School of Business and Economics

21BSP319 – Business Administration Project and Research Methods

A Study on Virtual Reality's influence on customer engagement while shopping

Project Guide – Ofer Dekel Dachs

Student ID- F113847

Word count - 12500

Table of Contents

Acknowledgement........................................................................................................ 3
Abstract ......................................................................................................................... 4
1. Introduction ........................................................................................................... 5
2. Literature review ................................................................................................... 7
2.1 Virtual Reality and shopping ........................................................................................ 7
2.2 V commerce and E commerce ..................................................................................... 9
2.3 Virtual Reality and Technology .................................................................................. 10
2.4 Consumer experience and VR technology ............................................................... 11
2.5 The changing retail environment in light of VR integration ................................... 13
2.6 Theories ........................................................................................................................ 17
2.7 SOR MODEL ................................................................................................................. 17
3. Methodology ........................................................................................................ 18
3.1 Ethics and Validity ....................................................................................................... 19
3.2 SOR MODEL ................................................................................................................. 20
3.3 Devices used in the studies ....................................................................................... 20
3.4 Products used in the literature .................................................................................. 21
3.5 Environments used ..................................................................................................... 21
3.6 External Stimulus ........................................................................................................ 22
3.7 Psychological factors ................................................................................................. 22
3.8 Behavioural Factors .................................................................................................... 22
4. Findings ............................................................................................................... 23
4.1 Q How various VR technologies have been applied so far in the context of
shopping? ........................................................................................................................... 23
4.2 Q How can VR improve the shopping experience? ........................................... 30
4.3 Q What sort of shopping experience can VR provide in comparison to other
retail venues? ..................................................................................................................... 33
5. Discussion ........................................................................................................... 35
5.1 Drawbacks .................................................................................................................... 37
5.2 Shop Design ........................................................................................................... 38
Conclusion .................................................................................................................. 42
Reference list .............................................................................................................. 43
Acknowledgement

First and foremost, I want to thank my family and God the Almighty from the bottom
of my heart. Because of my confidence in them, I have been abundantly blessed by
their grace, and as a consequence, I have been able to successfully finish this study.
I also want to thank them for being there for me through good times and bad, offering
me emotional support when I needed it and not just when they felt like it.
Throughout my time at Loughborough University, this degree and project have been
the most challenging academically. However, I was able to finish my education to the
best of my abilities thanks to the constant support of my family and friends. I am
appreciative of their ongoing encouragement and motivation to see my goals
through. I also want to express my gratitude to Professor Ofer, who has functioned
as both my supervisor and mentor for my research during my master's thesis. As I
worked to finish this project, Ofer was a steady source of support and advice. His
unfailing confidence in my abilities has motivated me to complete my job to the
highest calibre possible. Additionally, I want to extend my sincere appreciation to all
of my classmates from the Loughborough MBA class of 2022. They had offered me
continual support while I worked on my job.
Abstract
E-commerce and brick-and-mortar businesses both now have the ability, thanks to
the development of virtual reality, to circumvent their respective restrictions by
adopting the characteristics of one another via the medium of the virtual world. Now,
e-commerce may give store-like features such as physical presence, touch, and an
atmosphere that is similar to the real world, while physical retailers can build virtual
stores so that they can be accessed from anywhere in the world. The research takes
note of these recent developments and investigates the latest applications and
utilizations of virtual reality in an effort to address the question of how VR may
improve consumer engagement in the retail sector. The research provides a full
grasp of Virtual Reality in the retail sector by reviewing the existing literature and
providing an overview of its condition today. Under this heading, it provides answers
to topics such as "How different VR technologies have been utilised so far in the
context of shopping," and "What kind of shopping experience can VR deliver in
compared to traditional retail venues?" "How can VR enhance the shopping
experience?"
1. Introduction

Ivan Sutherland, around the middle of the 1960s, published a pivotal manuscript in
which he attempted to describe virtual reality as a window through which a user
perceives the virtual world as if it looked, felt, and sounded real and in which the user
could act realistically. This is where the concept of virtual reality (VR) can be traced
back to (Packer and Jordan, 2002)

Since that time, and in accordance with the application area, several definitions have
been formulated: for instance, Bowman and McMahan defined virtual reality as a
virtual environment that immerses users to the extent that they have the feeling of
"being there" (Bowman and McMahan, 2007); Bishop and Fuchs defined virtual
reality as "real-time interactive graphics with 3D models, combined with a display
technology that gives the user the immersion in the model world and direct
manipulation" (Bishop and Fuchs, 1992).

Although these definitions are distinct from one another, they emphasise three
characteristics that are shared by virtual reality (VR) systems: immersion, the feeling
of being present in an area, and the ability to interact with that world. To be more
specific, immersion refers to the number of senses that are aroused, the interactions
that take place, and the degree to which reality resembles the stimuli that are utilised
to mimic worlds. This characteristic may be affected by the characteristics of the
technological system that is employed to shield the user from the outside world
(Slater, 2009).

The virtual reality (VR) market has been expanding in tandem with the fast
development of the underlying technology. It is anticipated that the size of its
worldwide market would expand from 7.3 billion US dollars in 2018 to 120.5 billion
US dollars in 2026. (Fortune Business Insights, 2019). At this point in time, in the
middle of the year 2022, virtual reality (VR) is recognised as one of the technological
megatrends that is advancing the digitalization of all aspects of human existence
(Koivistoa and Hamaria, 2019). To this day, virtual reality technology is being used in
a variety of contexts, including those of the entertainment and advertising industries,
the construction industry, product design and presentation, and the tourist industry
(Stapleton, 2002). It is generally agreed that shopping and retail are two of the most
potential application areas for VR in the context of a corporate setting (Cowan and
Ketron, 2019). According to Ben-Ur 2017, the trend in mainstream commerce has
been moving away from conventional shopping channels and toward virtual reality.
Virtual worlds (such as Buzz 3d retail; astra fit and diakse) have also been taking use
of the conventional restrictions of the setting of brick-and-mortar stores by giving
endless options of items combined with a variety of effective recommendation
algorithms. When compared to traditional stores with brick-and-mortar locations,
online retailers obviously have access to a greater variety of products and do not
have the same restrictions on shelf space. Similarly, as the expectations of
consumers on online shopping platforms have been raised currently due to the
emergence of diverse digital shopping channels such as virtual reality (VR),
augmented reality (AR), and mobile technologies (MT), these platforms are more
focused on enriching the consumers' hedonic shopping experiences (Ben-Ur, Mai,
and Yang, 2015). This is in contrast to the following traditional consumers' attributes,
namely convenience and discount prices that online shopping can provide. Even if
the objective is to provide consumers with a shopping experience that is consistent
across numerous channels, the most important thing is to discover the most effective
strategy to mix in-store and online shopping in order to provide an integrated and
engaging retail environment. (Braze, n.d.)

This research aims at advancing the understanding of how VR can enhance

customer engagement in the retail segment. The major objectives would be to
Review the current state of literature to provide a comprehensive understanding of
Virtual Reality in the retail segment. Under this, we would answer certain questions
such as “How various VR technologies have been applied so far in the context of
shopping” and “What sort of shopping experience can VR provide in comparison to
other retail venues?” “How can VR improve the shopping experience”
2. Literature review

Literature reviews focus on a topic and provide theoretical material for pertinent
research, addressing the current level of knowledge in a certain area, providing
research findings, and defining future research (Fink, 2019). The literature review is
a technique that includes gathering data, doing descriptive analysis, establishing
categories, and evaluating materials in order to discover themes, topics, and issues
in the literature.

2.1 Virtual Reality and shopping

In the most recent decades, the term "virtual reality" has been used in a wide sense
to refer to the internet as a whole, the virtual world, 3D interfaces, and 360-degree
stereoscopic video. This use of the term has become more common. Virtual reality
(VR) is sometimes referred to as immersion technology or presence-inducing
technology. This is because VR makes use of large displays (Zikic, 2007) or head-
mounted displays (Pizzi, Vannucci, and Aiello, 2019), both of which can deliver an
immersive sensory experience in real-time (Flavián et al., 2019). Important virtual
reality technology such as the VR headset and the Cave Automatic Virtual
Environment (CAVE) are examples of this
As a result of the recent surge in virtual reality (VR) technologies, stereoscopic head-
mounted display devices have made great strides in the affordance of feeling "being
there" (Pieraski & Strykowski, 2017). In these devices, a different visual feed is
outputted to each eye in order to create a three-dimensional experience
(Greenbaum, 1992, Krueger, 1991, Steuer, 1992). As a result, the potential
reasonable and inappropriate expectations associated with virtual reality are
especially pertinent to this "immersive" human-computer interaction mode. This
mode enables users to feel an immersive sense of "being there" from any location,
and as a result, the potential reasonable and inappropriate expectations associated
with virtual reality are particularly relevant.
Interactive technologies for virtual reality (VR) provide users the ability to control and
direct their activities inside a purely three-dimensional artificial environment, giving
them the impression that they are really there in this made-up location (de Regt and
Barnes, 2019, Satava, 1993, Suh and Prophet, 2018). Interactivity, three-
dimensionality, and the ability to act and respond in real time are the defining
characteristics of virtual reality as a medium (Whyte, 2002). Because of this, virtual
reality provides the opportunity to induce a state of deep engagement with the virtual
environment (Sherman & Craig, 2002). This makes interactions between users and
the virtual environment more intuitive and natural, and it may accelerate the initial
learning and acclimatisation processes that take place within simulated
environments (Schnack et al., 2019). Similar associations are now being made
between these affordances and the rising popularity of VR-based purchasing, which
changes the way customers perceive and evaluate products and services. This is
because VR-based purchasing allows customers to interact more closely with the
product or service they are purchasing (Papagiannidis, 2017). The sensory
embodied modalities (e.g., visual, auditory, and physical movement) serve as the
foundation of consumer virtual reality (Harley, 2018) and help to mimic a realistic
shopping experience in an interactive and immersive virtual reality
environment. (Suh & Prophet, 2018).

Virtual technology, not virtual reality technology, is used in the early stages of virtual
reality, which mostly include less immersive forms of the technology. The non-
immersive virtual environment allows users to interact simply with conventional input
devices like their mouse and keyboard. Virtual information is shown on a standard-
sized computer screen or monitor in this environment (Suh and Prophet, 2018, Zeng
and Richardson, 2016). Previous studies have simply linked virtual reality (VR)
shopping with a virtual visualisation display or web 3D technology for online retailers
(Wang and Datta, 2010). The shopping experience is, in general, the result of
interactions between a person and an item that take place in a particular setting or
retail environment (such as an online or physical store, shop, shopping mall,
supermarket, or shopping platform) and over the course of a specific amount of time
(Arnould & Thomson, 2005). Consumers have a tough time physically and mentally
immersing themselves in a virtual retail environment since the usual desktop-based
virtual reality technology can only offer a small portion of the field of view. This
makes it difficult for customers to make purchases (FOV). Because of the constraints
imposed by technologies and pieces of equipment, it is evident that a select few
studies have made use of a greater number of displays or monitors in order to
simulate an immersive shopping experience by expanding the visual field
(Altarteer,2016). As a result, content relating to the early stages of VR technology
that did not address the provision of an immersive experience in the virtual retail
environment.

Despite the fact that the discussion and conception of virtual reality are primarily
focused on visual output and display technology, the VR user experience frequently
includes other modalities, such as haptic devices, motion controllers, sound devices,
and so on. This is the case even though these other modalities coexist in the VR
user experience. Vision alone is not always enough to provide a richer virtual reality
experience. Furthermore, as will become apparent in this review, despite the fact
that virtual reality technology in contemporary discussions is primarily anchored in
visual technologies, logically and conceptually, virtual reality technology is and
should be agnostic of and unrestricted by any single human sense.

2.2 V commerce and E commerce

E-commerce is a web interface that allows customers to connect with the brand's
world. In addition, e-commerce reveals a variety of product characteristics that serve
as signals for the buyer. A v-commerce system incorporates a virtual world and
immersive interactions to enhance the e-commerce module. The virtual environment
is an environment that faithfully recreates an artificial or real (using panoramic
photos) world that encompasses the user's field of vision and in which the user may
interact freely. The virtual environment is comprised of many scenarios that
correspond to distinct areas of a VR store that a customer may tour.
In contrast to conventional e-commerce websites, where the sequence of the
displayed goods is determined by web designers, the user is engaged in a 360°
environment that must be constructed to synchronise the consumer's heading to
transmit the brand perception. For this purpose, the virtual environment employs
behavioural software assistance (BSA) features, which support the user in navigating
and interacting with the virtual world (Richir, 2015) The user may browse and interact
with the virtual world via the device's inherent interaction methods (mouse for
computers, touches for tactile interfaces) or in an immersive mode (using a head-
mounted display).
2.3 Virtual Reality and Technology
With the use of virtual technologies, such as the internet and mobile platforms, and
other stereoscopic technologies, customers' shopping habits have evolved
considerably over the previous few decades. In addition to brick-and-mortar stores,
consumers are able to shop on the Internet. Virtual technologies have become a
significant marketing platform for expanding company potential in all industries.
Increasing numbers of conventional organisations are embracing multi-channel
strategies for retailing (Müller-Lankenau and Wehmeyer, 2005) and using virtual
technology as a channel to assist or improve their marketing and sales operations.
When compared to conventional brick-and-mortar shopping channels, information
availability and content are seen as two of the most significant advantages of internet
shopping (Kim,2006). There is evidence that window shopping and researching
products and services are important in all types of virtual activities (e.g., McKone,
2016; Kimiloglu,2004). Current Web-based online purchasing procedures may not
fully meet the expectations of customers, particularly in clothes commerce. When
buying on virtual platforms, consumers want information on price, size, colour,
texture, and even fashion trends. Additionally, purchasing for stylish items is a
means for customers to express their desired lifestyles. Constantly, lifestyles are
shown as the methods in which individuals spend their time and money, expressing
their activities, attitudes, and passions (Blackwell, 2001). However, shopping on the
Internet differs from traditional purchasing at brick-and-mortar stores. Most present
shopping websites give users with an efficient means of information search rather
than a hedonistic purchasing experience. Due to the technological limitations of
present Web-based purchasing systems, the aforementioned quality of information
may not be available to customers. Therefore, it is necessary to search for
alternative virtual technologies that might "simulate" the actual shopping experiences
of customers. In this instance, the implementation of Virtual reality technology and
related technologies in commerce may be a creative approach, bringing customers
into a whole new purchasing environment with a feeling of immersion and hedonistic
sensations.
2.4 Consumer experience and VR technology
According to the findings of Na and Weihua,(2012), several contemporary corporate
organisations are able to thrive in today's more cutthroat business environment with
the assistance of virtual reality (VR) technology. According to Fox,(2009), virtual
reality is seen to have a practical application that may fulfil the requirements and
demands of certain customers while also improving their overall experience.
According to Meyer and Schwager,(2007), the quality of the customer service, the
simplicity with which a product may be used, the convenience of the product's
packaging, and advertising methods all contribute to the overall consumer
experience. It is possible to categorise it according to the following five
interconnected dimensions: (1) the sensory, (2) the emotive, (3) the intellectual, (4)
the behavioural, and (5) the social (Schimtt, 2011). These aspects were responsible
for the birth of the idea of customer empowerment, which came about as a result of
an increase in consumer involvement with the company and the formation of a
connection between the two organisations (Hoyer et al., 2010, Libai et al., 2010).
Following a transaction, a consumer's degree of contentment, trust, and dedication
to a brand are all factors that contribute to their overall customer experience (Lemon
and Verhoef, 2016). This is accomplished by using a variety of online and physical
contact points, each of which provides a unique client experience at a certain
moment of the consumer journey (Kumar, 2016). Contact points may be either
customer- or company-initiated, as pointed out by Kumar et al. (2016). An example
of a customer-initiated touch point would be reviewing online reviews of a certain
restaurant (such as content or promotions available online or on websites).
Accordingly, experiences are looked at from two distinct points of view: the point of
view of the customers (Prahalad and Ramaswamy, 2003, Chandler and Lush, 2015,
De Keyser et al.,2015), and the point of view of the company (Prahalad and
Ramaswamy, 2003, Chandler and Lush, 2015).
Companies began using virtual reality (VR) technology into their successful
marketing tactics in order to enhance the customer experience. This was done
based on their knowledge of how customers spend their time and the devices that
they use (Stone and Woodcock, 2014). In point of fact, technology has always been
at the forefront of the most innovative and creative thinking to improve the overall
experience of the client. Throughout the years, beginning with tales and robots,
holograms, and other similar topics, the human mind has comprehended the notion
of coupling reality with the virtual and has, in many instances, felt the need to do so
in order to fulfil certain requirements (Chen and Sun, 2012).
The use of virtual reality (VR) in marketing campaigns has the potential to improve
customers' experiences as a whole and their loyalty to a brand, which in turn will
boost revenue for such brands (Riva, 2007). Over the course of the last ten years,
there has been a flood of reports about successful implementations of this
technology by various businesses. For instance, Mercedes marketed their SL model
with a virtual drive on California's Pacific Coast Highway. This enabled visitors to
learn about the new design in an engaging and dynamic manner (Gaudiosi, 2016).
Oreo's new cupcake-flavored cookies were promoted using virtual reality
advertisements that took users on a journey through a fantastic dream country
replete with Milk Rivers and chocolate canyons (Smiley, 2016). Innovative
companies in a variety of fields, like Volvo, Qantas, Adidas, Sherry FitzGerald Estate
agency, and Topshop, have made substantial use of HMDs in their day-to-day
operations. When Volvo originally introduced the XC90 SUV in 2014, the brand
aimed it squarely at younger consumers who were looking to purchase a premium
vehicle for the first time. To achieve this goal, Volvo introduced a test-drive VR
experience that makes use of a head-mounted display (HMD). The results were
remarkable, as sales skyrocketed by a factor of 412 percent compared to the
previous year's total number of copies sold (Gajsek, 2017). In a similar vein, Qantas
Airlines introduced a new entertainment offering in 2016 that made use of
Samsung's Gear VR. The service provided premium passengers in First Lounges at
Sydney and Melbourne airports, as well as in First Class cabins on select A380
services from Australia to Los Angeles, with a one-of-a-kind experience that
immersed customers in a virtual world. These services were available on select
A380 services between Australia and Los Angeles. The hotspots of network
locations, the most recent items from Qantas, and the blockbuster movies that were
playing in-flight were all shown on the HMD gadget (Qantas, 2016). The realm of real
estate is another one that has found applications for virtual reality. Indeed, Sherry
FitzGerald, Ireland's biggest company of estate agents, gave its prospective
customers with a virtual stroll around yet unbuilt residences by using Samsung Gear
VR headsets. This made the process of house seeking simpler and more expedient
(Buttons, 2016). In a similar vein, Adidas, a retail sportswear company, introduced a
virtual reality (VR) experience for its clients in 2017 that allowed them to accompany
climbers during their journey. By using such an immersive technology, Adidas was
able to recreate the sensations of participating in outdoor activities and deliver more
detailed information on the Adidas TERREX product line (Takle, 2017). As a strategy
to advertise their brand and newest products, the clothing company Topshop
provided a one-of-a-kind chance for its consumers to experience a Topshop catwalk
show via the use of HMDs. This was done in an effort to attract new customers.
Additionally, in 2017, Topshop engaged its customers with the use of Oculus Rift
headsets: riders waterslided down a 3D representation of the genuine Oxford Street
in London into the actual store in order to commemorate the beginning of the
summer season (Melnick, 2017).
The capacity of consumers to adapt to new technologies has grown, and the fact that
these technologies can now link to a variety of platforms has drawn customers even
more (Meyer and Schwager, 2007). The development of virtual reality technology is
opening the way for a significant revolution in the retail industry, while also improving
logistics, corporate administration, and the overall consumer experience (Laria and
Pantano, 2011). Virtual reality (VR) offers businesses cutting-edge tools to transform
the shopping experience of their customers by including them in more immersive
content (Lau and Lee, 2015).

2.5 The changing retail environment in light of VR integration

The literature in the area of retailing demonstrates the growing relevance of web-
based media and e-commerce channels for retail shopping (Liu and Forsythe, 2011).
This trend is often matched by a severe decline in interest for physical shops.
[Citation needed] [Liu and Forsythe, 2011] (Hsiao, 2009). Because of the increased
demand for web-based online retailers, traditional distribution channels have been
driven to adopt innovative practices. Physical retailers are increasingly testing the
potentials of integrating virtual reality (VR) into the shopping journey in order to
maintain their current market share and seize new opportunities. This is done in
order for physical retailers to keep up with the rapid pace of technological
advancements (Bonetti, 2018).
In today's world, there is an urgent need for point-of-sale settings to make use of
virtual reality (VR) technology in order to distribute a wider variety of helpful
information and, as a result, to make the decision-making process easier to use
(Kowatsch and Maass, 2010). The emergence of creative channels that are rich in
interactive three-dimensional visuals, graphic icons, and linkages is made possible
by technologies for virtual reality (VR) (Crawford, 2016). In addition to this, they
provide a safe refuge for engagements and exchanges between humans and
computers (Lee and Chung, 2008). These cutting-edge digital channels introduce
fundamental features that facilitate (a) immersion, which is the sensation of being
encircled by a digital environment; (b) presence, which is the sensation of existing in
a virtual landscape; and (c) interactivity, which enables users to virtually interact with
objects and surroundings in real-time (Lee and Chung, 2008).
In virtual settings, ambience, mood, and shop layout are important factors in the
same way that they are in real situations (Vrechopoulos, 2004). Direct attempts to
drive purchase are made by immersing consumers in a visually attractive dimension
as part of the customer re-enchantment process and the redesign of the retail
experience (Suddaby, 2017). There are a lot of different meanings associated with
re-enchantment, but the most important one is that people feel the need to find new
methods to promote their products (Puccinelli, 2009). The environment, which
cannot be recreated anywhere else, is the most significant point of appeal since
people feel the desire to face different everyday tales. This is because the
atmosphere cannot be replicated. The goal of this endeavour is to establish a
contradiction between the actual world and the digital realm. This may be
accomplished by escorting the client through each stage of their visit, beginning with
reception and continuing all the way to withdrawal (Burke, 2002). For instance, a
travel firm may offer its clients the opportunity to take virtual short journeys to a
variety of locations in order to make it easier for those travellers to make a
purchasing choice. Not only would this assist the consumers in making their
selection, but it would also foster increased loyalty and confidence in the brand (Kim,
2004). The usage of VR will have the effect of further reducing the "patience" factor,
decreasing the distance that separates customers and shops, and in certain
circumstances completely doing away with the need for customers to visit a real
store (Lou, 2017).
The use of virtual reality has expanded its scope and had an influence on the realm
of online shopping and e-commerce, bringing reality and virtuality closer together
(Kock, 2008). Not only has this practise produced a new dimension, but it has also
made it possible for better navigation to take place, stunning graphics and artworks
to be displayed in new ways, and out-of-the-box visual merchandizing to be
implemented, which has resulted in increased levels of customer satisfaction (Wang
et. al, 2011).
A significant number of today's retailers operate under the premise that virtual appeal
is positively related to enhanced consumer perceptions and satisfaction, and as a
result, they are concentrating their efforts on developing and distributing tools that
are both innovative and entertaining, with the goal of creating an online store that is
ever more effective (Pantano and Naccarato, 2010, Laria and Pantano, 2011,
Pantano et al., 2018). The heightened emphasis on visual and aesthetic charms as
opposed to the items themselves is unavoidably obvious (Pantano and Corvello,
2010).
Alibaba, a significant e-commerce website that has more than 300 million members,
is regarded as the pioneer in the world of retail that largely depends on virtual reality
technology. Alibaba was established in China in 1999 with the belief that the internet
would provide small businesses with the opportunity to make use of technology in
order to grow and compete more effectively on both the local and international fronts
(Stone and D'Onfro, 2014). Alibaba was founded on this premise. It debuted its
usage of VR as part of the celebration of China's Singles' Day with the goal of
increasing the enthusiasm of individuals on that day and, as a result, boosting sales
(Xu, 2017). Even if customers of Ali Baba's VR can get a feel for the store online,
they still can't compare to the exhilarating experience of shopping in person, which
may have an impact on the decisions they make.
Companies who want to do all of their business online should keep in mind that the
physical location of customers throughout the decision-making process is very
important to the success of their ventures (Quidt, 2016). The customer or shopper's
journey may be broken down into three stages: (a) contemplate (which is motivated
by a stimulus), (b) evaluate/engage (which involves comparing the many options
available in-store with those available in other shops), and (c) buy (Bousaleh and
Mathew, 2011). According to Edelman (2010), this trip, which typically begins with an
awareness stage, is then followed by pleasure and link building, which are likely to
lead to loyalty in the long term. During each phase, customers and shoppers are
impacted by a distinct set of signals, and the majority of advertising is geared toward
the "consider" and "purchase" phases, despite the fact that the "evaluate" phase
might make the most difference if the items' display is appealing (Edelman, 2010).
Businesses consistently work toward the goal of optimising the total sales value
equation, which consists of the following three primary components: (1) Penetration,
which is the number of people who enter the shop multiplied by the percentage of
people who buy from a particular category; (2) Frequency, which is the number of
times a shopper buys the same product; and (3) Weight, which is the amount of
money a shopper spends for each transaction that is performed in the same shop
(Ramadan and Farah, 2017).

Virtual reality and customer engagement are not new study issues and have been
extensively studied over the last two decades; nonetheless, owing to the rising rivalry
amongst e-commerce platforms, there has been a need to advance knowledge in
this specific area. In addition, despite the fact that the majority of large companies
have established their virtual platforms, they still lack outstanding in-store
experience. Therefore, the study aim is:

Advancing the understanding of how VR can enhance customer engagement in the

retail segment.

To achieve this, the study will review the current state of literature to provide a
comprehensive understanding of Virtual Reality in the retail segment and will try to
answer the following questions.

Q How various VR technologies have been applied so far in the context of shopping?

Q How can VR improve the shopping experience?

Q What sort of shopping experience can VR provide in comparison to other retail

venues?
In addition, fifty per cent of the papers assert that there are still substantial
knowledge gaps concerning VR retail design. We will try to find the most effective
shop layout based on this study.

2.6 Theories
The previous study has made use of many important theories and research
frameworks that are relevant to the process of acquiring virtual reality experiences.
Even though none of these are used in this particular study, these theories are
essential for connecting the disparate points in the understanding of virtual reality
and have been used in previous literature to connect the findings. Even though none
of these are used in this study, these theories are essential for connecting the
disparate points in the understanding of virtual reality. These ideas have been very
necessary in demonstrating the advantages that virtual reality may provide. A
number of theoretical frameworks, such as affective evaluation theory, presence
theory, flow theory, self-persuasion theory, uses and satisfaction theory, and
expectation-confirmation theory, have been adapted for usage in the realm of virtual
reality in a number of pieces of academic writing. In order to explain the
cybersickness that may be caused by virtual reality, many different explanations
have been proposed, including those based on the concepts of sensory conflict,
postural instability, and poison (see e.g., Israel et al., 2019). In addition, certain
studies developed hypotheses based on pre-existing theoretical frameworks such as
the stimulus-organism-response (S-O-R) model, the theory of reasoned action (TRA)
model, the technology acceptance model (TAM) model, the unified theory of
acceptance and use of technology (UTAUT) model, and the perceived shopping
value model.

2.7 SOR MODEL

S-O-R symbolises Stimulus, Organism, Response. This psychological theory states
that the stimulus is the impulse that includes the statement. Organism, which refers
to a person, and responses are the consequences, reactions, and replies. This idea
states that a message presented to a person should satisfy his or her material and
non-material demands. The desired material consists of clothes, food, and shelter.
While the non-material comprises a feeling of security, the desire to be
acknowledged and valued, and a need for recognition (Gao& Bai, 2014).
The SOR hypothesis in psychology contributes significantly to our understanding of
the causes of a person's behaviour. It is consequently very significant for addressing
problems connected to human behaviour, and it is essential for comprehending
human behaviour in virtual reality. The majority of our conduct is a result of external
cues impacting our emotions. If we want to examine a person's buying behaviour, we
must comprehend how diverse inputs in the virtual world might alter their mental
state.

3. Methodology

This research will use secondary data analysis and will focus mostly on qualitative
data. Secondary analysis of qualitative data is the use of existing data to obtain
answers to other research questions than those posed in the initial study (Hinds,
1997). Authors have utilised secondary analysis to data when they want to: explore
interests separate from the initial study (Hinds, 1997); bring a fresh viewpoint or
conceptual emphasis to the original research question. the primary reason for
depending on secondary analysis is that virtual reality shopping platforms are not
widely accessible to consumers as it requires a Head-mounted controller (HMD) and
haptic devices to access the virtual stores. Additionally, given the brief duration, it is
more practical and accessible. However, we have access to datasets from previous
study that we may utilise for our own research.

This study seeks to uncover academic literature on virtual reality and retail studies.
For this investigation, secondary data sources were investigated for pertinent
information. Academic databases, search words, and filters were described in a
sample approach at the beginning of the research. A basic literature review on virtual
reality and retail was conducted as the first stage. This requires a search of
academic publications using the keywords "virtual reality" and "retail," "virtual reality"
and "shopping," "virtual reality" and "e-commerce," "virtual reality" and "marketing,"
"virtual world" and "customer interaction," and "virtual reality" and "consumer
experience." To reduce the influence of database bias, three databases, British
Index, Google Scholar, and Scopus, were selected based on their popularity in the
academic research community.

To represent the current status of VR/AR research, the literature study focused on
articles published after 2016 mainly. Thus, 70% of the articles were from 2013 and
after.

Forward snowball sampling, in accordance with recognised Literature Review

standards, was used to locate more advanced literature than our anticipated
protocol-driven search technique would permit (Jalali & Wohlin, 2012; Kitchenham &
Charters, 2007). This method extracted essential articles on virtual reality from the
reference lists of prominent papers, exposing influential and pertinent material for the
literature review.

From August 15 to September 15, 41 noteworthy journal articles were gathered. The
search phrases were input into Google Scholar and filtered using the aforementioned
criteria. Select publications of high quality that do literature reviews, starting with the
most recent studies and working backwards. Relevant PDF documents have been
downloaded. During the journal research, significant referenced publications were
located, retrieved, evaluated, and then downloaded. When the snowball sampling
path ceased to provide results, the following search phrase was analysed in the
same manner. The search phrases were then placed into other search engines to
discover every relevant article. To maintain currency throughout the analytic process,
continue to research pertinent material. Throughout the resource gathering phase,
only academic materials (journal articles, conference papers, magazines, and
academic books) were authorised. This was done to guarantee that the publication's
emphasis remained scholarly and scientifically grounded.

After gathering all pertinent academic material, it would be thoroughly evaluated and
categorised in accordance with the research questions. The research results would
then be confirmed and linked with the hypotheses to get a conclusion.

3.1 Ethics and Validity

The legitimacy and reliability of the data become crucial while developing a solid
research study. The integrity of the data is vital to the overall validity of the study.
Other scholars will be able to use the study if the data given are reliable and well-
presented. Consequently, the researcher has six alternatives for bolstering the
validity of the study's conclusions. These include bias on the side of the researcher,
the use of a communitarian or participatory research technique, peer review,
triangulation, member participant checks, and long-term perspective. (Silverman et,
2013).
This study employs triangulation, peer review, and researcher bias to assure the
validity and reliability of its results. Triangulation is the collection of information and
data from many sources. Throughout the investigation, several sources have been
contacted to confirm the credibility of the material provided. In addition, two
colleagues were asked to evaluate the overall findings of the study, and both agreed
with its conclusions. In order to strengthen the validity of the findings, every effort
has also been made to decrease the researcher's bias at every stage of the study.
(Silverman et al., 2016)

3.2 SOR MODEL

The S-O-R theory has been used extensively to show that the outward cues (stimuli)
of a shop have an effect on consumers' cognitive reactions and emotional states
(organism), which in turn influence the outcomes (responses) of their purchase
behaviour (Chang, 2011)

3.3 Devices used in the studies

Monitor, Projector, CAVE, and Head-Mounted Display (HMD) are the four most
prevalent VR system types in the present literature. Nevertheless, the usage of
HMD(Head-mounted Displays) has expanded in recent years. The majority of the
evaluated material focused on HMD. Other information, including auditory, tactile,
and olfactory stimuli, was delivered by additional devices. The research have not
clearly indicated what level of immersion constitutes virtual reality.

HTC Vive, Smartphone-based, and oculus rift HMD were used. Large screen
Powerball, two projectors with polarised glasses, and one wall display of CAVE were
the projectors utilised. There were three large displays and four walls in the CAVE,
and the monitors were TFT LCD and 3D monitors.
To provide customers with a more realistic VR experience, there is a great need for
multimodal input devices that enable them to interact with the many items in the VR
world. These input devices vary from a basic mouse to a neural connection. Input
devices may vary from those controlled by hands, legs, and eyes to those controlled
by general body motions. In the majority of research (40%) VR controllers that are
included with the HMD bundle are used. Some studies have also used gloves and
hand trackers, which offer more precise monitoring of finger movements such as
gripping, holding, and turning goods. In a few research, buying choices were made
using mobile devices.

VR controller, mouse and keyboard, Gamepad, Hand movement tracking jump

motion, touchscreen phone, and shopping cart handlebar were examples of hand
movement input devices. The input devices for eye movement were head tracking
and eye tracking. Cameras, sensors, and other tracking equipment were used to
capture general body motion. The leg motions were monitored by a foot pressure
sensor. Speakers recorded speech input..

3.4 Products used in the literature

In 35% of the publications, food was often picked as a buying item. In addition to
food (van Herpen,2016), apparel, alcohol and drinks such as beer and wine (Bigné,
2016, Martnez-Navarro,2019) were utilised to study consumer psychology and
behaviour. In addition, things such as stationery, luxury bags, electronics, and
automobile components have been examined in several of the research..

3.5 Environments used

A variety of simulated environments were used such as retail stores (Bramley et al.
(2018)) supermarkets (Bigné, 2016, Ketelaar, 2018), Product shelves (Arce-Lopera,
2018), shopping malls (Liang et al., 2019, Shuai, 2018), shopping platform (Huang et
al., 2019), (Elboudali, 2020), food court (Allman-Farinelli, 2019), (Nordbo, 2015) and
unexpected places like dressing room (Donatiello, 2018) and apartment ( Speicher,
2018 ).
3.6 External Stimulus
There are a total of six types of variables that were explored extensively in the
investigations. Product-, System-, and technology-related stimuli are the most
prevalent in the VR setting. Product-related criteria include Product content (2D or
3D), Product Type (stationary or beer), and Product Information including product
marketing or packaging information. There was discussion of technological elements
such as display technologies and interaction technologies. In studies on interactive
technologies, the use of various input devices and how they might enhance the
shopping experience are discussed. Input devices include a gamepad, a wand of
magic, and a human joystick. It is discovered that the magic wand increases
shopping efficiency. Also taken into account were shopper-related criteria such as
shopper type, motivation, gender, etc. In-store variables include In-store information,
auditory stimulus, store layout, and the virtual shopping cart. Social aspects such as
sales support and agent collaboration, for example.

3.7 Psychological factors

Affection, cognition, attitude and judgement, immersion, and usability are the
organism-related psychological components of virtual reality purchasing. Affection
may be subdivided further into pleasure, emotional arousal, and hedonic
(Dzardanova, 2017). Immersion is composed of novelty, realism, felt presence, and
physical ownership (Liu and Uang, 2011). Cognition may be categorised as
perceived value, advantages, and overall experience, memory recall, information
processing, familiarity, and felt intrusiveness (Pfeiffer et al., 2017). Usability is
subdivided further into price marketing, perceived usability, comfort, cybersickness,
and perceived ease of use (Lombart, 2020). Attitude and evaluation may be
subdivided further into product preference, customer satisfaction, assessment of the
point of sale, and perceived usability. (Morotti, 2020,)

3.8 Behavioural Factors

Behavioral characteristics such as time spent, purchase intent, purchase decision,
task performance, information search, brand preference, general purchasing
behaviour, money spent, legacy bias, and word of mouth were used.
4. Findings

4.1 Q How various VR technologies have been applied so far in the context of
shopping?
VR is well-received by customers because to their novelty (Yim, Chu, & Sauer,
2017), which improves purchasing incentives (Altarteer, Charissis, Harrison, & Chan,
2013). In addition, customers believe that utilising digital technologies will be more
fun in the future (Perks, 2016), and industry experts expect that features such as
these will affect the way in which people make purchases (Parro & Santoro, 2015).

The public has the impression that the virtual world is still in its infancy since virtual
reality still needs significant technological and operational advancements.
(Papagiannidis, 2017). Despite the fact that the technology is still in its infancy,
several companies have taken the intelligent choice to incorporate it.

VR Showrooms
The concept of virtual reality (VR) showrooms, which are immersive spaces meant to
display items or services in 360 degrees, is not a new one. However, until recently,
business owners generally saw this technology as a useful marketing tool and a
crowd-pleaser at events. (T. Kumar, 2021) In-person encounters were favoured by
customers when making purchase decisions, despite the fact that certain
businesses, such as luxury fashion brands and automobile dealerships, offered
virtual showrooms as an innovative method to see their wares. The retail industry, on
the other hand, rediscovered virtual reality (VR) showrooms as viable alternatives to
shopping in-person throughout the course of the pandemic, which accelerated the
technology's mainstream adoption. (T. Kumar, 2021)

Virtual showrooms have been most enthusiastically adopted by the apparel industry,
which places a significant amount of reliance on them to organise virtual trade
exhibits, wholesale appointments, and media events. Between May and June of
2020, there was a rise in demand that was 2,000% higher for the platform that
BrandLab, one of the leading VR showroom platforms, uses to hold virtual fashion
events. Other vendors have observed an increase in demand that is comparable to
BrandLab's. Virtual reality showrooms may be able to give realistic experiences at a
fraction of the cost of a live fashion show by using high-resolution 3D images and
video, overlay product descriptions, zoom-in, fabric close-ups, and other experience
customisation options.

These stores improve the customer experience of their showrooms by including

audio tours, selfie modes, AI-powered search engines for buying from images, and
alternate methods for consulting directly with sales employees. Because of the
adaptability, simplicity of customization, cost savings, and environmental benefits
offered by VR technology, several businesses are working toward the goal of
maintaining their virtual reality showrooms as online sales channels in the future,
after the epidemic.

IKEA
The Takeleap-created IKEA Virtual Reality shopping experience enables consumers
to pick their home layout and furnishings in actual size, and then get a list of all
chosen goods with their unique reference code and pricing list.
The IKEA showrooms in Jordan, Morocco, and Kuwait had a peculiar issue: their
showrooms were situated on the outskirts of the cities, and the locals were unfamiliar
with the protocol of IKEA's DIY business model. Another significant difficulty was that
many inhabitants were ignorant of IKEA's existence and extensive product
categories. Initially, IKEA believed that the greatest solution to this issue was to use
Augmented Reality to educate its target clients. TAKELEAP offered a VR Experience
and a 360-degree VR tour as an alternative solution after doing more research. The
IKEA VR Experience was implemented at retail centres in Amman, Marrakesh,
Tangier, Casablanca, and Kuwait, resulting in a 20% increase in IKEA's foot traffic
and revenues. (demodern, 2020)

TOMS
TOMS, a shoe company recognised for its humanitarian activities, used VR
technology to launch its "Virtual Giving Trip" digital contribution campaign. This
charity drive began by providing a new pair of shoes for every pair of shoes bought.
Then, its staff and partners will tour the globe on this humanitarian mission,
distributing new shoes to children and observing their own efforts. TOMS works with
Within (formerly VRSE), a VR technology start-up, to build an in-store virtual reality
experience using VR technology in order to enable their consumers to engage in this
significant trip. Using virtual reality goggles, clients may virtually experience this
contribution tour. (Nafarrete, 2015)

The TOMS virtual donation tour exemplifies what businesses can do with VR
technology. This immersive sensation is the power of virtual reality, which not only
offers consumers a novel experience but also influences their emotional reactions.
TOMS has effectively proven the brand's affection with its consumers and
encouraged them to develop a deeper emotional connection. By enabling consumers
to experience a charity trip directly and feel the effect of their donations, the business
is energised by its charitable activities, therefore developing a deep emotional
connection with its customers. (Nafarrete, 2015)

Virtual Try-on
Virtual reality may show "what could be." Within the realm of virtual reality (VR), the
term "virtual try-ons" (VTOs) refers to 3D pictures that depict the usage of certain
objects. The purpose of these pre-sale try-ons is to give customers an idea of how
the products will work or how they will fit in an attempt to influence their purchase
choices (Yim, Chu, & Sauer, 2017). According to the findings of the research, there
are a substantial number of applications for VTOs. AR 3D models improve both
themselves and the surrounding environment, enabling buyers to virtually try on a
variety of items, including but not limited to furniture, clothes, and cosmetics (for
example, the IKEA Catalog, Uniqlo's Magic Mirror, and Sephora Virtual Artist).
Customers are immersed in virtual reality settings in a VR VTO, which simulates
what it would be like to really use the product (e.g., IKEA VR Experience, Volvo
XC90 Test Drive).

Sales Channel
AR and VR applications can make it easier to bring products or services to market so
that consumers can buy them. The goal of these applications is to make immediate
use of the customer engagement that VR can achieve at the pre-sale level, such as
during virtual try-on, customer-as-designer schemes, or various marketing practises.
AR and VR applications can also make it simpler to bring products or services to
market so that consumers can buy them (Yim, Chu, & Sauer, 2017). As a
consequence of this, they may serve as sales channels, which are included into the
purchase path of the client via quick actions to buy (e.g., Sephora Virtual Artist, IKEA
Virtual Reality Store).

Customer-as-Designer
AR/VR applications may be used to increase the value of goods by including
consumers in the process of value generation. The AR/VR tools are provided by a
corporation, and clients may design the final product or create a unique user
experience with the product (Bezamat, 2019). The "customer-as-designer" use case
may occur pre-sale (e.g., NikeID In-store AR) and/or post-sale (e.g., Lego AR
Studio).

Nike
Nike has introduced a virtual marketplace where products can be purchased only
using Air Max credits. All goods in the shop has been digitised, floating in the space
and permitting 360° PC or mobile phone viewing. This includes AM720-themed
water bottles, socks, and stickers, all created in partnership with the brand's creative
network. It employs virtual avatars of its various partners, such as London-based
designer Mini Swoosh, England player Raheem Sterling, and DJ Peggy Gou, as
sales associates to guide clients throughout the purchasing trip (Dezeen, 2021)

After-sale Customer Service

The ability of immersive technology to merge with reality affords immersive
applications the chance to bring virtual content to real-world use contexts and deliver
extra consumer value (Bezamat, 2019) report that virtual reality (VR) apps may
provide a variety of after-sale services by providing complementary product-related
information in use-context. This allows consumers to expand their bought items with
additional, virtual material for a variety of objectives (e.g., entertainment content for
Lego AR Studio, promotional content for McDonald's Track my Maccas) or to get
helpful after-sale customer service and advice (e.g., Hyundai Virtual Guide).
Workflow Management:

AR and VR applications might have a significant impact on the back-of-house

operations of retail stores and allow improved workflow management, for example, in
the areas of warehouse planning and order picking (DHL Vision Picking). The extra
layers of information that may be viewed via these technologies – whether in real or
virtual environments – give a number of chances to annotate and organise retail
process. These opportunities may be found in any situation (Boletsis and
Karahasanovic, 2018; Satoglu et al., 2018; Guo et al., 2015).

Branding and Marketing

It is possible to use virtual reality (VR) applications in two distinct ways: I in a short-
term, tactical manner to engage/activate consumers by generating engaging,
emotional encounters, and ii) in a long-term, strategic manner to build a brand as
technologically inventive and creative. Both of these applications have their
advantages and disadvantages. Virtual reality has a special place in the toolkit of
retail marketers due to the fact that it has been shown to have the capability of
eliciting a powerful emotional response from the viewer. In most cases, the
"marketing" use of virtual reality contains omnichannel functionality (for example,
L'Oréal Makeup Genius, Tesco Discover, IKEA VR Experience, McDonald's Track
My Maccas, and so on). This means that it contains connections to other marketing
channels, such as magazines, social media, advertisement videos, websites, and
physical stores, in order to create powerful brand experiences and innovative multi-
platform offerings (Verhoef et al., 2015; Boletsis and Karahasanovic, 2018). The past
few years have seen a wide variety of digital and offline VR-based advertising
campaigns, ranging from IKEA's Steam-enabled VR pancake kitchen, in which users
could cook under professional guidance, to Lowe's Holoroom How To, an in-store
DIY skills-training clinic in which visitors could learn the ropes of home improvement.
Both of these examples are examples of VR-based advertising campaigns.

These marketing programmes, along with others like them, that allowed for in-depth,
hands-on demonstrations of products and services routinely raised sales and
contributed to the development of brand awareness. In spite of the many advantages
they provide, most in-store installations have been discontinued due to worries about
customers' health and safety. The majority of businesses have already shifted their
focus to digital consumer experiences, which has resulted in the birth of unique
immersive advertising channels. Although it is very likely that stores will return to
business as usual once the epidemic has passed, it is also very likely that they will
not. The desire for excitement in consumers is catered to by businesses via the
usage of immersive gamification, which also enables customers to get involved with
the product that is being delivered.

Balenciaga
In promotion of their autumn/winter 2021 collection, Balenciaga has made
Afterworld: The Age of Tomorrow, a virtual reality (VR) video game, publicly
accessible on its website. The user navigates a future terrain and completes easy
missions by creating an avatar and donning Balenciaga's newest clothing. (Madsen,
2020)

Immersive in-game advertisements are a burgeoning kind of advertising. VR

gaming's meteoric rise in popularity has made games a viable advertising medium.
By partnering with VR game producers whose brand ideas align with their own,
businesses may incorporate discreet promotional content, ranging from traditional
banners and films to volumetric holograms, within the gameplay to increase user
engagement. (Madsen, 2020)

Virtual-Reality Employee Training

Comprehensive staff education is essential for corporate success and customer
happiness, yet many businesses still struggle to implement it effectively due to the
complexities involved. (Boletsis and Karahasanovic, 2020)
With continually growing product lines, product education should be ongoing but not
exhaustive. Employees also need many hours of scenario-based in-person training
to improve existing soft skills and acquire new ones, often urgently – consider the
early days of the epidemic. Due to workers working in shifts and various locations, it
is difficult to schedule conventional classroom instruction without inconveniencing
the majority, and deskless employees do not have access to online programmes.
(Boletsis and Karahasanovic, 2020)
Virtual reality, which is gaining ground as an instrument for corporate education
across sectors, has the potential to assist merchants in overcoming these challenges
and improving training results. In 2020, PwC did a research comparing the efficacy
of virtual reality training to conventional classroom and internet approaches.
Employees who train in a safe and realistic immersive simulation need less time to
assimilate the learning content and remain significantly more engaged throughout
the process, according to the findings. In addition, the students were exponentially
more confidence in talking and acting upon what they had learned, and they were far
more emotionally attached to the topic.

Walmart
Since 2017, Walmart has been using virtual reality to increase the number of training
centres and learning modules for routine and atypical operations, such as Black
Friday and holiday rush.
With over a million of their retail associates and managers having completed
immersive training, Walmart reports improved knowledge and skill retention, higher
staff satisfaction, and a significant reduction in training time, eliminating the need for
employees to work late or study on their days off. (azmi, 2021)

Aside from that, the conversion to VR training offers huge future cost reductions
since, once designed, the modules are easily scalable and need minimum
maintenance and teacher participation. VR is the greatest alternative for providing
remote training for both remote employees and teleworkers, since it needs no
additional equipment outside a headset and controllers. (azmi, 2021)

Virtual-Reality Merchandising
Product merchandising is a critical marketing activity that must rely on consumer
data to be successful in both online and physical locations. However, whereas digital
retail professionals have access to a multitude of insights based on meticulously
observed client behaviour, physical store merchandisers often fail to collect
meaningful information even during focus group testing owing to the sensitivity of the
data. (T. Kumar, 2021)
Adopted for the sake of marketing research, virtual reality may address this data
vacuum, reducing the need for speculation. With headsets monitoring users' eye
movements, in-store merchandisers are able to reliably analyse customer perception
and intent and calculate ideal product placement based on this data. In addition,
because to the adaptability of virtual reality design, marketers may easily modify test
case variables and experiment with various situations. 2017 (Bonetti, Warnby, and
Quinn)

Kellogg
Kellogg intended to launch their new Pop-Tarts Bites product, so they teamed with
Accenture and Qualcomm for a virtual reality (VR) solution to assist them determine
how to position the product on the shelves. Together, the tech firms constructed a
lifelike virtual supermarket, replete with aisles, shelves, and items, where participants
in focus groups could "shop" while wearing VR headsets connected with an
innovative eye-tracking analytics technology. The best location for Kelloggs' Pop-
Tarts Bites, according to the data gathered from this virtual study, was a bit lower
than conventional surveys showed, and the company's sales increased by 18%
during the testing period after implementing these findings. In addition to customer
research, virtual reality may be used to create planograms or patterns for product
placement on shelves. Working in a 3D environment, merchandisers can simply
move items and signs across shelves and aisles and construct appropriate shelf
layouts much more quickly, without having to deal with actual inventory and shelves.
(akhtar, 2020)

4.2 Q How can VR improve the shopping experience?

1 The amount of enjoyment and information gained via interactive and visual-
spatial cues is significantly increased. The process of making a purchase choice
is influenced in many ways by both informativeness and enjoyment. (Kang et
al,2020)

2 They are able to better understand the way a product may be utilised thanks to
the interactivity of VR, and if the product's fit can be evaluated, customers should
feel more at ease making purchasing decisions. (Martínez-Navarro et al,2019).
3 When it comes to triggering cognitive and conative responses from customers,
virtual businesses are far more effective than physical ones. (Meißner et al,2020)

4 virtual reality image of the shop provided a more pleasant shopping experience,
raising the purchase intentions, a higher intention to visit the physical shop, and a
higher level of online visit satisfaction than customers who only saw the standard
photo or the 360-degree photo of the shop. (Meißner et al,2020)

5 Customers who use virtual reality (VR) with a high degree of immersion pick from
a more extensive range of products and are less price sensitive. However, there
was no increase in participant satisfaction with their choices while using
extremely immersive VR. (Moes & van Vliet, 2017)

6 People who were put in a virtual reality retail setting reported higher levels of
being present in the experience compared to those who were put in a more
traditional, physical store atmosphere. In addition, the magnitude of this beneficial
effect is not influenced by people's perceptions of their own technical self-
efficacy. (Pizzi et al, 2019)

7 pleasure is a crucial psychological aspect for users; virtual reality shopping has
the potential to dramatically increase the joy that customers obtain from
shopping. (Hsu et al,2020)

8 Eight of the participants had personal interactions with the virtual store assistant,
and as a result, they rated their shopping experience more favourably overall. In
addition, they spent more time and money on their purchases. Only at the
stationery store did touch have an effect on customers' length of stay. (Fang et al,
2020)

9 The entertainment value, the informativeness, the perceived simplicity of use,

and the perceived usefulness of virtual reality are the primary factors that impact
the desire to use virtual reality for online shopping. (Zhao et al 2018)
10 After participating in a virtual reality experience, customers gave more positive
responses across the board when their responses were analysed (attitude,
approach behaviour, and satisfaction). According to research done by Han et
al,2020, an improved consumer flow experience has a good correlation with
behavioural intentions to adopt VR technology.

11 Technologies related to virtual reality may soon exceed conventional desktop

applications. Participants in the VR group not only found interactions with the
environment using motion-tracked controllers to be more natural than those using
e-commerce sites, but they also felt more immersed by (a) visual elements using
a stereoscopic head-mounted display (HMD) and (b) the existence of additional
audio cues. (Schnack, 2013)

12 Utilization, usefulness, and pleasure are all positively related to a propensity to

adopt virtual reality technology. (Han et al, 2020)

13 Some of the participants said that their in-store behaviour accurately represented
their real purchase choices, whereas others denied that this was the case.
Slater's thesis that powerful telepresence leads to more realistic behaviour was
validated by the findings of this investigation (2009) Virtual reality may enhance
the realism of shelf allocation reactions. Participants purchased more things,
spent more money, and reacted more strongly to price discounts in both the
virtual reality and photographic representations than they did in the actual shop.
(Herpen et al,2016)

14 Brands have the potential to improve customer outcomes such as purchasing

behaviour, contentment, and brand loyalty by using virtual reality (VR)
experiences that range from high to low engagement. (Ketron and Cowan
both,2019)
15 Users get a more enjoyable shopping experience thanks to virtual reality's
increased media richness, which in turn motivates customers to make purchases
of items or services. (Moes & van Vliet, 2017)

16 state that utilitarian (task-related and rational) and hedonic (fun-aspect) values
play substantial roles in moulding consumers' attitudes and behavioural intentions
about the use of virtual reality technology (Peukert et al, 2019)

17 The virtual channel has an effect on the purchasing preferences of customers,

which may lead to either utilitarianism or hedonism and eventually contributes to
the satisfaction of the retailer. (Pizzi et al, 2019)

18 It was discovered that consumer behaviours and impressions assessed using VR

are reliable predictors of those evaluated using real-world stores. This opens up
whole new possibilities for A/B testing in terms of both its breadth and its cost-
effectiveness. Virtual reality may provide practitioners with a highly realistic
evaluation of the effectiveness of essential factors such as assortment breadth
and depth, store layout, lighting, music, and other retail ambiences. Practitioners
can use VR to do this.

4.3 Q What sort of shopping experience can VR provide in comparison to other retail
venues?
There are contradictory findings on the distinction between virtual reality and other
purchasing channels, such as physical shops and the Internet. While considerable
literature exists on the comparison between VR shops and physical stores, research
on the comparison between VR stores and eCommerce is in its infancy. Not only can
VR offer a comparable shopping experience to that of a real store, but in some
circumstances, it can also produce better results than traditional shopping interfaces.

Comparing online and in-store buying experiences reveals that v-Commerce may
need to correct for some of what e-Commerce performs poorly. This is because e-
Commerce cannot include tangible and tactile aspects, thus shoppers cannot
compare items based on their quality, size, and style.
1. Among the studies that compared the VR shopping environment to the real
shopping environment (typically as the control group), three demonstrated that
participants have similar experiences in the VR environment and the real shopping
environment, indicating that a VR shop can serve as a representation of a real
shopping environment (e.g., Bressoud, 2013, Lombart et al, 2020, Pizzi et al., 2019).

o Consumers' views of the quality and look of items in a VS (virtual and

immersive virtual) were comparable to their perceptions in a real shop. The
realistic representations of the products in the virtual reality environment,
coupled with the users' visual and haptic interaction and immersive
experience in the virtual reality supermarket, may have deceived human
senses, leading consumers to believe that what they see is what they will
receive (Westland and Au,2013)

o Consumer behaviour is the same in virtual reality settings as it is in real-world

stores. However, in virtual reality environments, participants did not get input
on the weight of packages, and they're gripping of products varied from that of
real-world shoppers. (Lombart et al.,2020)

o -Regarding customers' judgments of pricing fairness, there were no changes

across purchasing channels. In addition, customers purchased more things in
the VS (virtual and immersive virtual) than in the real environment.

2. In certain respects, five research have demonstrated that virtual reality shopping
may be more beneficial than traditional shopping (see Bramley et al., 2018, Martnez-
Navarro et al., 2019, Pizzi et al., 2019a)

o Virtual storage generate cognitive and conative reactions more effectively.

Martínez-Navarro et al., 2019
o Brand recall seems to be much greater in all v-commerce settings than in the
physical shop Martínez-Navarro et al., 2019
 o Emotions encountered in a virtual shop influence the sensation of presence
(H1), which boosts customers' buy inclinations. Tonkin et al., 2011

3. Existing research indicates that virtual reality may increase the experience value
of purchasing. However, a VR store seems to have no benefit over traditional stores
when it comes to the efficiency of product searches (Tonkin et al., 2011).

5. Discussion
The study aimed to determine how virtual reality (VR) may boost consumer
engagement in the retail sector. Due to the constraints of e-commerce and brick-
and-mortar establishments, previous research has shown the dire need for virtual
reality (VR) in retail. Due to the advent of digital media and e-commerce, there has
been a fall in interest in physical stores; therefore, conventional distribution channels
are seeking to integrate novel methods such as virtual reality (VR).

To analyse how virtual reality may improve consumer engagement, it was important
to comprehend its present market uses. To determine the applicability, the papers
assess existing instances of retail businesses utilising virtual reality for a range of
objectives. It is recognised that virtual reality has valuable retail applications,
ranging from marketing and promotion to after-sale services. It has also assisted
brands with process management and staff training. Ikea's virtual reality showroom
aided in the promotion of its physical showrooms, which were inaccessible to
customers. Similarly, TOMS used a virtual reality (VR) campaign to launch a digital
contribution campaign, exemplifying how businesses may build a stronger emotional
connection with their consumers. Virtual try-on is an additional creative use that is
particularly needed in the garment business, since the try-ons provide buyers a pre-
sale concept of how the product will function or fit, so trying to influence purchase
choices. Nike, a prominent sports company, made novel use of VR by allowing
consumers to create their own gear in their virtual reality shop, resulting in a greater
sense of personalisation and product engagement. Balenciaga created a VR game
to advertise their fashion, which is an intriguing example of how businesses are
exploiting the use of VR in other sectors, such as gaming. VR is also allowing firms
to save money on employee training by allowing staff to participate online.
The research utilises the SOR model to assert that environmental cues (stimuli)
influence shopping behaviour results (responses). On the basis of this framework,
we have addressed which external stimuli have been studied in the past and which
psychological and behavioural variables might be influenced by these stimuli. Also
for the sake of brevity, the sample products utilised in the study, the simulated
environment in which the research has been conducted, and the equipment that
have been employed in previous studies have been described. Different hypotheses
have been related to determine how virtual reality might enhance the shopping
experience. According to prior research, the concept of consumer empowerment is
tied to the following five dimensions: (1) the sensory, (2) the emotional, (3) the
intellectual, (4) the behavioural, and (5) the social (Schimtt, 2011). These
characteristics centre upon client participation in the purchase process. After the
purchase is complete, a consumer's level of satisfaction, trust, and loyalty to a brand
all contribute to their total customer experience (Lemon and Verhoef, 2016). Using
VR technology, merchants may effectively use these dimensions to improve the
client experience. This can be accomplished by utilising the fundamental
characteristics of virtual reality, namely (a) immersion, which is the sensation of
being surrounded by a digital environment; (b) presence, which is the sensation of
existing in a virtual landscape; and (c) interactivity, which enables users to virtually
interact with objects and surroundings in real-time (Lee and Chung, 2008). (a)
consider (which is prompted by a stimulus), (b) evaluate/engage (which entails
evaluating the various in-store and online possibilities), and (c) purchase (Bousaleh
and Mathew, 2011).

The key influences on the intention to use virtual reality for online buying are
entertainment value, informativeness, perceived ease of use, and perceived utility.
Fang et al., 2020. Therefore, merchants must concentrate on satisfying these
specific requirements to engage consumers with the brand. According to previous
research, the interactivity of a virtual reality (VR) environment increases the
informativeness and fun of the experience, while also enhancing the customer's
understanding of the product, which ultimately simplifies and improves the
purchasing decision-making process. Retailers may utilise in-store assistants to
increase involvement, since it was shown that participants who were contacted by a
virtual shop assistant spent more time and money on purchases, and rated their
entire shopping experience as more pleasant. It has been shown that the VR
interactive environment provides more natural interactions than e-commerce, since
customers feel more immersed when utilising a head-mounted display and audio.
Additionally, a VR retail environment may generate a stronger sense of presence
than a conventional shopping environment, which can have a favourable effect on
consumer behaviour, resulting in more time spent and increased sales. Pizzi et al
(2019a) In a research conducted by Meißner et al. (2020), it was determined that in
more immersive surroundings, buyers choose a wider selection of items and are less
price sensitive. In addition, virtual shops have been shown to generate stronger
cognitive and conative reactions than actual stores. Martnez-Navarro et al. (2019),
which may increase the approach behaviour and client attitude further. Also, retailers
are recommended to improve their media richness, since it is directly related to
increased sales. Van Kerrebroeck et al (2017)

Past research comparing virtual reality shops to other sorts of shopping channels
had conflicting results. Some of them demonstrated that VR shops are superior to
traditional shopping channels, while others shown that VR stores had no meaningful
influence on consumer behaviour. A small number of studies have shown that virtual
reality (VR) shops can simulate the actual shopping experience, which may be seen
as a favourable indicator for firms seeking to move their shopping channel to VR.
Lombart, 2020 demonstrated that buyers' opinions of the product's look and quality
in virtual reality shops and actual stores were identical. A research by Martnez-
Navarro et al. shown that virtual reality boosts brand memory, which may lead to an
increase in brand loyalty. The same research also shown that VR is capable of
eliciting cognitive and affective reactions, which may be further categorised as
perceived value, benefits, and overall experience, memory recall, information
processing, familiarity, and felt intrusiveness (Pfeiffer et al., 2017).

5.1 Drawbacks
Past research has shown that the usage of virtual reality shops offers many benefits,
but some research has also highlighted the disadvantages that virtual reality stores
now face. Some of these disadvantages are a result of technical restrictions that may
be overcome with the development of technology. It might be claimed that these
shortcomings are the reason why virtual reality is not yet widespread in the retail
sector and has been mostly confined to the gaming and entertainment industries.
These obstacles dissuade many businesses from pursuing it.

Price is a significant disadvantage when selecting virtual reality sales outlets. Due to
the fact that it involves precise 3D modelling, experience designers, and software
designers, as well as usability and performance testing. In addition, shop
implementations of VR need the expensive acquisition of a sufficient quantity of
virtual reality-specific gear. The pricing barrier is anticipated to diminish in the future
as virtual reality becomes widespread.

As virtual reality is a relatively new technology and consumer, even tech-savvy

individuals may suffer apprehension over the gear and VR-enabled experiences. In
addition, the cost of the VR headset and controller hinders users from purchasing
and testing it. This disadvantage may be eliminated by educating workers and
consumers, giving them with a full demonstration of how to use the headset and
controllers, and exposing them to all the capabilities of a VR application. Using
awareness campaigns, marketers might alleviate end-users' anxieties and pique
their interest in immersive experiences.

A 2016 research by Liu and Uang shown that "cybersickness is caused by virtual
reality in the elderly" He proved that information disparities lead to cybersickness and
that a lack of control leads to temporal postural instability. It has been validated by
recent research, and this is a major worry for retailers given that motion sickness has
occurred in real-world situations.
Retailers may address this problem by selecting a more advanced type of positional
tracking, which can make the immersive experience more natural and pleasant, or by
reducing the duration of VR sessions to 20 minutes.

5.2 Shop Design

Research on website design demonstrates that a user-friendly page layout, excellent
search engines, up-to-date content, clear navigational structures, simple checkout
procedures, and user-friendly interfaces are all essential for online shopping.
The purpose of the VR store layout is to use VR to promote product sales. It will
seek to comprehend user behaviour throughout the immersive encounter and
provide a customised experience that encourages product purchase. The business
will add a Virtual Reality component to eCommerce, so creating a triple
phenomenon. During the VR buying experience, the store will use a procedure that
will enable us to comprehend the dynamics of this triple phenomenon. This will help
us understand the purchasing experience from the standpoint of the client. This
technology will generate new design components depending on current customer
behaviour in order to personalise the shopping experience and stimulate buy intent.
(Elboudali et al., 2020)

A v-commerce system incorporates a virtual world and immersive interactions to

enhance the e-commerce module. The virtual environment is comprised of many
scenarios (represented by various spherical panoramics) that correspond to distinct
areas of a VR store that a customer may tour. The user will be engaged in a 360-
degree environment that must be developed to align the consumer's direction with
the brand perception. In order to do this, the virtual environment employs
behavioural icon (BI) features that assist the user in navigating and interacting inside
the virtual world. The user may traverse and interact with the virtual world utilising
the device's immersive means of interaction, such as head-mounted displays, haptic
devices, etc. (Elboudali et al., 2020)

Behavioural Icons

A button that is positioned at a certain location inside

the virtual world and anchored there. This gives
customers the ability to explore the virtual world and
choose between different sceneries.
A button that is not located at a particular point in the
virtual world but rather is fixed into the web browser
itself. This gives customers the ability to explore the
virtual world and choose between different sceneries.
 A call to action, represented by a button, that
identifies an object in the virtual world that may be
interacted with.

The customer interacts with the aforementioned BI's utilising a technique of "look per
click." Look lasting longer than 500 milliseconds were deemed look-to-actions, and
when a user looks at interactive material, the appropriate actions are conducted.
The greatest obstacle for eCommerce and merchants is bilinear product/customer
coupling, or more particularly, selecting the appropriate product for the appropriate
consumer. By bringing a VR dimension to e-commerce, a third phenomenon will be
created including the surroundings. The triple phenomenon demonstrates the critical
requirement to watch customer interaction with the product and the virtual staging
environment in order to determine which product should be put in the virtual staging
environment that best presents it for each consumer. (Elboudali et al., 2020)

The store will have a tool for recording VR user interactions in order to derive data
on consumer behaviour as a whole. This instrument will provide merchants with an
instructive and unobtrusive means of comprehending customer behaviour .
Observing the consumer's gaze/direction permits extrapolation of the eye behaviour
patterns that lead to the purchase intent. (Elboudali et al., 2020)

Logging the consumer's gaze enables the extraction of the level of attention to
content in a virtual store and the identification of design elements to be considered
for a personalised experience (e.g., percentage of consumers looking to the right
when visiting a scene, regions of scenes most viewed, etc.). The navigation data
may be utilised to reconstruct the customer trip and relive the buying experience
through the eyes of the consumer. Such a technique may assist in identifying new,
consumer-retaining staging settings with significant effect. The measurement of the
time spent on distinct sections of the staging environment gives strategic product
placement information about where to replace and better promote items (i.e., style of
décor, type of interactive content, etc.) that influence purchase intentions.
During the VR shopping experience, the store will collect customer behaviour data
via the use of interactive content. It will employ interactive tools such as Product
information, ratings, and surveys to engage customers and collect qualitative
feedback on their buying reasons. For instance, the product information tool refers to
an interface of motivators, such as product description text, colour choices, use
modes, and price tag, which correspond to aspects that correlate to purchase-intent-
promoting drivers. Therefore, the method of interaction with each element and its
effect on customer behaviour are investigated. This permits the investigation of the
consumer's interaction with product qualities.

The store will examine the raw navigation, interaction, and consumer impact data to
derive key performance indicators (KPIs) such as the median number of clicks over a
period of time, the average time a consumer spends on the site, and the average
number of pages seen. The KPIs are then turned into illuminating graphics that
visually represent customer behaviour in the virtual shop.

The store would undertake a data-driven design approach based on the collected
customer information. The store will extract the criteria that control the ordering of
new products depending on the (product attributes, product categories and price
range). The store will then extract the rules that characterise current customer
behaviour inside the VR staging environment. By filtering general behaviour, the
store will determine the most popular VR staging spaces and decors. The store will
indicate the top modes of interaction (i.e., which product sheet features contributed
most to a purchase, which navigational strategies were used, etc.). Eventually, the
store will implement the new design rules that define the present triple dynamics into
the existing VR shop environment. This repeatedly cycles back to the initial phase of
the process, modifying the VR shop's design components based on user behaviour
data to encourage purchases. Consequently, depending on the recorded customer
behaviour, the user's purchasing experience will be tailored to the consumer in order
to increase purchase intentions.
Conclusion
Immersive and interactive virtual reality shops have been shown to be superior to
conventional shopping channels in the literature. It has become one of the most
significant approaches for eCommerce firms to achieve technical excellence, and
according to previous study, it is highly advised for merchants that want to improve
client engagement. Retailers could deploy virtual reality (VR) solutions in-store and
at home to give consumers with more natural interactions in familiar situations, which
may improve the shopping experience and boost sales. Retailers should elicit
Affective reactions to promote a satisfied cognitive state in consumers, which is
directly related to the desired behaviours. This may be accomplished by making the
environment more engaging, since this generates emotion, a deep feeling of
presence, and cognitive reactions that boost company performance, such as brand
memory, which influences buy intent.

These virtual surroundings must be energising and have elements that may generate
emotional experiences and good effects. Retailers must comprehend the variables
that impact customer perceptions, including comfort, content (environment,
information, product presentation, and product features), functionality (accessibility,
interactivity, personalised service, vividness), media richness, perceived value
(convenience, cost, and trust), social networking, and user experience (physical
presence, product involvement and product perception).
User experience is also a crucial term in this context. According to studies, "user
experience" refers to how a customer interacts with a product, its surroundings, and
a brand, as well as how this impacts the consumer's connection with the
environment. These examine how individuals think, feel, behave, socialise, and
physically feel in the retail environment. The incorporation of interactive elements
that combine VR and AR technologies with social media and website linkages has
the potential to improve the user experience; thus, retailers should concentrate on
including these features. On the other hand, according to Kolko (2011), researchers
should concentrate on developing experiences rather than creating physical objects.
Therefore, in order to create effective v-Commerce purchasing environments,
designers must consider how customers perceive things, attempt to comprehend
how consumers embrace technology, remain current on new technology and market
trends, etc. This will assist establish successful marketing and retail strategies to
enhance and improve the consumer shopping experience.

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