Impact of Augmented Reality on Consumer Purchase Intention with the Mediating role of Customer Brand Engagement: Moderating role of Interactivity in Online Shopping

Full text

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
63
Impact of Augmented Reality on Consumer Purchase Intention with the
Mediating role of Customer Brand Engagement: Moderating role of
Interactivity in Online Shopping
Kashif Abrar
Bahria University, Pakistan
Abstract
Purpose: The association of augmented reality in developing customer brand engagement and purchase
intention is the most highlighted element of this study. The purpose of the study is to explore the impact of
augmented reality in the creation of customer brand engagement and purchase intention.
Methodology: In order to analyze the constructed hypotheses, the study focused on online survey strategy
through convenience data sampling technique. The prospective study analyzed path analysis of structural
equational modelling via AMOS and moderated regression analysis via SPSS-22. Questionnaires were
distributed among 490 respondents out of which 450 were in a useable form with a response rate of
91.8%.
Findings: Findings of the study indicated significant association of augmented reality with customer
brand engagement and purchase intention along with partial mediation and significant moderating
effects. The study also predicted that augmented reality applications and devices can be used as creative
tools for attracting customers and spreading awareness. The present study is limited to electronic
household equipment’s only and findings may be applicable in other sectors as well.
Originality: The current study examined role of interactivity as a moderator, finding that augmented
reality generally has a positive impact on customer brand awareness and purchase intention. This means
that augmented reality can enhance purchase intention if consumers have proficiency in using such
applications.
Keywords: Augmented reality, interactivity, customer brand engagement, purchase intention, online
shopping.
Introduction
In today’s business competitive environment, organizations are striving to discover innovative
ideas in order to support and promote their offerings. In spite of the undeniable fact of traditional
marketing to promote a product, it has gradually failed in meeting the prerequisites of the present markets.
Normally depending on customer loyalty, crusades utilizing conventional marketing practices have almost
failed in pulling audience they once did; in this way influencing professionals to confront a major
challenge (Reitmayr & Drummond, 2006). Particularly, the extension in the number of internet users
together with the increase in literacy levels have brought a constant change for the marketers in the digital
era with customers moving away from traditional media to digital media (Singh & Pandey, 2014).
Traditional media has suffered a great deal of loss due to lack of interest and resulted in a decrease of

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
64
brand equity along with purchase intention (Kenyon & Sen, 2012). Today’s era demands of digital
advertising in order to promote and make customer aware of an organization’s offering along with cost
effectiveness. Marketers are diverting their promotional endeavors from product features and advantages
to concentrating on the customer. Moreover, not all customers are indistinguishable; they have distinctive
statistic profiles, income levels, business necessities, and ways of making decisions which drive their
purchasing patterns. Currently, marketing channels are required to offer something beyond a single way
of communication, at the same time creating valuable and customer-specific data (Preece et al., 2015).
Acquiring such information should be possible from many sources including collection from both online
and offline sources, following recent purchases, gift registries, personal shopper files, responses from
quick response codes, digital channels brand engagement and many others. The reason for gathering
information builds upon the comprehension of individual choices and decisions, thus creating such
dynamic campaigns that match with every individual customer’s preference.
Beside the above arguments for a move towards new media, a nonstop two-route exchange of
data between the user and the essential issue of a communication framework is by all accounts of much
more noteworthy significance with regards to maintain customers. Interactivity, an element absent from
traditional promotion, offers the ability to expand promotional functions far ahead that conventional
promotion is able to accomplish (Li & Leckenby, 2007; Miles, 2007). Interactivity can provide a natural
method to deal with product assessment through the interface properties of 3D representation and when
combined with a real world environment it can actualize considerably greater range of potential outcomes
and applications (Schlosser, 2003).
Augmented reality (AR) has been developed as an interactive tool in the marketing context with
an increased set of use in retailing with the development of smart device applications. Augmented reality
has the ability to cover the physical environment with virtual features i.e. images and information capable
to interact with the physical environment in real time that provide further new opportunities for content
delivery to consumers. Augmented reality, as a result, has the ability to modify consumer activities which
includes product and information search (Javornik, 2016). As the use of augmented reality has increased
in the past few years, a need exists to better understand it’s applicability in consumer psychology. The
current study intends to provide an insight of consumer psychology under the light of augmented reality
with media characteristics i.e. by the use of technology. Technology is considered as a vital source of
improvement and has notably reformed online shopping practices of consumers and brand activities (Kim
& Peterson, 2017). The evolution of web 2.0 and 3.0 which possess an active participation in online
shopping, business to consumer and consumer to consumer interaction through social media forums with
an increased use of hand held devices. Challenges related to consumer reactions to more established
interactive advances drove the route to a rich assortment of research (Pagani & Mirabello, 2011; Sheth &
Solomon, 2014), the conceivable effect of rising AR innovation on consumers has just been discussed
about in not very many cases (Huang & Hsu Liu, 2014) and, moreover, no efficient research plan has
been proposed.
Augmented reality industry is growing rapidly with an estimated $56.8 billion of revenue to be
generated by 2020 (Markets and Markets, 2015). On the other hand, Fortune has predicted to generate
revenue of $200 billion by the end of 2020 (Gaudiosi, 2015). As AR technology is rapidly emerging,
there is a need to investigate its importance in consumer psychology. With this need, marketers can
identify the use of AR as an important tool in online shopping. Marketing industry has been continually
changing and adjusting to consumers' needs with a specific end goal to capture attention. Accordingly,
marketing is the most fundamental in relation to fruitful business. Augmented reality plays a specific

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
65
lively part in contemporary marketing. Assume pointing your smart mobile phone at a particular area that
triggers a 3-D video or looking through a webcam that enables you to add accessories to yourself
(Russell, 2012). The idea of augmented reality came into existence in the 1990’s; however this doesn't
imply that it has not shown itself some time before (Sung, 2011). Morton Helig in 1957 began to make
AR a reality by building a machine called Sensorama. The machine was made in 1962 but due to
excessively costly film, it could not make a public appearance. While relating this to AR it can be
observed that it could give the deception of reality utilizing diverse human sense. The machine offers a
multi-sensory condition, which enables users to encounter the vibe of sight, hearing, smell and even touch
(Mattes, 2013). It was capable to provide stereoscopic 3-D pictures in wide angle view, supply stereo
sound, give a moving seat that tilts at whatever point important and wind and fragrance will likewise be
activated amid the film by looking through binoculars with films inside (Mattes, 2013). Proceeding
onward, the genuine AR term was designed by Tom Caudell, a Boeing analyst was the first to portray it
utilizing a computerized show normally utilized as a part of flying machines; it at that point mixes the
virtual illustrations into physical reality (Cassella, 2009). In today's computerized world, augmented
reality has been characterized in a more detailed way where "augmented reality is the communication of
superimposed graphics, sound and other sense upgrades over a real-world environment that is shown
continuously and in real-time” (Peddie, 2013).
Problem Statement
As discussed above, in pursuit for more unique and innovative approaches to capture customer's
attention, many brands have understood the capability of AR and have received it as a major aspect of
their promotional efforts. This innovation gives an engaging visualization experience by intensifying
user’s impressions. Information generated from computer is perceived by the user in real-time in a real
environment. This mix of real and computer created imagery has been found to enhance human
perception and to enhance understanding of complex 3D situations while enhancing and enhancing
importance and engagement for the user. The vast majority promotional campaigns, that are already
effectively connected with technology, depend on an experiential approach which centers on a brand's
offerings (products and services), as well as an entire experience developed especially for the consumer
(Yuan & Wu, 2008). Brand experiences are sensations, emotions, and behavioral reactions evoked by
brand-related stimuli that are a piece of a brand's plan and personality, packaging, communications, and
environments which highly influence purchase decisions.
The focal issue for this study is about the reality that it is indistinct whether an AR framework is
additionally convincing for brand image which can further result in purchasing intention with the
moderating effect of interactivity (communication, control and responsiveness). In order to further
undergo, the independent variable i.e. augmented reality and the dependent variable i.e. purchase
intention have been analyzed through brand image as a mediator while interactivity (communication,
control and responsiveness) as moderator between the independent and mediating variable.
Research Objectives
Specifically, the present study addresses following research objectives:

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
66
 To explore the relationship between augmented reality and customer brand engagement.
 To explore the relationship between augmented reality and purchase intention.
 To explore the relationship between customer brand engagement and purchase intention.
 To explore the relationship of interactivity (communication, control and responsiveness) between
augmented reality and brand image.
Research Questions
Specifically, the present study addresses following research questions:
 What is the influence of augmented reality on customer brand engagement and purchase intention
among online consumers of Pakistan?
 How does interactivity (communication, control and responsiveness) moderate the effect of
augmented reality and customer brand engagement among online consumers of Pakistan?
Significance
The present study takes on an empirical perspective on the role of augmented reality on purchase
intention from perspective of online consumers of Pakistan. Furthermore, the study has also focused on
the moderating role of interactivity (communication, control and responsiveness) with the mediating role
of brand image. The current study intends to provide an understanding of the enhancement of purchase
intention via augmented reality with the involvement of brand image and media characteristics which is
of significant importance in online shopping. Limited research work has been done on augmented reality
in marketing context. Therefore, the present study serves as a reference material and future guideline for
upcoming studies. This study might be useful for the enhancement of augmented reality in the entire
electronic equipment sector to get insights of how purchase intention is influenced by augmented reality.
Literature Review
Augmented Reality
Augmented reality is an interactive mode of technology that adjusts physical environment with
superimposed virtual components. The virtual layer which is placed between the physical situations and
the user can include textual information, pictures, recordings or other virtual things to the individual's
viewing of physical environment. The gadgets that empower such superimposition can be cell phones or
tablets, wearables (head-mounted presentations), fixed interactive screens or projectors (Carmigniani et
al., 2011). AR technology has been examined to a great extent in the field of computer technology and
human–computer communication. The definition of AR by Azuma et al. (2001), perceived as the most
acknowledged one, emphasizes on not just the co-existence of virtual and genuine in a similar space, but
also interactive alignment and common enlistment of computer produced sources with physical reality. It
underlines the embeddedness of AR progressively (deviating from virtual reality) and its interactive
element. AR devices hold a key advantage as they are portable and wearable and are almost mobile in a

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
67
manner (Reitmayr & Drummond, 2006). This advantage applies only to a few devices as others are fixed
devices that are incapable of mobility (Van Krevelen & Poelman, 2010; Preece et al., 2015).
Recently, brands have been utilizing and testing different AR applications in various contexts to
inspect the most suitable settings for their utilization. Up until this point, AR has utilized smart gadgets
and expansive intuitive screens, either secretly or openly in retail is among the most common ones
(Javornik, 2014). AR applications on smart gadgets enable consumers to see a virtual item arranged in the
environment, (for example, a virtual furniture in a physical room) or to get to extra computerized content
by examining an item's logo or a related picture, (for example, a filtered magazine's promotion that
changes into a video on a tablet's screen). Subsequently, large interactive screens can present a larger
piece of the physical environment on the screen, to which the virtual components are included (for
example an AR setup in a shopping center with a motivation behind raising awareness about endangered
species, that was displayed on a large screen the undermined creatures that appeared to be strolling
around the shopping center like a part of that specific environment). Moreover, AR applications permit
likewise growth of an item, for the most part by filtering an item or product with a smart gadget that
would be able to envision an improved view. A few cases of such applications are for example those that
provide extra information of items on a rack, demonstrate reviews specifically connected to the items,
change the appearance or colors of the product on a screen or add gaming components. At long last, some
applications allow an augmentation of an encompassing space with virtual components. That is utilized
for perceiving how an item would look like in a specific environment (for example a specific color of
furniture would look like in a room) or for getting extra substance about surrounding space (for example
the screen appears on the camera perspective of the road where an adjacent coffee point is and which
stores have a deal).
With respect to the above arguments, AR technology is now used to create awareness in the general
public. AR technology can help boost sales and create a brand engagement. Therefore, it is hypothesized:
H1: Augmented reality has a positive impact on customer brand engagement.
H2: Augmented reality has a positive impact on purchase intention.
Customer Brand Engagement as a Mediator
Consumers that shop online have an increased commitment with a brand (Kim et al., 2008) and
are indirectly involved in the failures and success of that specific brand (Ashforth & Mael, 1989). It can
be assumed that customers involved in online shopping tend to have a positive and optimistic attitude
towards a brand (Writz et al., 2013). Surprisingly, a consumer’s brand engagement not only increases
their overall brand engagement but can help increase organizations sales as well. Customer brand
engagement has its roots deeply associated with relationship marketing that emphasizes the idea or
interaction and customer experiences (Vivek et al., 2012). As per Mollen and Wilson (2010) customer
brand engagement is defined as the affective and cognitive commitment of an active relation with a
specific brand via a website or computer mediated devices designed to communicate brand value. Brand
engagement captures a collaborative association with a specific brand furthermore, requires the view of
experiential incentive notwithstanding instrumental incentive to be obtained from communications with
the brand.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
68
According to customers, they only get involved with a brand only when their needs, wants and
the price paid are fulfilled by any specific brand. Consumer brand engagement is perceived to be
positively and directly associated to brand relationships and the intention to purchase a specific times
(Brodie et al., 2011). It is an understood fact that if consumer’s online shopping creates value and actually
get the item or product as mentioned in the advertisement will create value, which can further increase
trust in that specific website and increase purchase intention in future. On the other hand, strategic moves
asserting to up bring customer brand engagement levels are most likely to increase customer loyalty
programs (Hollebeek, 2011). Stronger brand engagement can lead to strong relationships in the form of
membership, allowances, and discounts and further other offers to such consumers that in turn results in
purchasing intention of a specific brand in future (Algesheimer et al., 2010). This has also been supported
by Chiou et al. (2010) who stated that word of mouth can increase and have a direct impact on purchase
intention. Thus, it is hypothesized that:
H3: Customer brand engagement has a positive association with purchase intention.
Interactivity as a Moderator
Newhagen et al., (1995) were the first to introduce interactivity. Interactivity was viewed by them
as a psychological factor in email messages of a viewer. In their study, interactivity was based on efficacy
which is based on two constructs i.e. the psychological sense of efficacy by viewer and the sense of media
device by the viewer. Interactivity is mostly interrelated to the sender’s beliefs that the retailer could
process the message into a valuable input and then act on the query in any manner. Later on, Wu (1999)
applied these two elements of efficacy to internet users by renaming them into internal and external based
system efficacy. Wu (1999) suggested that internal based system efficacy can be translated into internet
users where they are going and where they are. Interestingly, externally based system efficacy can be
portrayed into users' feeling of how responsive a website is.
Previous studies have also identified a new dimension of interactivity known as communication
which is defined as the medium through which users believes that a website have a two way
communication facility (Song & Zinkhan, 2008). A few studies have analyzed interactivity on a website
with availability and unavailability. Therefore, if a website has options i.e. search options, background
colors (some colors might be disturbing for a user) than another website, the first one is said to have a
higher degree of interactivity. Online shopping should have these features in order to make a purchase
successful. It can also instill confidence in the customers and the customers almost have an intention to
purchase in future and refer the website to friends, peers and community.
The current study has presented interactivity as a moderator between augmented reality and
customer brand engagement. Generally, whenever the customer finds a website interactive and user
friendly, it can strengthen brand engagement interacting via any smart device or application. Literacy
stands a factor in order to interact with such devices and applications. As most of the devices and
applications available are compatible but demand the user to be a literate one. Therefore, it is
hypothesized that:
H4: Interactivity moderates the relationship of augmented reality and customer brand engagement.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
69
Purchase Intention
Purchase intention is a type of commitment to one’s self to buy or purchase a product again
whenever needed or intend to shop (Halim & Hameed, 2005; Fandos & Flavian, 2006). It holds an
important place because organizations intend to increase sales of a specific brand or product in order to
earn a lump sum amount of profit. Purchase intention relies on a number of factors such as customer
satisfaction, loyalty and retention. A brand has certain features or advantages that instill intention to
purchase in customer. These features include the image of the brand, quality, and knowledge of the
product, product involvement and attributes. Current study intends to show whether augmented reality
can enhance purchasing behavior in online shopping and also reveals the important aspects such as
knowhow of smart applications and devices which is quite necessary to build brand engagement.
Consumers purchase intentions are mostly affected by word of mouth (Kenyon & Sen, 2012) whether it is
a negative or positive one. In order to make a purchase, it is an understood fact that consumers will
undergo a research phase in order to grab the best deal (Horn & Salvendy, 2006). In the process of search,
the consumer will review different aspects of the product i.e. price, performance, reliability, durability
and certain other elements before placing an order.
The unidimensionalist view of attitude, purchase intention is the result of an attitude that refers
the willingness of a customer to make a purchase from any specific retailer (Kimery & McCord, 2002).
Despite the fact that the genuine buying attitude is impressively fascinating for the marketing researcher,
purchase intention is broadly utilized as the representation of the actual purchase conduct particularly in
consumer behavior studies since it is neither impossible nor practical in order to experimentally undergo
the actual purchase conduct (Reibstein, 2002). Online shopping is gaining fame in Pakistan as customers
can get detailed information about the product which in Pakistan cannot be easily provided by the retailer.
Youngsters in Pakistan are almost shifting trends from traditional shopping to online shopping as it is
quite reliable mode of purchase. Marketing managers are mostly concerned about purchasing intentions as
this helps them in predicting sales. The data can also help managers to make further best decision to their
top product demand and promotional strategies.
Theoretical Framework
Figure 1: Model of the study

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
70
Methodology
The study followed positivist paradigm, deductive approach and quantitative techniques as
adopted by few other studies in the similar domain (Brodie et al., 2011). Data was collected at one point
in time. Therefore, time horizon was cross sectional.
Population
The purpose of study was to examine the influence of augmented reality on customer brand
engagement and purchase intention of online consumers of Pakistan. Hence keeping the purpose of study
in view, population was carefully selected. Target population for the study was online buyers of electronic
equipment or appliances in Pakistan. Data was collected from students and faculty members of several
public and private sector universities of Pakistan who had experience of buying electronic equipment
online. Data was collected as per the ease of the researchers.
Sample size and sampling technique
For research in business, sample size of 30 to 500 is considered enough (Wright & Crimp, 1995).
Considering comprehensiveness of results as well as time and budget constraints, the sample size
determined for this study was 450. In order to ensure representation of multiple cities Pakistan, responses
were collected from online consumers belonging to different cities. Convenience sampling technique was
used for identification of sample.
Instrument
For the purpose of data collection, a 48 items questionnaire was prepared using scales for
measuring selected variables adapted from reliable and validated sources (refer to Table 1). 7 questions
were related to demographic information including age, gender, qualification, income level, employment,
marital status and buyer of which category of electronic equipment. 41 items were adapted from
established scales to measure independent and dependent variables.
Data collection method
Data for the present study was collected using an online questionnaire distributed through
convenience sampling technique on Facebook and Google groups. Groups representing different brands
were considered for data collection. Web survey approach was selected for gathering responses since it is
better than many conventional methods in terms of saving time and cost. The nature of this study also
made it feasible to opt for web survey. Online questionnaire was posted on Facebook and Google groups
and members of these groups were invited to fill the questionnaire through private messages as well until
450 useable responses were collected. Participation in the online survey was voluntary and no monetary
or non-monetary benefits were offered. Participants were able to fill the questionnaire only once and no
changes were allowed to be made in their response after submitting the form online.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
71
Measurements
Table 1 shows number of items for measuring each variable and sources of these items and which
recent studies have validated these scales. The variables were accounted for by using 5-Point Likert scale
indicating: 1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4 = Agree and 5 = Strongly Agree.
The data was analyzed through frequency distribution, reliability analysis, correlation, moderated
regression and structural equational modelling through path diagram. Most of the data was analyzed in
SPSS version 22 except path analysis in AMOS version 22.
Table 1: Variables, no. of items and sources and recent validation
Variable
No. of Items
Items Source
Augmented reality
7
Bulearca & Tamarjan (2010)
Customer Brand Engagement
10
Hollebeek et al. (2014)
Purchase Intention
3
Augusto de Matos et al. (2007)
Interactivity
21
Liu, (2003); McMillan &
Hwang (2002); Wu, (1999)
Results
Demographics
Demographics indicate questionnaires were distributed between both the genders consisting of
67.8% males and 32.2% females of the total sample respectively. Most of the respondent’s age comprised
of 26-30 years with a total sample of 28.2% while 21-25 years with a 24% while 16-20 years with a total
sample of 22.7% of the sample while 31-35 years with a 14.2% of total sample while 36-40 years with a
total sample of 8.4% and 41 years and above with a total sample of 2.4% respectively. 39.1% of the
sample consisted of MS/M.Phil. degree holders, 22% were Master’s degree holders, 19.6% were graduate
degree holders, 12.4% were at intermediate level and 6.9% of the sample comprised of doctorate degree
holders. Most of the sample’s income comprised of a salary of 32.2% between PKR 26,000-50,000 while
30.2% of the sample’s salary comprised of less than PKR 25,000. 24.4% of the sample’s salary comprised
between PKR 51,000-75,000 while 8.4% of the sample’s salary comprised between PKR 76,000 to
100,000 and 4.7% of the sample’s salary was above PKR 100,000 respectively. 58% of the sample was
full time employed while 22.6% of the sample was studying while only 14.7% of the sample was self-
employed and 2.7% of the total sample was part time employed and 2.4% of the sample was unemployed.
52.7% of the sample was unmarried while 47.1% of the sample was married and 0.2% of the sample was
separated respectively. 30.2% of the sample was cell phone buyers via online shopping while 23.1% of
the sample was gaming consoles and TV (LED’s) buyers while 13.3% of the sample were cell phone
buyer and 10.2% of the sample were buyers of other electronic appliances.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
72
Table 2: Reliability
Variables
Cronbach’s Alpha
No. of Items
Augmented reality
.662
7
Customer Brand Engagement
.836
10
Purchase intention
.746
3
Interactivity
.675
21
Table 2 indicates the reliability analysis for augmented reality, customer brand engagement,
purchase intention and interactivity. The reliability of augmented reality is .662 for 7 items; customer
brand engagement is .836 with 10 items, while the reliability for purchase intention and interactivity is
.746 and .675 with 3 and 21 items respectively. The reliability of communication and responsiveness is
below default value which is .5, although weak but still acceptable. The reliability default value should be
above 0.5 which indicates an average reliability, 0.6 indicates better reliability, 0.7 indicates good
reliability, 0.8 indicates best reliability and 0.9 or above indicates excellent reliability respectively. The
value of reliability should be above -1 and below 1 (Gliem & Gleim 2003).
Table 3: Correlation
Variables
AR
PI
CBE
I
AR
1
-
-
-
PI
Sig.
.462**
.000
1
-
-
CBE
Sig.
.623**
.000
.667**
.000
1
-
I
Sig.
.693**
.000
.611**
.000
.647**
.000
1
** Correlation is significant at 0.01 level
Table 3 indicates that a significant relationship exists between purchase intention and augmented
reality possessing a positive relationship of .462 at 0.000 level, a positively significant relationship of
.623 at .000 level exists between customer brand engagement and augmented reality exists while a
positive relation of .667 with purchase intention statistically significant at .000 level respectively. A
positively significant relationship of .693 at .000 level exists between interactivity and augmented reality,
a positively significant relationship of .611 at .000 exists with purchase intention and .647 statistically
significant at .000 relationship exists with customer brand engagement respectively.
The default value of relationship should range from 0 to 1. In case the value is below 0, this
indicates a negative relationship. On the other hand, significance default value is 0.05. If the value
exceeds the figure, insignificant association may be reported and vice versa.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
73
Figure 2: Path diagram through SEM (Impact of augmented reality on purchase intention with the
mediating role of customer brand engagement cognitive processing)
Table 4: Analysis of path diagram through SEM
Variables
β
R2
Sig.
*AR => PI
.623
.008
**AR => PI
.075
.449
.093
***AR => CBE => PI
.620
.388
.000
*Total Effect
**Direct Effect
***Indirect Effect
Table 4 depicts that augmented reality has a positively significant total and indirect effect on
purchase intention of .623 and .620 with R2 indirect value of .388 statistically significant at .008 and .000
which proves partial mediation while a direct effect of .075 with R2 value of .449 statistically insignificant
at .093 level respectively which proves full mediation. The R2 of direct and indirect effect indicates the
effectiveness of the model, thus accepting the proposed hypothesis respectively. Thus the analysis proves
a partial mediation
Table 5: Moderated regression - Impact of interactivity (as a moderator) between augmented reality and
customer brand engagement
Variables
DV
β
R2
Δ R2
Sig.
AR
CBE
.363
.388
.386
.000
Interactivity
.736
.477
.475
.000
Table 5 indicates the effect of moderator i.e. interactivity on augmented reality and customer
brand engagement. Interactivity has an effect of .736 which is statistically significant at .000 level
between augmented reality and customer brand engagement. The results and significance indicates a clear

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
74
moderation of interactivity on augmented reality and customer brand engagement. As mentioned
previously, that significant value that exceeds 0.05 proves insignificance while below states significance
(Hayes, 2013).
Discussion
The results have proved that augmented reality highly effects customer brand engagement and
purchase intention, but it is of vital concern to arouse the antecedents of augmented reality. The present
study examines the usage of online shopping of electronic appliances in the creation of purchase intention
by augmented reality devices and applications. The findings demonstrate that augmented reality devices
and applications has a substantial effect on customer brand engagement and purchase intention while
results indicates that interactivity moderates between augmented reality and customer brand engagement
respectively. It is an understood fact, that when smart devices and applications were not available,
consumers still possessed intention to purchase via customer to customer interaction or reviewing
information online.
Numerous studies are available on the importance of purchase intention in marketing genre, while
a lot are currently introducing new phenomenon and theories that can lead towards effective customer
relationship building techniques (Laroche et al., 2013) and how these issues effect purchase intention (Lu
et al., 2015). In this scenario, a great need for the influence of augmented reality on the creation of
customer brand engagement and purchase decision is developing (Javornik, 2016). The proposed study is
a mere attempt to fill this gap (Javornik, 2014; Javornik, 2016). Furthermore, there is a need to develop
measurement scales for augmented reality (Scholz & Smith, 2016; Yaoyuneyong et al., 2016) while the
scales for customer brand engagement, purchase intention and interactivity are already available in the
marketing literature. The current study has already utilized all these scales and stands close to the
reliabilities with the previous (Wu, 1999; McMillan & Hwang, 2002; Liu, 2003; De Matos et al., 2007;
Bulearca & Tamarjan, 2010; Hollebeek et al., 2014).
The current study has explored that augmented reality have a statistically significant impact on
customer brand engagement and purchase intention. If the consumer is literate enough to interact online
via smart devices and applications, it is generally understood that the customer can discover the pros and
cons of any item before making a purchase by reviewing information, specifications which in turn will
influence engagement with a brand and increase purchase intention or vice versa. Similarly, augmented
reality does not limit customer brand engagement and purchase intention. Furthermore, if a customer does
not have adequate knowledge or familiar with the usage of smart devices and applications and does not
possess enough skills for interaction, cannot influence purchasing decision and vice versa. On the other
hand, interactivity was used a moderator between the predictor and outcome variable i.e. augmented
reality and customer brand engagement of the study. Interactivity moderates the relationship between
augmented reality and consumer brand engagement.
Conclusion
The present study demonstrated the role of augmented reality in building up the view of purchase
intention as hallowed substances in the minds of online consumers and its impact on customer brand
engagement. To this end, the present study used two indicators as a mediator and moderator i.e. consumer

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
75
brand engagement and interactivity to examine whether these two can in some manner effect the
relationship of augmented reality and purchase intention. It is found that augmented reality impacts
consumer brand engagement and purchase intention, while interactivity control and responsiveness does
not statistically significantly moderate the relationship of augmented reality and consumer brand affection
and activation affect brand love or attachment.
It is understood from the results that augmented reality can effect consumer brand engagement
and further enhance purchase intention as customer can get an insight of a product the brand offers with
full reviews, dimensions, advantages, uses and disadvantages as well. The customer needs to be literate
enough to handle with smart devices and applications. As smart devices and applications are user friendly
and compatible, one does not find difficulty in developing a familiarity.
As the moderating effect of interactivity, two dimensions (i.e. control and responsiveness) out of
three do not moderate between augmented reality and consumer brand engagement. It is an understood
fact that the customer cannot control the amount of information or reviews about a specific brand or a
product. Neither the customer can change the information currently displayed or design any product of a
specific brand according to their need. On the other hand, responsiveness can also not be controlled as
this is an element strictly organization related, therefore response for customer queries still stand at large.
Managerial Implications
Today’s world has changed a lot due to technological innovations making almost everything
possible which seemed impossible in the past. Every field has evolved with the passage of time.
Nevertheless, marketing has also evolved with the passage of time. Technology has gained a huge
importance and holds quite an important place in an individual’s life. A lot of discussion these days is
taking place in organizations regarding the importance of utilizing technology and promoting
organizational offering in marketing paradigm (Laroche et al., 2013) and how social technology
influences customer buying intention towards a specific brand (Wang et al., 2015). In this specific
situation, there is desperate need to investigate the different means of technological innovation that can
impact purchasing decisions (Saboo et al., 2015). Additionally, Javornik (2016) undersigned the need of
technological innovation i.e. augmented reality to comprehend the improvement of brands. The current
study's model in this manner is an experimental endeavor to satisfy these gaps in the literature
(Carmigniani et al., 2011; Javornik, 2014; Javornik, 2016).
Augmented reality plays an influential role in customer’s buying intention especially the literate
one’s (Song & Zinkhan, 2008). The study has proved and suggests a strategic move for brands
repositioning via technological innovations that were experiencing minimized sales due to fierce
competition. Repositioning brands can help organizations to gain a fair market share and earn a lump sum
amount of profit. Such activities cannot only influence online shopping behaviors but can further create a
word of mouth promotional technique. Previous literature has shown positive results of augmented reality
on purchase intention (Rese et al., 2014; Jung et al., 2015). Policy makers and marketers should focus and
adopt new technological innovations as literate customer’s mostly prefer to surf and shop on these.
Marketing managers ought to construct such strategies that can easily grasp customers for their
businesses in order to earn a profitable market share. Managers should be active on the social media and
respond to customer queries through a team of social media experts. It is a general understanding, that
whenever a customer’s query is answered in a satisfying manner, the customer will not only make the

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
76
purchase but will recommend friends and peers for the consumption of that specific product. In this
regard, the customer will generate a business for the organization and can also interact and introduce
business offerings on the social media to the general population. On social media, most of the reviews
available are generally customer written which instills confidence in new customers to consume that
product. Such strategies will enable organizations to compete in the market for a long time.
Limitations and Directions for Future Research
The framework used in this study was tested through a self-administered questionnaire. Biased
reviews might have been recorded by few respondents (Tax et al., 1998). In this case some additional
surveys should be conducted in order to overcome unfairness. The sampling frame of the current study
involved shoppers of electronic items in Pakistan. The results of this study cannot be generalized to other
sectors or other services. Convenience sampling of the non-probability sampling technique was used
rather than probability sampling. The sampling frame indicates typical electronic appliances users in
Pakistan. Although this limits the researchers to generalize their findings, it is recommended to carry out
probability sampling technique in order to improve the validity of the present research findings.
Nevertheless, the role of interactivity has been used as a moderator between the independent and
mediator variables which mostly proved insignificant. Therefore certain other indicators i.e. familiarity
can be used as a moderator in future studies. Several other factors can be used between augmented reality
and consumer brand engagement which can indicate what factors lead in enhancing purchase intention.
As in the case of this study, the hypothesis generated in the study were accepted while a few rejected but
may vary in other sectors. It is believed that future studies which address these limitations can easily
develop more insight understanding of augmented reality with other determinants as very limited studies
are available in this context.
References
Algesheimer, R., Borle, S., Dholakia, U. M., & Singh, S. S. (2010). The impact of customer community
participation on customer behaviors: An empirical investigation. Marketing Science, 29(4), 756-769.
Ashforth, B. E., & Mael, F. (1989). Social identity theory and the organization. Academy of management review,
14(1), 20-39.
Augusto de Matos, C., Trindade Ituassu, C., & Vargas Rossi, C. A. (2007). Consumer attitudes toward counterfeits:
a review and extension. Journal of consumer Marketing, 24(1), 36-47.
Azuma, R., Baillot, Y., Behringer, R., Feiner, S., Julier, S., & MacIntyre, B. (2001). Recent advances in augmented
reality. IEEE computer graphics and applications, 21(6), 34-47.
Brodie, R. J., Ilic, A., Juric, B., & Hollebeek, L. (2013). Consumer engagement in a virtual brand community: An
exploratory analysis. Journal of business research, 66(1), 105-114.
Bulearca, M., & Tamarjan, D. (2010). Augmented reality: A sustainable marketing tool. Global business and
management research: An international journal, 2(2), 237-252.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
77
Carmigniani, J., Furht, B., Anisetti, M., Ceravolo, P., Damiani, E., & Ivkovic, M. (2011). Augmented reality
technologies, systems and applications. Multimedia Tools and Applications, 51(1), 341-377.
Cassella, D. (2009). What Is Augmented Reality (AR): Augmented Reality Defined, IPhone Augmented reality
Apps, Games and More. from http://www.digitaltrends.com/-mobile/what-is-augmented-reality-iphone-
apps-games-flash-yelp-android-ar-software-and-more/
Chiou, W.-C., Lin, C.-C., & Perng, C. (2010). A strategic framework for website evaluation based on a review of the
literature from 1995–2006. Information & management, 47(5), 282-290.
Fandos, C., & Flavian, C. (2006). Intrinsic and extrinsic quality attributes, loyalty and buying intention: an analysis
for a PDO product. British food journal, 108(8), 646-662.
Gaudiosi, J. (2015). How augmented reality and virtual reality will generate $150 billion in revenue by 2020. from
http://fortune.com/2015/04/25/augmented-reality-virtual-reality
Gliem, J. A., & Gliem, R. R. (2003). Calculating, interpreting, and reporting Cronbach’s alpha reliability
coefficient for Likert-type scales.
Halim, W. Z. W., & Hamed, A. B. (2005). Consumer purchase intention at traditional restaurant and fast food
restaurant. Paper presented at the Proceedings of the Australian and New Zealand Marketing Academy
(ANZMAC) Conference, Australia.
Hayes, A. F. (2013). Introduction to mediation, moderation, and conditional process analysis: A regression-based
approach: Guilford Press.
Hollebeek, L. D. (2011). Demystifying customer brand engagement: Exploring the loyalty nexus. Journal of
Marketing Management, 27(7-8), 785-807.
Hollebeek, L. D., Glynn, M. S., & Brodie, R. J. (2014). Consumer brand engagement in social media:
Conceptualization, scale development and validation. Journal of Interactive Marketing, 28(2), 149-165.
Horn, D., & Salvendy, G. (2006). Consumer‐based assessment of product creativity: A review and reappraisal.
Human Factors and Ergonomics in Manufacturing & Service Industries, 16(2), 155-175.
Huang, T.-L., & Hsu Liu, F. (2014). Formation of augmented-reality interactive technology's persuasive effects
from the perspective of experiential value. Internet Research, 24(1), 82-109.
Javornik, A. (2014). [Poster] classifications of augmented reality uses in marketing. Paper presented at the Mixed
and Augmented Reality-Media, Art, Social Science, Humanities and Design (ISMAR-MASH'D), 2014
IEEE International Symposium on.
Javornik, A. (2016). Augmented reality: Research agenda for studying the impact of its media characteristics on
consumer behaviour. Journal of Retailing and Consumer Services, 30, 252-261.
Jung, T., Chung, N., & Leue, M. C. (2015). The determinants of recommendations to use augmented reality
technologies: The case of a Korean theme park. Tourism management, 49, 75-86.
Kenyon, G., & Sen, K. (2012). A model for assessing consumer perceptions of quality. International Journal of
Quality and Service Sciences, 4(2), 175-188.
Kim, J. W., Choi, J., Qualls, W., & Han, K. (2008). It takes a marketplace community to raise brand commitment:
the role of online communities. Journal of Marketing Management, 24(3-4), 409-431.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
78
Kim, Y., & Peterson, R. A. (2017). A Meta-analysis of Online Trust Relationships in E-commerce. Journal of
Interactive Marketing, 38, 44-54.
Kimery, K. M., & McCord, M. (2002). Third-party assurances: Mapping the road to trust in e-retailing. JITTA:
Journal of Information Technology Theory and Application, 4(2), 63.
Laroche, M., Habibi, M. R., & Richard, M.-O. (2013). To be or not to be in social media: How brand loyalty is
affected by social media? International Journal of Information Management, 33(1), 76-82.
Li, H., & Leckenby, J. D. (2007). Examining the effectiveness of internet advertising formats. Internet advertising:
theory and research, 203.
Liu, Y. (2003). Developing a scale to measure the interactivity of websites. Journal of advertising research, 43(2),
207-216.
Lu, B., Fan, W., & Zhou, M. (2016). Social presence, trust, and social commerce purchase intention: an empirical
research. Computers in Human Behavior, 56, 225-237.
MarketsandMarkets. (2015). Augmented Reality Market worth 56.8 Billion USD by 2020. from
http://www.marketsandmarkets.com/PressReleases/augmented-reality.asp
Mattes, S. (2013). Sensorama. from http://smattes.-com/article/47/sensorama
McMillan, S. J., & Hwang, J.-S. (2002). Measures of perceived interactivity: An exploration of the role of direction
of communication, user control, and time in shaping perceptions of interactivity. Journal of advertising,
31(3), 29-42.
Miles, C. (2007). A cybernetic communication model for advertising. Marketing Theory, 7(4), 307-334.
Mollen, A., & Wilson, H. (2010). Engagement, telepresence and interactivity in online consumer experience:
Reconciling scholastic and managerial perspectives. Journal of business research, 63(9), 919-925.
Newhagen, J. E., Cordes, J. W., & Levy, M. R. (1995). Nightly@ nbc. com: Audience scope and the perception of
interactivity in viewer mail on the Internet. Journal of communication, 45(3), 164-175.
Pagani, M., & Mirabello, A. (2011). The influence of personal and social-interactive engagement in social TV web
sites. International Journal of Electronic Commerce, 16(2), 41-68.
Peddie, J. (2013). Augmented Reality still casting about for the right model. from
http://gfxspeak.com/2013/10/29/augmented-realitystill-casting-about-for-the-right-model/
Reibstein, D. J. (2002). What attracts customers to online stores, and what keeps them coming back? Journal of the
academy of Marketing Science, 30(4), 465-473.
Rese, A., Schreiber, S., & Baier, D. (2014). Technology acceptance modeling of augmented reality at the point of
sale: Can surveys be replaced by an analysis of online reviews? Journal of Retailing and Consumer
Services, 21(5), 869-876.
Russell, M. (2012). 11 Amazing Augmented Reality Ads. from http://www.businessinsider.-com/11-amazing-
augmented-reality-ads-2012-1?IR-=T&op=1
Saboo, A. R., Kumar, V., & Ramani, G. (2016). Evaluating the impact of social media activities on human brand
sales. International Journal of Research in Marketing, 33(3), 524-541.

Bahria University Journal of Management & Technology: Vol.1, No.2 pp. 64-80
79
Sarkar, J. G., Sarkar, A., & Ponnam, A. (2015). Exploration of brand sacralization among the young adult
consumers in the context of emerging Asian market. Young Consumers, 16(3), 264-280.
Scholz, J., & Smith, A. N. (2016). Augmented reality: Designing immersive experiences that maximize consumer
engagement. Business Horizons, 59(2), 149-161.
Sheth, J. N., & Solomon, M. R. (2014). Extending the extended self in a digital world. Journal of Marketing Theory
and Practice, 22(2), 123-132.
Song, J. H., & Zinkhan, G. M. (2008). Determinants of perceived web site interactivity. Journal of marketing, 72(2),
99-113.
Sung, D. (2015). The history of augmented reality., from http://www.pocketlint.com/news/-108888-the-history-of-
augmented-reality
Vivek, S. D., Beatty, S. E., & Morgan, R. M. (2012). Customer engagement: Exploring customer relationships
beyond purchase. Journal of Marketing Theory and Practice, 20(2), 122-146.
Wirtz, J., Den Ambtman, A., Bloemer, J., Horváth, C., Ramaseshan, B., Van De Klundert, J., . . . Kandampully, J.
(2013). Managing brands and customer engagement in online brand communities. Journal of Service
Management, 24(3), 223-244.
Wright, L. T., & Crimp, M. (1995). The marketing research process. Prentice Hall.
Wu, G. (1999). Perceived interactivity and attitude toward web sites. Paper presented at the Proceedings of the
conference-American Academy of Advertising.
Yaoyuneyong, G., Foster, J., Johnson, E., & Johnson, D. (2016). Augmented reality marketing: Consumer
preferences and attitudes toward hypermedia print ads. Journal of Interactive Advertising, 16(1), 16-30.
Yuan, Y.-H. E., & Wu, C. K. (2008). Relationships among experiential marketing, experiential value, and customer
satisfaction. Journal of Hospitality & Tourism Research, 32(3), 387-410.