Augmented reality and spatial fit uncertainty in online retailing

Augmented Reality (AR) is an emerging technology in e-commerce that facilitates online product evaluation. It enables consumers to project virtual product models into their real-world surroundings in real time using their mobile devices. By improving online product evaluation, AR has the potential to reduce online consumer product uncertainty and thereby increase e-commerce sales. This paper investigates the effectiveness of AR enablement in reducing spatial product fit uncertainty by analyzing a unique dataset of online purchases of AR-enabled and non-AR-enabled products from a multi-channel home interior retailer. The authors' identification strategy exploits a pandemic-related shutdown of offline retail stores to isolate the effect of AR enablement on online sales when the offline channel is unavailable for product evaluation. The authors find that AR enablement can be particularly effective for evaluating and selling larger products, which are associated with higher spatial fit uncertainty. The authors derive channel-related implications for retailers deploying AR and contribute to retail and consumer research by enhancing the nuanced understanding of online consumer behavior when interacting with a new digital technology.