FINAL PROJECT ASSIGNMENT

PROPOSED METHODOLOGY

GROUP NAME: GROUP-06

GROUP TOPIC: The Impact of Augmented Reality on Product Visualization in Housing Property
E-commerce: Analyzing Consumer for Purchase Intention to Buy Housing Property

GROUP CODE: RML**GRP__06

GROUP MEMBER: 1. Dimas Cindarbumi (2402308820)

2. Indra Rosadi (2402314123)

INTRODUCTION

The rapid development of information and communication technology (ICT) has had a significant impact
on the need for information in human life. With the growing popularity of the internet and web-based
technologies, property e-commerce is becoming one of the areas that gets special attention in terms of
consumer decisions (Ballerini et al., 2023; Esmeli et al., 2022). The process of buying property through e-
commerce is now an option that is increasingly in demand by consumers (Moriuchi et al., 2021). However, in
this process, it is important to understand the role of consumer behavior as the key to success in property e-
commerce transactions (Rintamäki &; Saarijärvi, 2021). Basic concepts related to the role of consumer behavior
in property e-commerce transactions are relevant to understand. The influence of consumer behavior in the
process of buying property through e-commerce can shape market dynamics and determine the success of a
transaction (Ferreira et al., 2023). Therefore, it is important to understand how consumers make purchasing
decisions in a property e-commerce environment that is different from traditional purchasing methods (Esmeli et
al., 2022). In addition to the role of consumer behavior, the development of augmented reality (AR) technology
is also important in helping consumers see properties virtually. With AR technology, consumers can experience
an "almost real" sensation when viewing properties remotely (H. K. Song et al., 2019). The use of AR
technology on property e-commerce has a significant impact in presenting a more interactive experience and
making it easier for consumers to make purchasing decisions (Nanda et al., 2021; H. K. Song et al., 2019).

However, behind the huge potential of property e-commerce and the development of AR technology,
there are still problems that need to be overcome (Huang et al., 2019; Kowalczuk et al., 2021). Among them is
establishing a good strategy for communication between sellers and consumers in e-commerce properties, which
needs to be identified (Dash et al., 2021). The mismatch between the digital representation of the property and
its actual condition when viewed physically is also a potential problem in e-commerce property (Hassan et al.,
2021b). Sometimes, the images and descriptions presented in the e-commerce platform do not fully reflect the
actual condition of the property. This can lead to consumer confusion or dissatisfaction after physically viewing
the property (Hassan et al., 2021b; Kowalczuk et al., 2021). Research by Smit et al., 2019 highlights several
important aspects related to consumer decisions in buying residential properties through e-commerce platforms.
This research investigates how psychological factors such as trust, risk perception and consumer motivation
influence their decision to purchase property online. In addition, this study also analyzes the role of technology,
especially e-commerce platforms and technological features used in online property purchase transactions.

PROBLEM STATEMENT

There are several studies that have been conducted to analyze consumer decisions about buying
residential property through e-commerce. This research explores various factors that influence consumers'
decisions to buy property property online, as well as how e-commerce technology can influence their buying
behavior (Ullah et al., 2021). One of the relevant previous studies is research conducted by Song et al., 2019
which found that convenience and ease of shopping through e-commerce platforms are the main factors
influencing consumer decisions about buying residential properties. However, there is a difference between the
research conducted by Smit et al. and the convenience of purchasing property in e-commerce. So far, e-
commerce tends to be more widely used in the purchase of general consumer products, such as clothing,
electronics, or food. However, when it comes to purchasing residential property, factors such as location, size,
construction quality, and social environmental factors are still important considerations for consumers.

Although the convenience and ease of shopping through an e-commerce platform can be a relevant
factor in some aspects of property buying, such as searching for information or viewing pictures of a property, it
is important to recognize that residential property purchase decision making still requires direct interaction and a
comprehensive physical experience. This suggests that the study focused on consumer perceptions of online
property purchases and involved psychological and technological factors that influence them. The research
involves an analysis of how psychological factors such as trust, risk perception, or consumer motivation
influence their decision to buy property online. In addition, this research can also involve analyzing the role of
technology, such as e-commerce platforms or technological features used in online property purchases (Smit et
al., 2019).

However, behind the huge potential of property e-commerce and the development of AR technology,
there are still problems that need to be addressed (Huang et al., 2019; Kowalczuk et al., 2021). One of the
problems that arises is the inability of consumers to see and feel the property directly before making a purchase.
This can lead to dissatisfaction or even regret after the purchase has been made. Therefore, it is important to find
the right solution to this problem. Based on the above discussion of the previous literature, there is sufficient
evidence that the topic of how to analyze consumer decisions in buying residential property still needs to be
solved, especially by following the development of AR technology. Because there are still many unresolved
findings on the topic in question.

RESEARCH QUESTIONS

Based on the discussion above, the research questions for this article are:
1. What are the factors influencing consumer purchase intent in the context of purchasing residential
property through e-commerce platforms?
2. How does the use of e-commerce technologies, including the application of augmented reality (AR) to
visualize properties, affect consumer intent to make a purchase?

3. What is the role of information transparency and trust in e-commerce platforms in influencing
consumer purchase intentions in the context of purchasing residential property?

4. What are the main challenges and barriers to adopting augmented reality (AR) technology in the
property industry through e-commerce platforms?

5. How can communication strategies between sellers and consumers on property e-commerce platforms
be improved to improve the consumer experience and business profits?

The objectives of this study will be:

1. Analyze the factors that influence consumer intentions when buying residential property through e-
commerce.
2. Investigating the influence of e-commerce technology, especially the use of augmented reality (AR), on
consumer intentions in buying residential property

3. Assess the role of information transparency and trust in e-commerce platforms in influencing consumer
intent to buy residential property.

4. Identify barriers and potential implementations of AR technology in the property industry through e-
commerce.

5. Develop effective communication strategies between sellers and consumers in e-commerce properties
to improve the consumer experience and business profits.
LITERATURE REVIEW

The house has a very important role in human life (Mariadas, P. A. et al., 2016), not only as a shelter,
but also as a source of peace and comfort for the family (Hassan et al., 2021a). Residential properties, which
include homes as residences, are often purchased by individuals for protection purposes or as investments for
investors (Hong, 2010; Peter, 2012; Shaidi. & Lucian, 2016). Intention theory, according to Ajzen, 1991
describes that intention reflects an individual's motivation for performing a particular behavior, and this can
affect the extent to which the behavior will be performed. This concept is reinforced by the views of Taylor &
Todd, (1995) who consider intention a strong indicator to predict human behavior.

In the digital age, technology continues to change human interaction with their environment, including
in the context of purchasing residential property through e-commerce platforms (Ballerini et al., 2023; Nanda et
al., 2021). One significant innovation is the application of augmented reality (AR) in residential property e-
commerce, which combines the physical world with digital elements, creating a more immersive visual
experience ( Huang, L., Lu &; Gupta, 2019; Moriuchi et al., 2021). This study aims to investigate how the use
of AR can influence consumer purchase intent in the context of residential property e-commerce.

In the context of residential property e-commerce that utilizes Augmented Reality (AR), experience
quality includes user experience and service quality, involving factors such as response time, reliability, error,
and latency (Hamam, M., Eid et al., 2008). Previous studies on innovative technologies (Kowalczuk, Z. et al.,
2018; Yang et al., 2016) provide a basis for assuming that AR use can improve the shopping experience,
including property search, evaluation, and selection, by reducing the time and effort required. Consumer
perceptions of residential property presentation through AR will also be more beneficial if the experience is
provided reliably, accurately, and smoothly. In view of this, the relationship between system quality and feelings
of belonging, as observed by Kim & Hyun (2016) as well as other studies (Kowalczuk et al., 2021; Park et al.,
2015), can be applied to this context.

Previous research has revealed an interesting link between immersive experiences or "immersion," the
quality of technology systems, feelings of belonging to a product or service, and intent to make a purchase.
Studies by Kowalczuk et al. (2021) and Yim et al. (2017) suggests that immersive experiences can moderate the
positive relationship between system quality and feelings of belonging. Increased feelings of belonging are also
associated with purchase intent, as highlighted by Brengman et al. (2018) and Song et al. (2019). Therefore,
it is assumed that immersive experiences not only increase feelings of belonging but also indirectly influence
purchase intent through the intermediary of these feelings of belonging.

In this context, there are several aspects that need to be considered regarding the relationship between
congruent reality and confidence in product selection. Congruent reality (RC) can have a significant impact on
confidence in choice (CC), as previously explicit findings suggest. In addition, literature linking product
informative questions to the selection process (Kowalczuk et al., 2021; Rese et al., 2014) can provide guidance
for understanding the influence of this factor in a broader context. The relationship between confidence in
election (CC) and intent to buy (Purchase Intention), which has been supported by previous research
(Kowalczuk et al., 2021; Oh et al., 2008 ), was also an important focus in this study. The entire study seeks to
combine these various elements to gain a better understanding of the relationship between congruent reality,
product informative questions, beliefs in selection, and intent to buy in a more comprehensive context.

In research by H. K. Song et al. (2019), Perceived Realism, Emotional Engagement, and Perceived
Ease, help us understand the mechanisms underlying how AR affects purchase intent. Consumer perceptions of
visualized product realism, AR-induced emotional experiences, as well as perceptions of convenience using
these technologies can have an impact on purchasing decisions. In its totality, this literature illustrates a
comprehensive framework for understanding the effect of AR on consumer purchase intention in the context of
residential property e-commerce. Integration of these concepts and provides a deeper look at the potential
impact of AR and its mechanisms on consumer decisions.
Based on the above literature review, we have developed a conceptual model that reflects the relevant
relationships in the context of our research.

Hypothesis:
H1a = System Quality (SQ) positively affects the Feeling of Ownership (FO).
H1b = Immersion (IM) positively moderates the relationship between System Quality (SQ) and Feeling of
Ownership (FO).
H1c = Feeling of Ownership (FO) positively affects Purchase Intention (PIN).
H2a = Reality Congruence (RC) positively affects Choice Confidence (CC).
H2b = Choice Confidence (CC) positively affects Purchase Intention (PIN).
H3a = Product Informativeness (PI) positively affects Choice Confidence (CC).
H3b = Media Usefulness (MU) positively moderates the relationship between Product Informativeness (PI) and
Choice Confidence (CC).

METHODOLOGY

Research Design
Consumer behavior in augmented reality (AR) in e-commerce real estate reveals significant related
relationships. System quality (SQ) positively impacts consumers' sense of ownership (FO) (Kowalczuk et al.,
2021; Park et al., 2015). The impact of SQ is uneven; immersion (IM) as a moderating factor, strengthening the
relationship of SQ and ownership (Kowalczuk et al., 2021; Yim et al., 2017). A sense of ownership contributes
to purchase intent (PIN), suggesting that a strong relationship with the product increases purchase intent
(Brengman et al., 2018; Song et al., 2019). Consistency of reality (RC) increases confidence in choosing (CC)
(Kowalczuk et al., 2021; Pantano et al., 2017), with a positive impact on purchase intent (Kowalczuk et al.,
2021; Oh et al., 2008). Product information (PI) positively influences voting confidence, indicating informed
consumers are more confident (Kowalczuk et al., 2021; Rese et al., 2014). The influence of PI on voter
confidence is amplified by the availability of media (MU) (Kowalczuk et al., 2021; Yim et al., 2017). This
complex relationship highlights the impact of AR and technological factors on consumer decision-making,
providing insight into modern commerce (Yim et al., 2017). This development assumes a higher affective
consumer response in AR than the web, assuming a stronger behavioral response in AR (Yim et al., 2017).

To uncover AR features that influence residential property purchase intent in the context of e-
commerce, our research uses mixed methods. In this approach, we seek to understand complex phenomena
through a combination of quantitative and qualitative methods (Creswell &; Creswell, 2018; Sekaran Uma,
2014). The level of intervention we used was non-experimental and we did not manipulate any variables.
Instead, observations were made on variables that already existed in previous studies by synthesizing several
varibales (Creswell &; Creswell, 2018; Saunders, M., Lewis, P. Thornhill, 2019; Sekaran Uma, 2014). The unit
of analysis we chose is the group (jabodetabek), which is a metropolitan area consisting of Jakarta, Bogor,
Depok, Tangerang, and Bekasi. We chose the cross-sectional study method to obtain an overview at a specific
point in time. This is closely related to the use of a representative sample and reflects diversity in the population.
Therefore, this hybrid approach will allow us to gain insight into the role of AR in residential property purchase
intentions in the Jabodetabek area. Data analysis will use PLS-SEM analysis models to examine the relationship
between dependent variables, independent variables, moderator variables and mediator variables involved (Hair
et al., 2011; Sarstedt et al., 2017). This method was chosen based on its analytical properties, which allows
exploring complex relationships between variables and understanding the effects more deeply (Chin &;
Newsted, 1999; Henseler et al., 2012).

Sampling Design
This study used demographic and psychographic criteria that describe the potential characteristics of
consumers who are the focus of research (Kotler et al., 2016; Schiffman et al., 2010; Solomon et al., 2014).
Based on demographic criteria, the target population is identified as individuals aged 25 to 55 years, both men
and women, with middle to upper income, S1 education, and working as private employees or self-employed. In
addition, psychographic criteria are also taken into account, including lifestyle and personality of consumers
(Kotler et al., 2016; Schiffman et al., 2010; Solomon et al., 2014). By combining these two types of criteria, the
study directs its focus to consumer groups that have certain demographic and psychographic characteristics,
potentially providing deep insights into consumer responses to AR-based product presentations (Han et al.,
2021; Huang et al., 2019; Kowalczuk et al., 2021). and mobile web in the context of residential properties
(Andri et al, n.d.).

The parameters to be examined in this study include cognitive, affective, and consumer behavioral
responses (Drengner et al., 2018) to the presentation of AR-based products and mobile web. In order to answer
the research question, researchers focused attention on how consumers respond and react to both types of
product presentation. To collect representative and relevant data, stratified random sample methods were
selected. This method was chosen because this research involved two different product presentation conditions ,
namely AR and mobile web. By dividing the target population into two strata corresponding to the product
presentation conditions, the stratified random sample method allows proportional sampling of each condition. It
is important to gain a more accurate understanding of the impact of both types of product presentation on
consumer response in the context of residential property.

Data Collection Methods &; Techniques

To test the proposed model, an experiment was conducted involving 300 respondents selected based on
demographic and psychographic criteria (Kotler &; Keller, 2016; Schiffman &; Kanuk, 2010; Solomon, 2014).
Respondents who participated in this program were given additional incentives in the form of mobile credit or
Gopay Balance as a boost to participation (Arranirti &; Izatunnisa, n.d.; Kasmawati, n.d.). This activity is
divided into two stages: first, respondents will watch videos showing the use of AR applications such as
PropertyViewAR that allow respondents to imagine interactive visualizations of residential properties through
mobile devices, which provide realistic images of interior design, room size, and property facilities and as a
companion to mobile websites and mobile websites that present property listings housing for sale, detailed
information about specifications, location and price. After that, an online questionnaire will be filled out to
collect responses related to important constructs, such as system characteristics, consumer reactions, cognitive,
affective, and behavioral responses. In addition, respondents will provide testimony as evidence to validate the
questionnaire. The ikert l scale and semantic differential scale were used for data collection (Kowalczuk et al.,
2021; Taherdoost, 2019). Demographic data such as age and experience using AR applications are also
recorded. The method integrates experiments, online questionnaires, and PLS-SEM analysis to understand how
both modes of presentation affect consumer response in cognitive (Schwarz, 2012), affective (Andrews ,
2013) dimensions; Verhagen & Bloemers, 2018), and purchase intent behavior (Yim et al., 2017).

Data Analysis
In this study, the proposed data analysis will use the Partial Least Squares Structural Equation
Modeling (PLS-SEM) analysis model using SmartPLS 3.2.9 software to test the hypothesis and uncover the
relationship between various observed variables (Hair et al., 2011; Sarstedt et al., 2017). This analysis aims to
understand consumer responses to Augmented Reality (AR)-based and web-based product presentations and
how different system characteristics affect cognitive, affective, and behavioral responses (Han et al., 2021;
Huang et al., 2019; Kowalczuk et al., 2021). First, descriptive analysis will be carried out to understand the
characteristics of the participant sample (Loeb et al., 2017; Rombey et al., 2019), such as age, experience in
using mobile AR applications, and gender composition. This data willprovide an initial picture of the
participants involved in the study. Furthermore, PLS-SEM analysis will be used to test the hypotheses proposed
in this study. These hypotheses include comparisons of system characteristics, consumer reactions, as well as
the relationship between system characteristics and cognitive, affective, and behavioral responses. The PLS-
SEM analysis process will involve several stages:
1. Model Assessment: First of all, a PLS-SEM model that includes the observed variables and the
relationships between them will be established. This model will reflect the hypotheses proposed in the study,
for example, the relationship between system characteristics and consumer response.
2. Model Conformity Test: Once the model is built, a conformity test will be performed to ensure it
matches the observed data. This conformity test includes a variety of statistics that help assess the extent to
which the model can explain the data.
3. Parameter Test: Next, parameters in the model, such as the relationship coefficients between
variables, will be estimated. This is done to understand how strong the relationship between variables in the
model is.
4. Hypothesis Test: The proposed hypotheses will be tested by analyzing the relationship coefficients
between variables. These results will provide information about the significance of the relationship and the
direction of influence between variables.
5. Mediation Analysis: This model will also allow mediation analysis to understand the role of variables
in influencing relationships between other variables. For example, how system characteristics influence
purchase intent through cognitive and affective responses.
6. Final Model Evaluation: Finally, the final model will be assessed based on the extent to which it
explains the pattern of data and the extent to which the proposed hypotheses can be accepted or rejected.
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