Exploring Factors Influencing Organizational Adoption of Augmented Reality in E-Commerce: Empirical Analysis Using Technology–organization–environment Model

By Chandra, Shalini; Kumar, Karippur Nanda | Journal of Electronic Commerce Research, January 1, 2018 | Go to article overview

Exploring Factors Influencing Organizational Adoption of Augmented Reality in E-Commerce: Empirical Analysis Using Technology–organization–environment Model


Chandra, Shalini, Kumar, Karippur Nanda, Journal of Electronic Commerce Research


1.Introduction

E-commerce is growing at a rapid pace, which is evident in the statistics stating that over a billion Internet users purchased goods through e-commerce websites in 2013 [Statista 2016]. In fact, retail e-commerce sales amounted to $1.86 trillion in 2016, and e-retail revenues are projected to grow to $4.48 trillion in 2021 [Statista 2018]. This dramatic transformation of the digital retail landscape with a rapidly growing user base has evoked a strong compulsion for e-commerce firms to differentiate themselves amongst their competitors and adopt creative methods to cater to their consumers. The unique challenge for e-commerce firms is to provide their online customers with the "try before you buy" tactile experience using rich media1. This has increased with an increase in online customers with varied needs who are increasingly curious and demanding of visual and tactile simulation [Huang & T seng 2015]. As a result, rich media content, such as high-resolution product images, videos, and 3D graphics, has been integrated into websites to enhance the customer experience [Gabisch & Gwebu 2011; Hassouneh & Brengman 2011; Hassouneh & Brengman 2015]. E-commerce companies are exploring the potential of the rich media and particularly immersive content offered by augmented reality (AR) to provide enhanced intuitive interface and an enriching experience to customers, thus creating a new paradigm in the space of e-commerce [Tabusca 2015].

AR is an emerging form of experience that integrates digital information with the user's environment in real time [Azuma et al. 2001]. As AR uses the existing environment and overlays new information on top of it, this technology is expected to overcome the biggest hurdle of e-commerce customers by allowing them to engage in some sort of interaction with their potential purchase before buying it and determining whether the product is right for them [Chen 2016]. It is estimated that, by 2018, over 140 million new users will have used AR technology through their mobile devices [Statista 2016]. It is also estimated that the market for AR will be no less than $120 billion in 2020 [DigiCapital 2015]. With the recent release of the AR gaming application Pokémon GO, which has been a huge success, the market value of Nintendo surged to $7.5B USD, which stands as a good example of people's acceptance and the commercial viability of the technology [Thinkwell 2016].

The applications of AR are widespread across industries, such as manufacturing, communication, health, retail, navigation, military, education, gaming, and e-commerce [Harborth 2017; Van Krevelen & Poelman 2010]. This study focuses on the application of AR in e-commerce because of the huge potential of this immersive technology in providing an in-store shopping experience regardless of location. Devices can superimpose 3D objects in various spaces, giving customers a chance to interact with digital renderings from the comfort of their own homes. Companies like IKEA and Converse are using AR to help users envision pieces of furniture in their homes or shoes on their feet in real time using smartphone apps. This increase in growth of AR applications can be attributed to the co nsumer's perceived benefit and positive experience [Olsson et al. 2013].

Despite this surge in AR technology usage across the industry, the responsive change expected in the adoption of AR in a firm's value chain is not adequate [Olsson et al. 2013]. In fact, even in developed and technologically advanced nations, AR technology adoption and usage for e-commerce are still in nascent stages [Tutunea 2013]. There is a practical need to investigate this topic of interest. Moreover, although the industry evolving around AR has been estimated at a volume of over $200 billion [Hyman 2013], this stream of research is quite miniscule in the field of information systems (IS) [Harborth 2017]. The bulk of AR research focuses on the technological aspects of AR with a limited focus on the behavioral aspects, which fall in the natural purview of IS research. …

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