). Living up to the chatbot hype: The influence of anthropomorphic design cues and
communicative agency framing on conversational agent and company perceptions. Computers in
Human Behavior, 85, 183–189.
Ayanso, A., Herath, T. C., & O’Brien, N. (2015). Understanding continuance intentions of physicians
with electronic medical records (EMR): An expectancy-confirmation perspective. Decision Support
Systems, 77, 112–122. https://doi.org/10.1016/j.dss.2015.06.003
Ayeh, J. K., Au, N., & Law, R. (2013). Predicting the intention to use consumer-generated media for
travel planning. Tourism Management, 35, 132–143.
Bagozzi, R. P., & Yi, Y. (2012). Specification, evaluation, and interpretation of structural equation
models. Journal of the Academy of Marketing Science, 40(1), 8–34.
Bettman, J. R. (1979). Memory factors in consumer choice: A review. The Journal of Marketing, 43(2),
37–53. https://doi.org/10.1177/002224297904300205
Brandtzaeg, P. B., & Følstad, A. (2017, November). Why people use chatbots. International conference
on internet science (pp. 377–392). Springer.
Caro, F., & Sadr, R. (2019). The Internet of Things (IoT) in retail: Bridging supply and demand. Business
Horizons, 62(1), 47–54. https://doi.org/10.1016/j.bushor.2018.08.002
Collier, J. E., Moore, R. S., Horky, A., & Moore, M. L. (2015). Why the little things matter: Exploring
situational influences on customers' self-service technology decisions. Journal of Business
Research, 68(3), 703–710.
Coniam, D. (2014). The linguistic accuracy of chatbots: Usability from an ESL perspective. Text & Talk,
34(5), 545–567.
Cook, D. P., Goh, C. H., & Chung, C. H. (1999). Service typologies: A state of the art survey.
Production and Operations Management, 8(3), 318–338. https://doi.org/10.1111/j.1937-5956.
1999.tb00311.x
Craig, A. B. Books24x7, I. (2013). Understanding augmented reality: Concepts and applications. Morgan
Kaufmann.
Cronin, J. J., Jr, Brady, M. K., & Hult, G. T. M. (2000). Assessing the effects of quality, value, and
customer satisfaction on consumer behavioral intentions in service environments. Journal of
Retailing, 76(2), 193–218. https://doi.org/10.1016/S0022-4359(00)00028-2
Dabholkar, P. A., & Bagozzi, R. P. (2002). An attitudinal model of technology-based self-service:
Moderating effects of consumer traits and situational factors. Journal of the Academy of Marketing
Science, 30(3), 184–201. https://doi.org/10.1177/0092070302303001
Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer technology:
A comparison of two theoretical models. Management Science, 35(8), 982–1003. https://doi.org/
10.1287/mnsc.35.8.982
De Ruyter, K., Wetzels, M., & Kleijnen, M. (2001). Customer adoption of e-service: An experimental
study. International Journal of Service Industry Management, 12(2), 184–207. https://doi.org/10.
1108/09564230110387542
Doshi-Velez, F. (2009). The infinite partially observable Markov decision process. In Advances in
neural information processing systems (pp. 477–485). Springer.
Eastlick, M. A., Ratto, C., Lotz, S. L., & Mishra, A. (2012). Exploring antecedents of attitude toward
co-producing a retail checkout service utilizing a self-service technology. The International Review
of Retail, Distribution and Consumer Research, 22(4), 337–364. https://doi.org/10.1080/09593969.
2012.690775
Faggella, D. (2018). How companies are using chatbots for marketing: Use cases and inspirations.
Communications of ACM. https://martechtoday.com/how-companies-are-chatbots-marketing
-209475
Ferrara, E., Varol, O., Davis, C., Menczer, F., & Flammini, A. (2016). The rise of social bots.
Communications of the ACM, 59(7), 96–104. https://doi.org/10.1145/2963119
Fließ, S., & Kleinaltenkamp, M. (2004). Blueprinting the service company: Managing service pro-
cesses efficiently. Journal of Business Research, 57(4), 392–404. https://doi.org/10.1016/S0148-
2963(02)00273-4
14 E. MORIUCHI ET AL.

Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and
measurement error: Algebra and statistics. Journal of Marketing Research, 18(3), 382–388. https://
doi.org/10.1177/002224378101800313
Hair, F., Jr, Sarstedt, J., Hopkins, M. L., & Kuppelwieser, G. (2014). Partial least squares structural
equation modeling (PLS-SEM) An emerging tool in business research. European Business Review,
26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing
Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/MTP1069-6679190202
Hair Jr, J. F., Babin, B. J., & Krey, N. (2017). Covariance-based structural equation modeling in the
Journal of Advertising: Review and recommendations. Journal of Advertising, 46(1), 163–177.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in
variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1),
115–135. https://doi.org/10.1007/s11747-014-0403-8
Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in
international marketing. In Advances in International Marketing|Adv. Int. Mark. (Vol. 20, pp. 277–
319). (Advances in International Marketing). Bingley: Emerald Publishing Limited. https://doi.org/
10.1108/S1474-7979(2009)0000020014
Huang, T. L., & Liao, S. (2015). A model of acceptance of augmented-reality interactive technology:
The moderating role of cognitive innovativeness. Electronic Commerce Research, 15(2), 269–295.
https://doi.org/10.1007/s10660-014-9163-2
José Sanzo, M., Belén Del Río, A., Iglesias, V., & Vázquez, R. (2003). Attitude and satisfaction in
a traditional food product. British Food Journal, 105(11), 771–790. https://doi.org/10.1108/
00070700310511807
Kaczorowska-Spychalska, D. (2019). How chatbots influence marketing. Management, 23(1), 251-
270. doi:10.2478/manment-2019-0015
Karami, A.-B., Jeanpierre, L., & Mouaddib, A.-I. (2010). Human-robot collaboration for a shared
mission. Proceeding of the 5th ACM/IEEE international conference on Human-robot interaction
(HRI’10) (pp. 155–156).
Kim, J., & Forsythe, S. (2008a). Adoption of virtual try-on technology for online apparel shopping.
Journal of Interactive Marketing, 22(2), 45–59.
Kim, J., & Forsythe, S. (2008b). Sensory enabling technology acceptance model (SE-TAM): A multiple-
group structural model comparison. Psychology & Marketing, 25(9), 901–922.
Krishnamurthy, V. (2016). Partially observed markov decision processes. Cambridge University Press.
Larivière, B., Bowen, D., Andreassen, T. W., Kunz, W., Sirianni, N. J., Voss, C., Wünderlich, N. V., & De
Keyser, A. (2017). Service Encounter 2.0”: An investigation into the roles of technology, employees
and customers. Journal of Business Research, 79, 238–246. https://doi.org/10.1016/j.jbusres.2017.
03.008
Lee, H. J. (2015). Consumer-to-store employee and consumer-to-self-service technology (SST) inter-
actions in a retail setting. International Journal of Retail & Distribution Management, 43(8),
676–692. https://doi.org/10.1108/IJRDM-04-2014-0049
Lis, B., & Horst, M. (2013). Electronic word of mouth impacts: A spotlight on customer integration.
Journal of Media Business Studies, 10(4), 41–62. https://doi.org/10.1080/16522354.2013.
11073571
Lovelock, C., & Wirtz, J. (2004). Services marketing: People. Technology, strategy. Singapore: World
Scientific Publishing.
McCarthy, J., & Wright, P. (2004). Technology as experience. The MIT Press.
Migge, B. H. (2013). Strategic decision making under uncertainty tailored to parallax correction and
energy production [Doctoral Thesis]. ETH Zurich https://doi.org/10.3929/ethz-a-009976669
Moriuchi, E., & Takahashi, I. (2018). An empirical investigation of the factors motivating Japanese
repeat consumers to review their shopping experiences. Journal of Business Research, 82,
381–390. https://doi.org/10.1016/j.jbusres.2017.07.024
Mugan, J. (2017). Chatbots: Theory and practice. https://www.linkedin.com/pulse/chatbots-theory-
practice-jonathan-mugan
 JOURNAL OF STRATEGIC MARKETING 15

O’Brien, H. L., & Toms, E. G. (2008). What is user engagement? A conceptual framework for defining
user engagement with technology. Journal of the Association for Information Science and
Technology, 59(6), 938–955. https://doi.org/10.1002/asi.20801
Ohta, Y., & Tamura, H. (2014). Mixed reality: Merging real and virtual worlds. Springer Publishing
Company, Incorporated.
Pask, G. (1980). Developments in conversation theory—Part 1. International Journal of Man-machine
Studies, 13(4), 357–411. https://doi.org/10.1016/S0020-7373(80)80002-2
Rosenthal, V. (2017). Forbes: Chatbot engagement: 6 tips and tricks for growth. https://www.forbes.
com/sites/vivianrosenthal/2017/07/07/chatbot-engagement-six-tips-and-tricks-for-growth/
#26edbce37673
Rust, R. T., & Oliver, R. W. (1994). The death of advertising. Journal of Advertising, 23(4), 71–77. https://
doi.org/10.1080/00913367.1943.10673460
Sivadas, E., & Baker-Prewitt, J. L. (2000). An examination of the relationship between service quality,
customer satisfaction, and store loyalty. International Journal of Retail & Distribution Management,
28(2), 73–82. https://doi.org/10.1108/09590550010315223
Sivaramakrishnan, S., Wan, F., & Tang, Z. (2007). Giving an “e-human touch” to e-tailing: The
moderating roles of static information quantity and consumption motive in the effectiveness
of an anthropomorphic information agent. Journal of Interactive Marketing, 21(1), 60–75. https://
doi.org/10.1002/dir.20075
Taylor, S. A., & Baker, T. L. (1994). An assessment of the relationship between service quality and
customer satisfaction in the formation of consumers’ purchase intentions. Journal of Retailing, 70
(2), 163–178. https://doi.org/10.1016/0022-4359(94)90013-2
Vyas, R. (2017). Why chatbots cannot be ignored for better customer engagement and marketing.
https://www.martechadvisor.com/articles/customer-experience-2/why-chatbots-cannot-be-
ignored-for-better-customer-engagement-marketing/
Waghmare, C. (2019). Business benefits of using chatbots. In Introducing Azure Bot service (pp.
147–165). Apress.
Wakefield, K. L., & Blodgett, J. (2016). Retrospective: The importance of servicescapes in leisure
service settings. Journal of Services Marketing, 30(7), 686–691. Emerald Insight. https://doi.org/10.
1108/JSM-08-2016-0291
Williams, J. D., & Young, S. (2007). Partially observable Markov decision processes for spoken dialog
systems. Computer Speech & Language, 21(2), 393–422. https://doi.org/10.1016/j.csl.2006.06.008
Wong, K. K. K. (2013). Partial least squares structural equation modeling (PLS-SEM) techniques using
SmartPLS. Marketing Bulletin, 24(1), 1–32.