Enhancing customer value co-creation in the beauty industry through augmented reality (ar) technology

Abstract

The rise of technology has spurred a surge in online shopping globally, including in Vietnam. While convenience is a major draw, the inability to physically try on beauty products remains a significant barrier for many consumers. This is where virtual try-on technology powered by augmented reality (AR) could offer a promising solution. This study aims to understand the influence of AR attributes, namely interactivity, vividness, novelty, and personalization, on consumers’ experiential values like hedonic value and utilitarian value and value co-creation within the e-commerce landscape, online cosmetics shopping platforms that leverage AR technology. The design of this research model follows the Stimulus, Organism, Response (SOR) theory (Mehrabian & Russell, 1974). In addition to identifying the roles of the variables in the SOR model, the moderating variable of Privacy Concerns is also considered in the relationship between experiential values and Customer Engagement and Brand Loyalty. By using the convenience sampling method, a survey was conducted with 378 participants who have experienced AR technology integrated into online cosmetics shopping platforms. Utilizing the Partial Least Squares Structural Equation Model (PLS-SEM), the authors analyze quantitative data, evaluate measurement scales, and test hypotheses. Results of the study show that most hypotheses are accepted, except Privacy Concerns as a moderator. Particularly, the AR characteristics (S) collectively influence experiential values (O), and these values eventually influence customer engagement, brand loyalty and value co-creation (R). This suggests that the relationship between experiential values and Customer Engagement and Brand Loyalty may be even stronger than anticipated, since it is not significantly affected by Privacy Concerns. As a novelty, our findings contribute to extending SOR theory to the context of AR characteristics and value co-creation. The results of this research are also expected to be used by e-commerce service providers and AR developers to personalize online cosmetics shopping experiences based on user preferences, ultimately leading to a more enjoyable and convenient shopping journey for users.