The Reality of Virtuality: Harness the Power of Virtual Reality to Connect with Consumers 3110992701, 9783110992700

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Kirsten Cowan, Seth Ketron, Alena Kostyk The Reality of Virtuality

Kirsten Cowan, Seth Ketron, Alena Kostyk

The Reality of Virtuality Harness the Power of Virtual Reality to Connect with Consumers

ISBN 978-3-11-099270-0 e-ISBN (PDF) 978-3-11-098056-1 e-ISBN (EPUB) 978-3-11-098059-2 Library of Congress Control Number: 2022951749 Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the internet at http://dnb.dnb.de. © 2023 Walter de Gruyter GmbH, Berlin/Boston Cover image: gorodenkoff/iStock/Getty Images Plus Typesetting: Integra Software Services Pvt. Ltd. Printing and binding: CPI books GmbH, Leck www.degruyter.com

Contents Introduction References

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Part I: Selecting VR Type Based on Your Resources Chapter 1 VR Technology 5 The Concept of VR 5 Practical Considerations Chapter 1 Checklist 10 References 10

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Chapter 2 The Spectrum of Immersion 13 Immersion Defined 13 Creating an Immersive Environment 15 Outcomes of Immersion 15 Immersion Versus Presence 16 Immersion and Flow 17 Avatars and Flow 18 A Framework for Heightening Immersion and Immersion-Related Concepts in VR: How Can Marketers Tap into the Benefits of Immersion? 19 Chapter 2 Checklist 22 References 22 Chapter 3 VR Content Features: Graphics, Sounds, and Narrative 24 Setting the Stage for VR Content Creation 24 Creating Graphics: Computer-Generated Versus Real World Footage Image Quality 27 Sounds 28 Integrating Graphics and Sound: Creating Illusions 28 Accessibility 29 Narrative 30 Integrating Graphics, Sound, and Narrative 30 Chapter 3 Checklist 35 References 35

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Chapter 4 Sensory Inputs in VR 36 Sensory Marketing 36 The Benefits of Sensory Marketing 38 Sensory Inputs in VR 39 Using Sensory Inputs to Generate Immersion and Flow in VR 40 Technological Requirements of Sensory Inputs in VR 40 Integrating Sensory Elements in VR: What Is the Best Method for Achieving This? 41 Chapter 4 Checklist 44 References 45

Part II: Selecting VR Type Based on Your Customers Chapter 5 Your Customers’ VR Readiness and Ways to Improve It 49 Your Customers’ VR Readiness: Important Considerations 51 Chapter 5 Checklist 53 References 53 Chapter 6 Customer Involvement-Based Strategy 55 The Concept of Involvement 55 Types of Customer Involvement 56 Explaining Customer Involvement: Dual Process Theories 58 Customer Involvement in VR: The Dual Model 59 Implementing a VR Strategy Based on Customer Involvement 60 Chapter 6 Checklist 64 References 65

Part III: Purpose-Driven Design of Your VR Chapter 7 Boosting Consumer Engagement via VR 69 The Concept of Engagement 69 Engagement Potential of VR Types Based on Dynamicity and Interactivity Why Is VR More Capable of Enhancing Engagement Compared to Other Media? 71 The Four Values of Engagement in VR 73

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The Benefits of Customer Engagement in VR 74 How Can You Best Encourage Engagement Through VR? Chapter 7 Checklist 76 References 77

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Chapter 8 Changing Attitudes and Building Your Brand via VR 79 What Is an Attitude? 79 Outlining Attitude Component Sequences and Their Contexts 80 Memory Systems and Attitudes 81 Information Processing and Attitude Formation in VR 83 Enhancing Attitudes with VR: How Can VR Be Used to Affect Attitudes? Chapter 8 Checklist 86 References 87 Chapter 9 Storytelling in VR: Reality Versus Fantasy 88 What Is Brand Storytelling? 88 VR Stories and the Reality/Fantasy Typology 89 Reality in VR 89 Brand Storytelling via Realistic VR 91 Fantasy in VR 92 Brand Storytelling via Fantasy VR 93 Reality Versus Fantasy: Which Should You Choose? Chapter 9 Checklist 97 References 97

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Chapter 10 Selling Your Products in VR: V-Commerce 99 V-Commerce 99 How Does VR Shopping Differ from Other Retail Environments? V-Commerce Applications: Product Fit 101 V-Commerce Applications: Shopping Environment 102 How Do Customers Respond to V-Commerce? 103 How Should You Implement V-Commerce? 104 Chapter 10 Checklist 106 References 107

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Chapter 11 Co-Creation in VR 109 Co-Creation in Marketing 109 Service-Dominant Logic and Co-Creation 109 Co-Creation in VR 110 Co-Creation from Customer-Brand Interactions: How Can Brands Foster Co-Creation Activities in VR? 112 Chapter 11 Checklist 115 References 115 Chapter 12 VR-Based Events 117 How to Design an Impactful VR-Based Event? Chapter 12 Checklist 122 References 122

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Part IV: Incorporating VR Into Your Customer Journey Chapter 13 Pre-VR: Reaching Customers 127 Using “Samples” to Get Customers Excited: Captured Content and 360 Ads Instructions for VR Use 128 Tailoring VR for Your Audiences 129 Chapter 13 Checklist 134 References 134 Chapter 14 Post-VR: Managing the Relationship 135 CRM 135 What Managing the Relationship Means 136 VR and WOM 136 VR and Repatronage in V-Commerce 137 VR and Brand Loyalty 138 VR and Brand Community 139 VR and Memory 140 Integrating VR into CRM 141 Chapter 14 Checklist 144 References 145

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Conclusion Appendix

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List of Figures List of Tables Index

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Introduction What do breathtaking sights in rich visual detail have in common with sounds like pew pew!, whoosh!, and ka-ching! and scents that can be sprayed into the nose through a mask? What do these sensations have to do with improved consumer responses, like purchasing, engagement, involvement, and loyalty? Why, the answer is simple, of course – they are all possible with VR! VR has been an enticing topic for research and practice alike since the mid-20th century. Early iterations of the technology included the multisensory Sensorama (1956), the first head-mounted display (HMD) specifically for VR (1968), and the interactive roombased VIDEOPLACE (1975). Since then, VR has grown remarkably: consumers are now able to purchase a small but meaningful variety of at-home VR HMDs, and VR platforms have become more immersive and realistic than ever. Now, companies such as Meta are investing extensively in the technology with the aim of growing the “metaverse,” which may eventually represent a new domain of human existence and interaction. While we are still quite far off from the holodecks of the Star Trek universe, the technology affords compelling experiences that can leave lasting impressions on users–or, at the very least, drum up excitement around the experience. As a marketer, you might be thinking, “What does this have to do with me or my brand?” Well, while VR has conventionally focused on entertainment (e.g., gaming) and some kinds of simulations (e.g., flight simulators), research has shown that VR also offers major potential for marketers. In fact, some companies and organizations have begun utilizing VR in various ways, whether their goal is to promote awareness of an issue, teach consumers how to use a product, gamify marketing elements, or create excitement around the brand. As the technology continues to advance, marketers will have more novel and compelling ways of integrating VR within their customers’ experiences. Thus, VR is not only to be taken seriously – in fact, smart marketers will keep a close watch on VR and incorporate it into their strategies to gain a sustainable competitive advantage. The aim of this book is simple: we want to bridge VR scholarship with practice and illustrate ways in which marketers can leverage VR. To that end, we present several chapters that discuss aspects such as VR technologies and applications; theoretical perspectives and approaches to VR, such as immersion, flow, and involvement; sensory inputs in VR; customer VR readiness and engagement; v-commerce, or the use of VR as a retail channel; events; and VR as a customer relationship management (CRM) tool. The book is organized as follows: – Part I deals with selecting a VR type based on your resources – which technological solutions you should consider, how immersive do you want your VR marketing to be, how much sensory stimulation do you want to include, and so forth. – Part II addresses selecting a VR type based on your customers – namely, their readiness and their involvement. https://doi.org/10.1515/9783110980561-001

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Part III focuses on purpose-driven design of your VR – that is, ensuring that it is engaging and meaningful. This section includes chapters on changing attitudes, storytelling in VR, using VR to sell products (v-commerce), and planning events in VR. Part IV discusses incorporating VR into the customer journey, from reaching customers pre-VR to managing customer relationships post-VR.

Throughout, we provide numerous examples and references to illustrate our discussions, as well as opinions of industry experts from all over the world. While VR continues to evolve, the lessons learned so far from research and practice provide a solid foundation for future endeavors in the field. We hope that you enjoy reading our book as much as we enjoyed writing it! And, most importantly, we hope your customers see the value in your VR experiences, which this book can help you achieve.

References Barnard, D. (2019). History of VR – Timeline of events and tech development. Last accessed September 23, 2022, from https://virtualspeech.com/blog/history-of-vr Heaney, D. (2022). Meta’s quarterly AR/VR revenue now growing faster than costs. Last accessed September 23, 2022, from https://uploadvr.com/meta-revenue-now-growing-faster-thancosts/

Part I: Selecting VR Type Based on Your Resources

Chapter 1 VR Technology This chapter starts with an introduction of VR as compared to other, similar technologies. Next, we discuss different technical features important and relevant to VR, including field of view, degrees of freedom, interactive control features, and mono- versus stereoscopic view. Practical considerations address the fact that while high quality VR design might be an initial desire, it might not always be the best solution given your marketing goals and target audience.

The Concept of VR With the buzz around the concept of the metaverse on the rise, marketers might find themselves contemplating the benefits of VR for their brands. This is not an easy undertaking: the multitude of technologies, hardware, and software solutions dubbed “VR” makes decision-making overwhelming. What exactly constitutes VR – and perhaps as importantly, what does not? Imagine a continuum from the real to fully virtual world. Metaverse-related technologies are usually said to exist on this continuum. For example, augmented reality (AR) represents a set of technologies where some elements of the virtual world are overlaid on top of the real world. In AR, one can place a virtual sofa in a real living room or see a virtual Pokémon on a real street. In contrast with that, VR seeks to entirely replace real with virtual. Its goal is to take the participant to a completely different time and place, defying reality. For example, a potential car buyer can “test drive” a vehicle on a racetrack in the virtual world, all while sitting in the middle of a shopping mall in the real world. If you search for “VR” online, you are likely to find images of people wearing HMDs, like Oculus or HTC VIVE (see Figure 1). However, many other solutions exist to “transport” participants into a virtual world. These solutions differ on their technical features. First, consider the field of view – in other words, the portion of the total participant’s view where the virtual world exists. For example, HMDs (e.g., helmets, goggles, or glasses) typically fully block out the real world, with the virtual environment encompassing the entire field of view. Such output devices do not need to be advanced: a simple Google Cardboard or an analogous plastic headset can accomplish the same effect by having participants insert their smartphone with VR content into a “box” that limits their field of view to that of the VR (see Figure 2). On the more sophisticated end of the spectrum, brands can use floor-supported displays or panoramic projections. In this case, the virtual world is depicted all around the participant, on the

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walls, floor, and ceiling. Parisian brand Atelier des Lumières (Studio of Lights), for instance, uses 140 projectors to immerse visitors in the artwork by Van Gogh, Cezanne, Kandinsky, and other artists.

Figure 1: VR Head-Mounted Display.

However, not all VR applications take up the whole field of view. Instead, the virtual world might be presented on a computer or smartphone screen. For example, real estate agencies can generate a compelling customer experience by presenting their listings in VR, which is particularly relevant given the high level of competition in the real estate industry. As it would be unreasonable to expect all prospective clients to

Figure 2: Smartphone Viewers for VR.

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own and use a VR headset, the listings would likely be available to “visit” virtually using a simple computer or smartphone screen. In this case, screen size matters – the larger the screen and the associated field of view taken by the virtual environment, the more transported to the virtual place the participants are likely to be. Next, VR solutions differ on their movement tracking, which varies by degrees of freedom. Virtual environments with 3 degrees of freedom can track all neck movements in VR (e.g., a user looking up or down, left or right, or tilting their head). Virtual environments with 6 degrees of freedom can do the same, plus track all positions of the body in space (one can move forward and backward, turn, duck, etc.). For example, VR CAVEs – Cave Automatic Virtual Environments – project the virtual world around the viewer and use sophisticated sensors to track participants’ movements within the room (see Figure 3). Through the use of these sensors, the virtual environment can continuously adapt and adjust to the participant’s perspective.

Figure 3: Under Armour “ice gym” CAVE.

Third, VR applications can feature different types of interactive control features. For example, advanced VR headsets (e.g., Samsung Galaxy Gear or Oculus) can be paired with hand-held controllers (see Figure 1) to allow user interaction with virtual objects (e.g., holding the objects, moving and rotating them). Typically, users increasingly feel like they really ARE in the virtual world when interactive control features are incorporated. In other types of VR, participants can interact using traditional controls such as computer keyboard or mouse. For example, a VR video displayed on a computer screen allows users to “look around” by dragging their mouse cursor. When a VR experience is viewed on a smartphone, simply moving and tilting the screen can enable participants to “explore” the virtual world. Finally, virtual environments can be stereoscopic (vs. monoscopic) – that is, similar to human vision, such that the objects appear three-dimensional (3D). Creating 3D VR requires special equipment such as, for instance, stereoscopic cameras. The content is later presented in such a way that there is a view for the right eye and left eye, rather than a single screen for both eyes. Further, to view the virtual world in 3D, participants might need specialized devices. For example, depicting a

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3D world in a CAVE typically requires users to wear stereoscopic eyewear (i.e., 3D glasses). Stereoscopy brings additional realism to the virtual environment because this is how a typical viewer experiences the real world.

Practical Considerations – What kind of resources are necessary for creating a VR experience? Given the wide range of possible VR solutions, it is unsurprising that they pose different budgetary constraints. For instance, VR with 6 degrees of freedom requires more resources to produce, as opposed to simpler VR with only 3 degrees of freedom. The more advanced applications (e.g., a 3D VR CAVE) are usually more cumbersome to use and require more initial calibration to function properly (e.g., to track movements correctly given the height of a participant). For many brands, producing and maintaining “the best” VR for marketing purposes is not possible, as it requires an extensive investment of time and money. As with all marketing investments, it is important that you consider the return on investment (ROI) of the VR initiative. For example, VR has great potential for wine producers, especially for their promotional activities that are geographically removed from the vineyard site. However, wine producers might want to prioritize VR development in the marketing programs of their higher-end wines rather than inexpensive ones with typically lower profit margins. In good news, “the best” VR is not always necessary for accomplishing strategic marketing goals. Instead, technical features should be carefully selected based on the specific marketing objectives, so that they help achieve these objectives in the most efficient manner. For example, some studies found that providing an advanced and interactive VR experience for tourism brands dissuaded participants from future consumption. In other words, when the VR was “too good,” study participants felt that it sufficiently replaced the real experience and were consequently less interested in visiting the tourism site in reality. On the other hand, if a tourism brand aims to “whet the appetite” of its potential visitors, creating a simpler, less advanced VR (e.g., the one viewed on a computer screen) could be more beneficial. – What objectives can be achieved via VR marketing? Overall, VR marketing can be helpful in a number of ways. If a brand is struggling to get into customers’ consideration sets, VR can help (1) build brand awareness and (2) improve brand attitude. When marketers wish to improve customer evaluations of their offerings, VR can (3) influence judgments of product/service attributes and quality. Given common objectives for marketing activities, VR can (4) increase conversions, or (5) improve the customer experience. Post-purchase, VR can help (6) facilitate positive word-of-mouth (WOM), (7) strengthen brand relationships, and even assist to (8) build brand loyalty.

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It is therefore wise to determine strategic objectives that VR marketing will be aiming to achieve before deciding on the optimal technological features (and associated resource demands). The following chapters take a closer look at the specific objectives that VR marketing might help to accomplish and which technological features are more suitable for these objectives due to their documented effects. – If your marketing budget permits their creation, should more advanced VR solutions be developed? Are there any disadvantages of these advanced solutions? It is worth noting that one of the disadvantages of advanced VR HMDs can be their propensity to induce cybersickness in some viewers. This visually-induced motion sickness manifests as eyestrain, dizziness, and nausea – and can, unsurprisingly, derail VR enjoyment. Some customers might be more likely to experience cybersickness than others – for example, those who have a strong emotional response to the VR content or even older customers are more prone. Several reports also highlight that women might be more likely to experience cybersickness than men due to the HMD hardware design shortcomings (possible adjustments of the between-eyes distance), even though the technology is constantly evolving to address this. Designing VR marketing with a specific target audience in mind is therefore critical for its success. As mentioned earlier, the most “advanced” VR is not always the optimal one. In fact, “going into” the virtual environment on a simple computer or smartphone screen is less likely to cause cybersickness than an HMD and might therefore be more suitable for brands trying to reach wide, varied audiences with limited prior VR experience. Expert Opinion 1 John Mould – Commercial Development Manager, ST Engineering Antycip, London, UK You have to consider the ROI for different brands. VR systems can save money compared to, say, physical prototyping of new products, and can help you discover design flaws before costly real-world mistakes are incurred. VR hardware can be an expensive investment when you consider all the components you might need to create a solution. VR display solutions can range from simple HMDs to single stereoscopic projector solutions for a modest VR Powerwall, or can scale up to sophisticated multichannel CAVE’s with a host of capabilities and options to explore. One can invest a few thousands to hundreds of thousands to more than a million in just hardware alone! It really comes down to what price performance is needed for your particular VR requirements, which tends to influence the level of technology that is proposed to address those needs. I may also add that the technology is significantly more cost effective than it used to be! In any VR solution the software is key. Your application is the heart of the system, its capability ultimately delivers against your objectives and goals. Software for VR can be rented or procured with a permanent license and on-going support. One innovation on the software side is the ability to utilize hundreds of current industry standard applications instantaneously and automatically within your VR display. The process means VR becomes “easy” as you remove the need for file translation, optimization, and the traditional workflows to prepare for comprehending your datasets in a virtual environment interactively. Software tools can be cost effective, there are game engines and free wares out there that can be used with little up front financial investment. Those tools typically mature and

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require cooperation with communities of developers. The challenge with such “in-house” developments is that you tend to have to support yourself, bug-fixing as you move forward, and the real limitation is your on-going time and engineering effort to achieve an acceptable solution. Some clients do not wish to invest internal resources to re-create the wheel so to speak, they want an application that is ready to go out of the box, that supports their chosen VR display and peripherals so they can focus on the content. It is also true that many clients do not have the expertise in terms of programmers to create and continuously adapt their in-house applications, they also might have an issue where the VR guru inside their organization may leave taking this know-how with them. In that case, it might be strategically beneficial to outsource VR application creation to an external provider with that type of expertise.

Chapter 1 Checklist – –

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VR replaces “real” with “virtual.” VR solutions can differ on several technical features: field of view (the portion of the total participant’s view where the virtual world exists), movement tracking (can include 3 or 6 degrees of freedom), interactive controls, and stereoscopic (vs. monoscopic) vision (whether VR is similar to human vision such that the objects appear in 3D). “The best” VR is not always necessary for accomplishing strategic marketing goals. Your brand’s objectives need to be carefully considered, as well as the target audience(s) for your VR marketing, to determine the optimal approach for VR.

References Alzayat, A., & Lee, S. H. M. (2021). Virtual products as an extension of my body: Exploring hedonic and utilitarian shopping value in a virtual reality retail environment. Journal of Business Research, 130, 348–363. Atelier des Lumières (2022). https://www.atelier-lumieres.com/en Bender, S., & Sung, B. (2021). Fright, attention, and joy while killing zombies in virtual reality: A psychophysiological analysis of VR user experience. Psychology & Marketing, 38(6), 937–947. https:// doi.org/10.1002/mar.21444 Cummings, J. J., & Bailenson, J. N. (2016). How immersive is enough? A meta-analysis of the effect of immersive technology on user presence. Media Psychology, 19(2), 272–309. Daugherty, T., Li, H., & Biocca, F. (2008). Consumer learning and the effects of virtual experience relative to indirect and direct product experience. Psychology & Marketing, 25(7), 568–586. https://doi.org/ 10.1002/mar.20225 Deng, X., Unnava, H. R., & Lee, H. (2019). “Too true to be good?” when virtual reality decreases interest in actual reality. Journal of Business Research, 100, 561–570. Domina, T., Lee, S., & MacGillivray, M. (2012). Understanding factors affecting consumer intention to shop in a virtual world. Journal of Retailing and Consumer Services, 19(6), 613–620. https://doi.org/10.1016/ j.jretconser.2012.08.001

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Gadalla, E., Keeling, K., & Abosag, I. (2013). Metaverse-retail service quality: A future framework for retail service quality in the 3D internet. Journal of Marketing Management, 29(13–14), 1493–1517. https://doi.org/10.1080/0267257x.2013.835742 Hayden, K. (2020). How to elevate your marketing strategy with VR – OTR. OTR. Retrieved January 7, 2022, from https://otr.eu/articles/how-to-elevate-your-marketing-strategy-with-vr/ Herz, M., & Rauschnabel, P. (2019). Understanding the diffusion of virtual reality glasses: The role of media, fashion and technology. Technological Forecasting and Social Change, 138, 228–242. https://doi.org/10.1016/j.techfore.2018.09.008 Hollebeek, L., Clark, M., Andreassen, T., Sigurdsson, V., & Smith, D. (2020). Virtual reality through the customer journey: Framework and propositions. Journal of Retailing and Consumer Services, 55, 102056. https://doi.org/10.1016/j.jretconser.2020.102056 Hudson, S., Matson-Barkat, S., Pallamin, N., & Jegou, G. (2019). With or without you? Interaction and immersion in a virtual reality experience. Journal of Business Research, 100, 459–468. Itani, O. S., & Hollebeek, L. D. (2021). Light at the end of the tunnel: Visitors’ virtual reality (versus inperson) attraction site tour-related behavioral intentions during and post-COVID-19. Tourism Management, 84, 104290. Kim, H., Kim, D. J., Chung, W. H., Park, K. A., Kim, J. D., Kim, D., Kim, K., & Jeon, H. J. (2021). Clinical predictors of cybersickness in virtual reality (VR) among highly stressed people. Scientific Reports, 11(1), 1–11. Kim, M., Lee, C., & Jung, T. (2018). Exploring consumer behavior in virtual reality tourism using an extended stimulus-organism-response model. Journal of Travel Research, 59(1), 69–89. https://doi.org/ 10.1177/0047287518818915 Kostyk, A., & Sheng, J. (2022). VR in customer-centered marketing: Purpose-driven design. Business Horizons. https://doi.org/10.1016/j.bushor.2022.06.005 Kwon, R., Kim, K., Kim, K., Hong, Y., & Kim, B. (2015). Evaluating servicescape designs using a VR-based laboratory experiment: A case of a duty-free shop. Journal of Retailing and Consumer Services, 26, 32–40. https://doi.org/10.1016/j.jretconser.2015.05.001 Laurell, C., Sandström, C., Berthold, A., & Larsson, D. (2019). Exploring barriers to adoption of virtual reality through social media analytics and machine learning–An assessment of technology, network, price and trialability. Journal of Business Research, 100, 469–474. McLean, G., & Barhorst, J. B. (2022). Living the experience before you go . . . but did it meet expectations? The role of virtual reality during botel bookings. Journal of Travel Research, 61(6), 1233–1251. Meißner, M., Pfeiffer, J., Peukert, C., Dietrich, H., & Pfeiffer, T. (2020). How virtual reality affects consumer choice. Journal of Business Research, 117, 219–231. Mishra, A., Shukla, A., Rana, N., & Dwivedi, Y. (2021). From “touch” to a “multisensory” experience: The impact of technology interface and product type on consumer responses. Psychology & Marketing, 38(3), 385–396. https://doi.org/10.1002/mar.21436 Mohd Adnan, A. H., Ya Shak, M. S., Abd Karim, R., Mohd Tahir, M. H., & Mohamad Shah, D. S. (2020). 360degree videos, VR experiences and the application of education 4.0 technologies in Malaysia for exposure and immersion. Advances in Science, Technology and Engineering Systems Journal, 5(1), 373–381. Park, M., Im, H., & Kim, D. (2018). Feasibility and user experience of virtual reality fashion stores. Fashion and Textiles, 5(1). https://doi.org/10.1186/s40691-018-0149-x Papagiannidis, S., Pantano, E., See-To, E., & Bourlakis, M. (2013). Modelling the determinants of a simulated experience in a virtual retail store and users’ product purchasing intentions. Journal of Marketing Management, 29(13–14), 1462–1492. https://doi.org/10.1080/0267257x.2013.821150 Park, H., & Kim, S. (2021). Do augmented and virtual reality technologies increase consumers’ purchase intentions? The role of cognitive elaboration and shopping goals. Clothing and Textiles Research Journal, 1–16. https://doi.org/10.1177/0887302x21994287

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Pleyers, G., & Poncin, I. (2020). Non-immersive virtual reality technologies in real estate: How customer experience drives attitudes toward properties and the service provider. Journal of Retailing and Consumer Services, 57, 102175. Schnack, A., Wright, M. J., & Holdershaw, J. L. (2020). An exploratory investigation of shopper behaviour in an immersive virtual reality store. Journal of Consumer Behaviour, 19(2), 182–195. https://doi.org/ 10.1002/cb.1803 Stanney, K., Fidopiastis, C., & Foster, L. (2020). Virtual reality is sexist: But it does not have to be. Frontiers in Robotics and AI, 7, 4. Van Kerrebroeck, H., Brengman, M., & Willems, K. (2017). Escaping the crowd: An experimental study on the impact of a virtual reality experience in a shopping mall. Computers in Human Behavior, 77, 437–450. https://doi.org/10.1016/j.chb.2017.07.019 VR CAVE. ST Engineering Antycip (2022). https://steantycip.com/vr-cave/ Wen, H., & Leung, X. Y. (2021). Virtual wine tours and wine tasting: The influence of offline and online embodiment integration on wine purchase decisions. Tourism Management, 83, 104250. Zeng, G., Cao, X., Lin, Z., & Xiao, S. (2020). When online reviews meet virtual reality: Effects on consumer hotel booking. Annals of Tourism Research, 81, 102860. https://doi.org/10.1016/j.annals.2020.102860

Chapter 2 The Spectrum of Immersion VR offers several benefits to marketers compared to traditional media, including WOM, willingness to pay more for offerings, intentions to visit, donations, and so forth. However, why is VR so much more promising as a technology to connect with customers? Immersion is the simple answer. In this chapter, we discuss immersion – the feelings of being engrossed in an environment such that it is all-consuming. VR environments can range from very low to very high in immersion. We explain immersion and its relationship to similar concepts central to VR experiences: presence, flow, and avatars. We further discuss the range of possible solutions that exist to increase immersion within a brand VR experience. Finally, this chapter lays down a theoretical foundation for the remainder of the book.

Immersion Defined Have you ever felt so involved in a concert, a good book, a movie, or a game that you could not think of anything else and you felt fully engrossed in the experience? This describes the idea of immersion. Sometimes, people in 3D movies become so immersed that when objects fly at them, they duck and try to move out of the way, even though there are no actual objects heading in their direction. Immersion is a relevant term for all kinds of engaging marketing activities (attending concerts, playing games, etc.), but it is particularly relevant to VR technology. Immersion reflects the feeling of being “plugged into” an environment or experience, and can range from feeling weakly absorbed to deeply engrossed. Technically speaking, immersion is the temporary, subjective feeling that someone is mentally and physically submerged within an environment (i.e., the environment feels close both in mind and in body). Notably, this last definition highlights three key features of immersion. First, immersion is partly objective based on the system used (see Chapter 1 for types of VR systems). VR experiences can lead to deeper immersion when they block out distractions from the outside elements. For example, HMDs block out external visual elements because users wear a headset that limits their field of view. However, more importantly, immersion is also subjective. Using VR requires embodiment. This means that VR promotes user involvement and can tap into bodily sensations, including touch, smell, and movement. For instance, a VR environment might require users to change their gaze, looking up and down, or left to right. It might also encourage users to physically walk. Immersion also depends on one’s characteristics, the environmental context, and one’s intentions with regard to the experience. An individual’s ability to understand the experience, their intentions toward the experience, and abilities will all influence the degree to which they feel immersed. For example, those with more absorptive personalities are more likely to be more immersed. Remember that 3D movie https://doi.org/10.1515/9783110980561-003

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with objects flying? Some people are naturally more prone to such heightened levels of immersion. Additionally, certain features of VR can be more conducive to feeling more subjectively immersed. For instance, the interactivity of the virtual environment offers greater authenticity of the experience (i.e., the experience feels more real due to direct inputs from the user), which boosts immersion. Thus, as opposed to passively watching a VR experience, interacting with VR produces more opportunities to be immersed. Second, access to the environment or experience is temporary. The perception of feeling immersed in VR is characterized by the current moment (i.e., not in the past or the future) and is not enduring. In fact, immersion can be interrupted in the current moment by distractions in the environment. A sudden loud noise, for instance, can remind users that they are merely using VR, and are not actually within the realm of the virtual world. However, users can return to immersive states again even after such disruptions. While many think of immersion as a “deep dive,” it can also occur from progressively and repeatedly “dipping your toes into the pool.” When forgetting about the “real world” outside VR and experiencing the VR environment, people are able to get away from everyday experiences and even take on new identities. This is one of the reasons that VR became so popular during the COVID-19 pandemic. Users engaged with VR as a means to escape their actual realities and could pretend to be an astronaut, a golfer, or some other character in the VR world. Again, these identities would be temporary and allow experiencing different roles than the ones in everyday life. In the National Geographic VR experience with HMDs, individuals can be explorers and adventurers, taking on a different persona and even thinking differently when taking on these roles. Even though these experiences occur within a specific time, they are linked to the past and the future, such that former experiences and memories of the brand can help form expectations about future brand interactions. This is why VR has been used in the tourism industry, revealing its powerful ability to persuade individuals to visit destinations and stay at hotels. Ireland’s tourism board, for instance, has put together a range of 360-VR videos where users can experience the country and its heritage. This might increase the number of destinations familiar to potential visitors, or could change perceptions about Ireland. Third, immersion also means that the environment feels closer to the individual, both physically and psychologically. For instance, the VR experience might feel so close that individuals can reach out to objects in the environment. Additionally, the environment can also feel more vivid if these scenes are lively, bright, and detailed. Because this also taps into the way that people imagine objects, individuals will feel a greater ability to imagine the space and themselves being in the space. This is precisely why some marketers use VR to train employees or consumers. For example, Lowe’s Holoroom includes a do-it-yourself VR clinic, where increased proximity to doing certain tasks makes consumers feel more empowered to do these tasks on their own, and they report greater knowledge resulting from the VR experience. Thus, whereas retiling a bathroom might seem overwhelming at first, making the task seem clearer and vivid gives people the confidence that they need to take on these projects, and the tasks are perceived as easier.

Outcomes of Immersion

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Creating an Immersive Environment Immersion also corresponds to the environment, such that it requires a “stage” (so to speak) where the experience can take place. Just like in theaters, the VR experience has to be created with props, backgrounds, and foregrounds. Focusing on the stage, imagination, sensory elements, and the environmental narrative, through storytelling, can enhance the ability of an individual to concentrate. When setting the stage to the environment, marketers should be concerned with the accuracy of a few key aspects. Visually, the environment should feel natural for looking around, accurate, and have sufficient quality (e.g., lighting). Moreover, marketers should consider other accuracies above and beyond merely the visual stage. In particular, marketers could think about sense of touch (i.e., how to represent grasping or moving objects) and sounds (i.e., narrations, music, and other ambient sounds). For example, when moving a bookcase within the Anne Frank Museum VR experience, the Oculus Quest HMD provides haptic feedback to the hand-held controllers, such that you feel like you are touching and grabbing the bookshelf to reveal the stairs. More on sensory elements in VR can be found in Chapter 4. Marketers, likewise, might ensure that the movements within the virtual environment are realistic, such that walking resembles real life and happens instantly without delays. By including boundaries to reduce the intrusion of elements outside of the stage, the experience can facilitate immersion more easily. Some VR systems, like the Oculus, do this automatically so that individuals can move without worry of running into a wall or another stationary object. Finally, by nesting the experience given knowledge of individual users, marketers can facilitate heightened immersion. Using research to tap into the target audience’s cultural norms and preexisting knowledge can aid in making users feel at home in the VR environment.

Outcomes of Immersion When users are highly immersed, they often note several discernable feelings. Aside from letting go, they lose their sense of time and even forget any self-consciousness or negative feelings (e.g., prior frustrations). Depending on the emotions induced by the VR narrative, individuals could also undergo heightened arousal. For instance, when watching a 3D animated film in VR, people reported feeling even more aroused (i.e., stimulated, active) than merely watching the same movie without VR. Aside from these aspects, immersion also leads to more cognitive involvement, such that it requires having enough “mental bandwidth” to experience the VR environment fully. If mental resources are insufficient for the task, the experience can feel overwhelming. Immersion often results in more favorable responses for marketers. At a personal level, users report greater appreciation for the experience, such that it promotes personal growth, well-being, and overall more positive feelings. In a similar vein, users also think of immersion as being able to escape. Again, this is why globally, so many individuals

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invested in a VR headset during the COVID-19 pandemic. Being able to escape reality and feel another environment promotes feelings of harmony. In the realm of feeling more positive, immersion increases user satisfaction with brands, as well as brand recall. In fact, studies find that the same regions of the brain are activated in immersive experiences as when accessing experiences in real life. This explains why immersion enhances brand memories. When examining the influence of immersion on behavioral outcomes, research suggests that immersion is responsible for increasing loyalty, recommendation intentions, and revisit intentions. Interestingly, these effects are more pronounced when social interactions among users are limited, suggesting that immersion is individualistic and not a social activity.

Immersion Versus Presence Related to but different from immersion is presence, the feeling that the virtual environment is one’s real environment. While many studies show that increased presence is positively related to feelings of immersion, presence need not be high for individuals to experience immersion. For example, one can still feel plugged into an experience yet understand that the virtual environment is just that – virtual. Similarly, one can feel immersed in an interesting book, and yet does not need to feel present “in” the book. Moreover, immersion is a broader concept compared to presence. As an example, when researchers changed some experience elements in a VR CAVE, such as imitating wind, consumers’ reactions to the experience stemmed from their sense of immersion, and not presence. Presence can be further classified into three types: spatial, self, and social presence. Spatial presence, sometimes termed telepresence, reflects the extent to which individuals feel they are in the virtual environment as if it were real compared to feeling present in the real environment and merely experiencing VR. Most VR-related research focuses on this phenomenon. Self-presence considers the degree to which an individual feels connected to their own virtual identity, emotions, and surroundings. When one feels more immersed because they feel a greater sense of belonging and connected to the virtual environment, they are more likely to report higher self-presence. Lastly, social presence, sometimes called co-presence, reflects the sense of being with others in the environment. As opposed to artificial entities, sentient beings are a prerequisite to feelings of social presence. In other words, others in the environment contribute to social presence. This is the case in CAVEs and virtual worlds. Virtual worlds are computer-simulated environments where millions of users can participate, create their own avatars, and create/modify their own spaces within the environment. Some virtual worlds can be entered through a computer or mobile device while other virtual worlds require HMDs. One example is Second Life, where the whole aim of the world is selfexpression and interaction. In cases such as these, social presence seems to be more desirable than merely immersion. Given that immersion is more difficult to foster in

Immersion and Flow

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CAVEs because they are typically experienced in groups and other viewers might disrupt immersion, relying on other processes to heighten the experience is vital. As such, tapping into social presence can help enhance the experience. Yet, social presence is not necessary in all types of VR. In some cases, it can even disrupt immersion and lead to less favorable brand evaluations (see Chapter 10).

Immersion and Flow Immersion, along with presence, can facilitate a so-called state of flow. People can achieve this state when they reach optimal levels of immersion and presence. Originally conceptualized for job-related tasks and activities such as playing sports, states of flow result when tasks are sufficiently difficult, yet individuals possess the resources and skill to address the task at hand. For example, runners often can get “into the zone” when participating in marathons, and for them, the time passes rather quickly. Flow is defined as a state in which people are involved in a task to such a degree that nothing else matters. Flow demands high mental energy and motivation. Whereas individuals can experience immersion to greater or lesser degrees, flow either occurs or it does not. This is why some researchers also term flow states as peak experiences, extraordinary experiences, or extreme versions of immersion. Many of us have experienced flow on particularly satisfying workdays, such as when we attend to a challenging yet pleasant task – for example, writing a book on the use of VR in marketing! Immersion and flow have several features in common. First, flow is intrinsically rewarding (e.g., one experiences growth and/or well-being). Additionally, like immersion, people in states of flow do not notice time pass and lose their sense of self-consciousness. Both flow and immersion require cognitive effort, such that people concentrate on the task to a great degree. Yet, flow is different from immersion in several aspects. First, flow coincides with positive emotions, while immersion does not correspond to any particular emotion. Immersion can increase emotional arousal and mitigate negative emotions, but immersion in and of itself does not generate positive or negative emotions. Second, as flow is a peak experience, it is much more fleeting and temporal than immersion. Only when an optimal level of immersion is achieved can flow manifest. Flow states motivate more efficient thinking styles. Specifically, flow fosters mental imagery creation that may or may not be conducive to the consumer purchase stage. Users’ motivations and preferences for cognitive involvement will determine how they respond to VR. More details can be found in subsequent chapters on involvement (see Chapter 6), engagement (see Chapter 7), and v-commerce (see Chapter 10). However, briefly, flow is linked with increased engagement, behavioral intentions, more positive feelings, and greater persuasion.

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While immersion and presence have been studied extensively and have shown to help create a state of flow, one last factor relevant to immersion, flow, and even presence is the use of avatars, which will be discussed in section “Avatars and Flow.”

Avatars and Flow Aside from immersion and presence, avatars are important to facilitate flow. They can lead to more positive consumer responses via flow. For immersion, users that have avatars within VR can become more engrossed through self-expression in that space, which also relates to self-presence. Certain VR experiences can cultivate social presence by facilitating interactions among users’ avatars. Social presence can make individuals experience greater enjoyment within VR, and they will be more likely to return. Moreover, individuals using avatars can experience flow states in virtual worlds. Virtual worlds are socially-focused computer-simulated environments where mass populations can enter simply by creating their own avatars. Consider how some people may play video games all day uninterrupted. The same is true of virtual worlds – the activities people manage to accomplish and the interactions with others’ avatars drive the importance of the connections to others and create opportunities for flow. When avatars are included to represent the user within the virtual world, the design features of the avatar have particular importance for marketers. First, individuals are more likely to respond more realistically within the VR environment, consistent with their patterns in real life (e.g., grocery shopping) when avatars are more realistic. Specifically, when faces and bodies of the avatar are more realistic looking, users are able to identify more with the avatar, they feel more emotionally attached to it, and they report higher willingness to use the avatar again. On the downside, more realistic avatars can make people feel self-conscious and create negative self-thoughts. However, when immersion and flow are heightened, people are more likely to forget about these concerns. When an avatar depicts the user’s idealized self (vs. an actual self), these concerns are also reduced. With idealized avatars, individuals are more likely to make positive changes (e.g., saving money, eating healthy) and forgo short-term benefits, which is relevant to certain organizations and social programs. Second, when individuals are able to customize their avatar, their sense of physical presence in the virtual environment increases. The appearance of the avatar (e.g., realistic vs. fantastical or actual vs. idealized) represents a rational choice of how to display the self in VR. Within virtual worlds in particular, individuals can purchase objects for their avatars that represent extensions of themselves. Enjoyment of the world and the blurring of the real world and virtual world precede these decisions to buy virtual objects. As a final discussion point, avatars can be used by brands within virtual worlds to connect with users. These are sometimes referred to as virtual advisors. This is becoming more common as different models of metaverses have emerged. These advisors are more

A Framework for Heightening Immersion and Immersion-Related Concepts in VR

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persuasive when communicating using text (vs. audio). However, some consumers are skeptical of virtual advisors when they have heightened privacy concerns, little product knowledge, or a belief that the brand has only created the advisor with profits in mind. For brands using these advisors, it is critical that these are not artificial but sentient, represented by actual employees, in order for users to experience social presence.

A Framework for Heightening Immersion and Immersion-Related Concepts in VR: How Can Marketers Tap into the Benefits of Immersion? –

Why is enhancing immersion important, and which elements should marketers consider when aiming to enhance immersion? Immersion is an important dimension for engaging with consumers because, through flow, it can change consumers’ beliefs, attitudes, feelings, and ultimately, their behaviors. Most importantly for fostering immersion, marketers should create “stages” into which the individual can easily plug. Marketers should also take into account the device used by most in the target audience. More immersive VR content and other factors (e.g., sensory elements, interactivity) might overcome the limitations of less immersive devices. While not all distractions can be eliminated easily, when the marketer is in control over the VR experience, it is integral to minimize experience interruptions. Marketers should also take into account individual differences, designing the “stage” with consumers’ prior knowledge, culture, and experiences in mind. The degree of immersion will ultimately be dependent on the customer, but marketers can attempt to capitalize on some of these individual factors. For instance, when including depictions of others in the virtual environment, marketers should consider how much the others are smiling, as this is culturally indicative of many things and might differ, say, in Germany or France compared to the United States. Additionally, marketers should take into account consumers’ knowledge on the subject. As an example, a virtual wine tour that speaks at an elementary level to grape production and vinification might appear boring to someone with more advanced wine knowledge. When consumer product knowledge is high, these types of informative tours can reduce immersion and dampen attitudes. – How can avatars be employed to increase immersion? As previously discussed, related to immersion are presence and the avatar. Marketers can design more realistic avatars for the consumers to use for their self-expression, which would allow them to immerse themselves more in the environment. These avatars should be designed in a more realistic fashion but tailored toward ideal appearances rather than customers’ actual selves. Even better, if possible, marketers should allow for avatar customization as this will engender higher embodiment and motivate the customer to return often and reconnect.

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–

How can marketers enhance flow? Why is flow critical for consumer decisionmaking? All three of these factors – immersion, presence, and the avatar – can create states of flow. Flow states, though, are not guaranteed even with all three of these elements. Testing potential environments with actual customers first would be important to understand which factors need adjusting to activate flow states. See a list of potential questions to assess all three features when testing these environments in Table 1. Of course, flow states lead to positive consumer responses, such as influencing different parts of the consumer decision journey, so such testing would be worth the investment. These relationships are outlined in Figure 4. Table 1: Survey Questions for Testing Flow in Virtual Environments. Please indicate the extent to which you agree or disagree with the following statements: Immersion I lost interest in the real world around me.

 – Strongly Disagree to  – Strongly Agree

The experience limited the intrusion of distractions.

 – Strongly Disagree to  – Strongly Agree

The experience allowed me to escape the real world.

 – Strongly Disagree to  – Strongly Agree

Presence While in the VR experience, I felt I was in the virtual environment.

 – Strongly Disagree to  – Strongly Agree

While in the VR experience, my mind was in the virtual environment, not in the room.

 – Strongly Disagree to  – Strongly Agree

The world generated by the VR experience seemed to me “somewhere I visited” rather than “something I saw.”

 – Strongly Disagree to  – Strongly Agree

Avatar Identification I would like to be more like my character.

 – Strongly Disagree to  – Strongly Agree

My character is like me in many ways.

 – Strongly Disagree to  – Strongly Agree

My character is an extension of myself.

 – Strongly Disagree to  – Strongly Agree

A Framework for Heightening Immersion and Immersion-Related Concepts in VR

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Spatial (telepresence) Self-presence

Presence

Social (co-presence) Thematized Context Device Factors Individual Sensemaking, Knowledge, Experiences, & Intentions

Immersion

Flow

Beliefs Attitudes Feelings Behavior

Elimination of Distractions

Realism

Avatar

Personalization Figure 4: Immersion Framework for Influencing Consumer Persuasion.

Expert Opinion 2 Natalie Cregan-Evans – Former Marketing Manager for Igloo Visions, Shropshire, United Kingdom, now Marketing Program Manager at Virtalis Immersion in VR can be enhanced in a number of ways. You can enhance immersion visually by using virtual headsets, of course, and this perhaps helps achieve the highest level of immersion. Though, people are not always comfortable wearing virtual headsets for a number of reasons. Some seem to experience cases of cybersickness. The headsets might not fit the wearer perfectly, such as with younger children. People could also just prefer to avoid headsets accessible for public use for cleanliness and hygiene purposes. At Igloo, we’re about creating these shared immersive experiences inside a physical space. In these CAVE-style VR experiences, groups – and not just a single individual – can participate in the experience and move physically within the virtual environment. Again, while this type of experience might not be as immersive as wearing VR headsets, you can enhance immersion through other means. One way to do it is visually. For instance, people experiencing VR through the Igloo 3D projections can choose to wear 3D glasses. In this case, people feel like they’re stepping right into the content. Additionally, to enhance immersion, you can engage other senses. For example, you might bring in scent machines to pump in smells that coordinate with the immersive content. You could also use wind machines to add a more dynamic feel, or a floor that rumbles as people walk on it. There is a range of four-dimensional (4D) elements available to integrate to create a multisensory experience, and ultimately lead to higher immersive states.

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Chapter 2 Checklist –

– –

– – –

Immersion is partly objective, based on the VR system, and partly subjective, based on the individual experience. It is also temporary and makes the objects in the environment seem closer. Immersion is affected by the authenticity of the environment and movement within the environment in addition to users’ prior knowledge. Immersion leads to increased concentration and a sense of letting go. Marketers’ use of VR leads to consumers’ enhanced well-being, attitudes, learning, and behaviors as a result of immersion. Related to and contributing to immersion, presence (spatial, self, and social) enhances feelings of being in the virtual environment. Avatar features, such as their presence and customization options, can also enhance immersion. Flow states are desirable states for customers to experience in VR, and along with presence and avatars, immersion helps foster states of flow.

References Banos, R. M., Botella, C., Alcaniz, M., Liano, V., Guerrero, B., & Rey, B. (2004). Immersion and emotion: Their impact on the sense of presence. CyberPsychology & Behavior, 7(6), 734–741. Brown, E., & Cairns, P. (2004, April). A grounded investigation of game immersion. In CHI’04 Extended Abstracts on Human Factors in Computing Systems (pp. 1297–1300). Calleja, G. (2011). In-Game: From Immersion to Incorporation. MIT Press. Calogiuri, G., Litleskare, S., Fagerheim, K. A., Rydgren, T. L., Brambilla, E., & Thurston, M. (2018). Experiencing nature through immersive virtual environments: Environmental perceptions, physical engagement, and affective responses during a simulated nature walk. Frontiers in Psychology, 8, 2321. Carù, A., & Cova, B. (2003a). Approche empirique de l’immersion dans l’experience de consommation: Les operatioins d’appropriation. Recherche et Applications en Marketing, 18(2), 47–65. Carù, A., & Cova, B. (2003b). Revisiting consumption experience: A more humble but complete view of the concept. Marketing Theory, 3(2), 267–286. Carù, A., & Cova, B. (2006). How to facilitate immersion in a consumption experience: Appropriation operations and service elements. Journal of Consumer Behaviour, 5(1), 4–16. Carù, A. & Cova, B. (2007). Consumer immersion in an experiential context. In A. Carù & B. Cova (eds.). Consuming Experience (pp. 34–47). Routledge. Chen, H., Wigand, R. T., & Nilan, M. S. (1999). Optimal experience of web activities. Computers in Human Behavior, 15(5), 585–608. Cowan, K., & Ketron, S. (2019a). A dual model of product involvement for effective virtual reality: The roles of imagination, co-creation, telepresence, and interactivity. Journal of Business Research, 100, 483–492. Cowan, K., & Ketron, S. (2019b). Prioritizing marketing research in virtual reality: Development of an immersion/fantasy typology. European Journal of Marketing, 53(8), 1585–1611. Csikszentmihalyi, M. (1975). Beyond Boredom and Anxiety: Experiencing Flow in Work and Play. San Francisco/ Washington/London.

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Csikszentmihalyi, M. (1990). Flow: The Psychology of Optimal Experience (Vol. 41). New York: Harper Perennial. Csikszentmihalyi, M. (2000). The costs and benefits of consuming. Journal of Consumer Research, 27, 267–272. Cummings, J. J., & Bailenson, J. N. (2016). How immersive is enough? A meta-analysis of the effect of immersive technology on user presence. Media Psychology, 19(2), 272–309. Gromer, D., Madeira, O., Gast, P., Nehfischer, M., Jost, M., Muller, M., Muhlberger, A., & Pauli, P. (2018). Height simulation in a virtual reality CAVE system: Validity of fear responses and effects of an immersion manipulation. Frontiers in Human Neuroscience, 12, 372. Gutierrez, M., Vexo, F., & Thalmann, D. (2008). Stepping into Virtual Reality. London: Springer. Guttentag, D. (2010). Virtual reality: Applications and implications for tourism. Tourism Management, 31(5), 637–651. https://doi.org/10.1016/j.tourman.2009.07.003 Hansen, A. H., & Mossberg, L. (2013). Consumer immersion: A key to extraordinary experiences. In J. Sundbo & F. Sorensen (eds.). Handbook on the Experience Economy (pp. 209–227). Edward Elgar Publishing Limited. Hudson, S., Matson-Barkat, S., Pallamin, N., & Jegou, G. (2019). With or without you? Interaction and immersion in a virtual reality experience. Journal of Business Research, 100, 459–468. Jennett, C., Cox, A. L., Cairns, P., Dhoparee, S., Epps, A., Tijs, T., & Walton, A. (2008). Measuring and defining the experience of immersion in games. International Journal of Human-Computer Studies, 66(9), 641–661. Johnson, E., & Adamo-Villani, N. (2010). A study of the effects of immersion on short-term spatial memory. World Academy of Science, Engineering and Technology, 47, 582–587. Krokos, E., Plaisant, C., & Varshney, A. (2019). Virtual memory palaces: Immersion aids recall. Virtual Reality, 23, 1–15. McLean, G. & Barhorst, J. B. (2021). Living the experience before you go . . . but did it meet expectations? The role of virtual reality during hotel bookings. Journal of Travel Research, 1–19. Nakamura, J., & Csikszentmihalyi, M. (2002). The concept of flow. In C. R. Snyder & S. J. Lopez (eds.). Handbook of Positive Psychology (pp. 89–105). New York: Oxford University Press. Ozkara, B. Y., Ozmen, M., & Kim, J. W. (2017). Examining the effect of flow experience on online purchase: A novel approach to the flow theory based on hedonic and utilitarian value. Journal of Retailing and Consumer Services, 37, 119–131. Peukert, C., Pfeiffer, J., Meißner, M., Pfeiffer, T., & Weinhardt, C. (2019). Shopping in virtual reality stores: The influence of immersion on system adoption. Journal of Management Information Systems, 36(3), 755–788. Pine, B. J. & Gilmore, J. H. (1999). The Experience Economy: Work Is Theatre and Every Business a Stage. Harvard Business School Press. Schlosser, A. E. (2006). Learning through virtual product experience: The role of imagery on true versus false memories. Journal of Consumer Research, 33(3), 377–383. Shin, D. (2018). Empathy and embodied experience in virtual environment: To what extent can virtual reality stimulate empathy and embodied experience? Computers in Human Behavior, 78, 64–73. Shin, D., & Biocca, F. (2018). Exploring immersive experience in journalism. New Media & Society 20(8), 2800–2823. Slater, M., & S. Wilbur (1997). A framework for immersive virtual environments (FIVE): Speculations on the role of presence in virtual environments. Presence Teleoperators and Virtual Environments, 6(6), 603–616. Smith, S. A., & Mulligan, N. W. (2021). Immersion, presence, and episodic memory in virtual reality environments. Memory, 29(8), 983–1005. Van Looy, J., Courtois, C., De Vocht, M., & De Marez, L. (2012) Player identification in online games: Validation of a scale for measuring identification in MMOGs. Media Psychology, 15(2), 197–221.

Chapter 3 VR Content Features: Graphics, Sounds, and Narrative In this chapter, we consider marketers’ options for visual and auditory inputs in a VR environment. First, we discuss types of VR graphics, from those captured in a form of 360 images or video, to 3D models of reality. We provide guidance on selecting the graphics that are right for your marketing objectives and budget and talk to experts about the process of VR graphics production. Next, we highlight different ways to narrate your brand’s VR experience, from text pop-ups within the VR environment to an audio track.

Setting the Stage for VR Content Creation So, you have decided to create a VR experience and transport your customers into a virtual environment. Great! Now what? Well, the immediate answer to that question is another question: what do you want that world to look like? In other words, what kind of content will you present in VR? Do you hope to create a world that mimics our own? Are you trying to create a fantasy experience? Are you hoping for rich visual details or lots of sensory inputs for a truly immersive experience? Are your capabilities such that you can design and implement such a world? Most importantly, what do your customers want, and what would be of the most value to them as well as to you? As you can see, there are many questions to ask yourself when first planning your VR experience. In this chapter, we are focusing on two elements of content in VR: graphics and sounds, or the audiovisual features of the environment, and narrative, or the storyline or process underlying the experience. While good audiovisuals and good narrative are both important parts of a quality VR experience, each one alone is not enough to guarantee a successful virtual environment. Rather, the two must be considered together alongside your goals.

Creating Graphics: Computer-Generated Versus Real World Footage In general terms, marketers can follow one of two paths when creating the visuals of the environment: (1) creating a computer-generated virtual environment via 3D modeling or (2) filming real world footage. The first option is akin to creating a video game, where a digital artist produces virtual objects (sometimes referred to as “Graphic Assets”). This approach is particularly https://doi.org/10.1515/9783110980561-004

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suitable for brands wishing to create a fantasy or a dream-like environment for their customers. Such VR applications often allow for an interactive gamification component. For example, Estée Lauder created a whimsical Maison Too Faced VR, where shoppers can wander through a brightly-colored mansion and gardens, interact with branded products and pink bunnies, and play games to win discount codes. Creating such virtual environments takes a lot of dedicated modeling time, yet they do not require as many resources if they do not have to replicate the real world or accurately capture the details of a geo-specific real-life object (e.g., roads, terrain, and buildings of a real city). In this way, customers can gain a new perspective on the brand that goes beyond what they see in the “real-world” marketplace. The potential for interesting narratives is also present, which could align with fantastical brand storytelling (more on this in Chapter 9). Meanwhile, if your goal is to capture reality or to at least simulate it as best as possible, consider filming footage of the real world. For example, a beer brand might wish to showcase its heritage by filming VR content in a beautiful European country where its original brewery was first established. Perhaps such an experience would involve walking through the various areas of a brewery on a tour or seeing sites local to a brewery, which can enhance the narrative around the brand and its roots. To be presented in VR, this kind of content can be filmed as 180 degrees, meaning that the viewer will not be able to turn around and see behind them), or 360 degrees, which allows an all-around view. 360-degree filming requires specialized equipment such as 360 cameras and a bit of ingenuity regarding the hiding spots for the crew. As you can imagine, with an all-around view being captured, it is difficult to stay out of sight! While this might seem more of a minor point, one of the chief benefits of VR is its immersive potential, which then leads to presence (see Chapter 2). Even small mistakes in filming, such as an errant tripod or a crew member appendage, can disrupt that process and diminish the potential for the experience to engage or delight the customer. Some of these issues can be remedied in post-production, but depending on your VR experience, the process might be costly. Anecdotally, one of the book authors ran into this problem where the content captured for a brand required post-production editing. Specifically, marketers requested a “digital floor sweeping” as some debris were visible in 360 VR. When filming real world footage, it is important to take extra care that all angles are captured accurately. Distortions, blurry spots, visual gaps, and other problems with footage can dampen immersion and presence. Another potential concern is the extent of footage that you may need to capture. Imagine, for example, that you are planning a relatively short (i.e., 10 to 15 minutes) experience using real world content. In this experience, perhaps users have to make certain decisions or move around the environment to interact with certain objects. Even if the experience is no more than a quarter of an hour, you may end up needing to shoot several hours’ worth of footage to ensure that the environment is sufficiently visually represented. Thus, careful planning is

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necessary on multiple fronts when pursuing the real-world option, from crew presence and completeness to filming sequences. When capturing real-world footage, marketers can choose to record videos or images. Specialized software allows users to render and edit spherical 360 images and videos. These assets can then be arranged and presented on specialized platforms, and while some platforms are proprietary, other options are free of charge. For instance, real estate listings can be presented as 360 images on a free platform called Orbix360. They can be later viewed on a computer or smartphone screen or in an HMD such as Oculus. Similarly, VR images of tourism sites can be presented on Google Arts & Culture, although they must pass Google’s selection process. 360-videos can be uploaded on YouTube, and similarly viewed both on a regular computer screen and on an HMD by activating “VR mode.” Platforms such as VeeR (which markets itself as the “YouTube for VR”) collaborate with brands wishing to create commercially viable VR experiences that are also artistically significant. Additionally, there are companies that specialize in VR development that act as a sort of “plug and play” for small firms. One such platform, Cyango, hosts editing software for interactive VR, making it easy to create engaging digital experiences through storytelling. Thus, even if you do not have the bandwidth or the budget to create your own platforms or purchase access to the proprietary ones, there are options for you! Further, some of these platforms allow for interactive features to be incorporated into the VR experience, such as sliders, zoom control, responsive objects, mouseover effects and pop-up features. This enables users to control the virtual environment more (i.e., dynamicity, which is covered in more detail in Chapter 7) and often feel more immersed and present as a result. As an example, Orbix360 allows placing information hotspots in images that can be clicked or “sound spheres” that play an audio when approached (see Figure 5).

Figure 5: Information Hotspots in VR.

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Image Quality Regardless of the chosen approach to creating VR content, it is important to ensure overall image quality. This includes visuals’ fidelity (i.e., reproduction accuracy) and level of detail, definition, and resolution (i.e., pixel count), flicker rates (i.e., the rate at which light or images can flash but still be perceived as a steady depiction), and lighting types. Ultimately, these technical parameters contribute to the overall sense of realism in the VR environment. For example, high definition or resolution photorealistic graphics might make it feel like a viewer is actually standing in the middle of a cocoa farm, listening to a knowledgeable guide telling about the chocolate production process. With lower definition or resolution, the experience might be visually muddled, which would threaten immersion and presence. Studies done in the area of fashion retailing suggest that consumers are growing to expect vivid, realistic VR environments that portray product attributes authentically (i.e., true to the real-world sizes and colors of those products). Similarly, perceptions of authenticity of a VR experience were shown to be important in tourism. While these domains might be more hedonic or experiential in nature, one could easily surmise that image quality is important across VR experiences, even those that have more functional purposes. That is, humans like visual content that is crisp, clear, and detailed, whether they are trying on a sweater, touring a gin distillery, or learning how to change a tire. Therefore, VR content that features genuine, unique elements that are perceived to be representative of “real life” can be beneficial for a number of industries and situations. It is also worth noting that image quality should be consistent across VR experience components. If even one area of the virtual environment has less visual detail than another, the “spell” of immersion might be broken. This is similar to what may occur with problems in real world footage described above – the lack of seamlessness is disruptive and detrimental to the experience (and, therefore, to downstream customer responses!). Thus, consider balancing the need for overall high image quality with your capabilities of producing a visually seamless environment, striving to maximize both according to your parameters and constraints. Of course, visual content is just one part of the experience. As we will explore in greater detail in Chapter 4, there are fruitful possibilities for multisensory experiences in VR, which can take those experiences to the next level. While we do not wish to replicate our discussions in that chapter, we do want to point out that there may be interplay between image quality and other sensory inputs. Interestingly, for example, some research suggests that lowered graphics quality might be offset by more sophisticated sound design. Thus, when considering image quality capabilities, think how other sensory elements of the environment might be tailored or tweaked to compensate in the event of lower-than-desired image quality, whether at the overall level or with specific elements of the environment.

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Sounds Next to visual content, sound is perhaps the second most important element of the virtual environment when it comes to immersion and presence. As with graphics, VR content creators have a couple of options regarding sound. To provide mental simulation of the virtual world, creators can choose simple audio. For example, on a tour, a narrator could be describing the experience in the background, perhaps calling attention to certain visual elements or filling users in on the backstory of a certain building, location, or artifact. An experience might also have music playing in the background. While simple audio is more effective than no audio in terms of creating an immersive experience, higher realism can be achieved by a more “layered” sound design. This would typically include a mix of ambient sounds, character sounds, footsteps, and other noises within the environment. For example, Auchindrain Township – a heritage site in Scotland – created a VR experience featuring actors in period costumes demonstrating the daily life of a Highland farm. The sounds created for the experience included a chatter in the originally spoken in the Township Scottish Gaelic, animal noises, wind, the clanking of the butter churning tools, and more. As such, the experience is no longer simply a more immersive version of a television program or movie. Rather, the complex, layered sounds more authentically replicate how it would sound to be physically present in the environment, which enhances immersion and presence to a much greater extent. Spatialized audio can further aid in creating a realistic virtual world. That means that as the VR user walks closer or further away from the source of the sound, the sound will adjust based on their proximity. It will also match the location of the sound source in relation to the viewer (i.e., sound coming from the left/right/etc.). This aspect of audio can even further deepen the immersive potential of the experience for users as they can not only see objects as closer or farther away but also hear them as such.

Integrating Graphics and Sound: Creating Illusions Media experts say that to be truly immersive, VR needs to accomplish certain types of illusions. High quality audio-visual content helps to create the place illusion – that the virtual world is indeed a realistic environment. This goes hand in hand with the plausibility illusion, which is dependent on whether the “rules” of this virtual world are believable. For example, spatial realism is achieved by placing VR users within a plausible space at the place and height where they could conceivably sit or stand. Things to avoid in VR would typically be spatially unrealistic: for example, by placing a 360degree camera in the middle of a table in a confectionery shop, one brand created an uncomfortable VR experience where the viewer was in an implausible position. Of course, users do not want to feel like they are stuck inside a piece of furniture or sunken into the floor – this is not only unrealistic but also potentially creates VR

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sickness because the viewers are not physically feeling the objects in the environment as they appear. Further, consider the possibilities of first- versus third-person environments. Generally, viewer perspectives in VR can be manipulated as either first person (from the eyes of the user) versus third person (over the shoulder of or behind the user’s representation or avatar). It is important to consider whether your VR experience will represent the viewer within the experience, and if not, whether the absence of one’s body in VR could be designed as less implausible and uncomfortable. If you choose to utilize a third-person perspective, for example, the user’s actions in the environment should be visually aligned as much as possible with the avatar’s movements. Otherwise, the potential for discomfort will be greater. First-person experiences would, of course, minimize this possibility, though implausibility and discomfort could still occur from other sources. Similarly, temporal realism implies that events within the VR environment take place in real time and there are no distracting lags or time lapses. If the VR environment is programmed similar to a video game, so-called update or refresh rates (the number of times a display is updated based on the software) might impact temporal realism. Specifically, the rate at which the virtual environment is rendered by the software may influence user immersion and presence. Summarily, creating illusions depends on ensuring that not only the graphics are of high quality and the sound is realistic but also spatial and temporal realism are maximized. If any of these components falters or is not up to a minimum acceptable threshold, the illusion will break down, as will immersion and presence.

Accessibility Beyond the issue of illusions, consider also the accessibility of the VR content that your brand is aiming to create. That is, how easy is it for users to participate in your VR experience in ways that are conducive to their physical and mental capabilities? Just as physical environments should be designed with accessibility in mind – that is, ramps, wide walking spaces, elevators, and similar elements that help with mobility – virtual environments should be designed with a similar mind to facilitate users’ experiences, whether they are brand new to VR or seasoned users and whether or not they are technologically savvy. One way to improve accessibility is to build virtual environments with high usability in mind, where user controls (i.e., hand and head movements) would be easy and intuitive for the intended audience. You should also consider ways in which users can participate in the experience whether they are standing, sitting, or lying down, which can allow users who are unable to stand or walk to still experience your virtual offering.

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Further, customization of the information presented within the VR environment increases user friendliness and accessibility. For example, sound elements can be duplicated via textual hot spots, and vice versa; the font used in the text hot spots can be made adjustable by the user; etc. These features can improve accessibility for users who have visual or auditory impairments.

Narrative Consider the graphics and sound features of the virtual environment as building blocks of an experience. While these building blocks are certainly important, they do not take on a life of their own without an accompanying narrative. Narratives (or stories) can take all forms, from utilitarian (i.e., following the steps involved in fixing a virtual appliance) to hedonic (i.e., taking part in a virtual tour of a vineyard), from quick and simple to deep and rich, and from realistic to fantastical. In all of these cases, experiences typically include some kind of process or plot line: users begin at a certain point, are guided from one place to the next through prompts and/or their own actions, and ultimately conclude in some way. Some narratives are more defined than others. For example, a guided tour will typically have well defined points and perspectives that simply “carry” the user from one place to the next. The user may, of course, have to “walk” through the environment in some cases, but there are no true “choices” in terms of how the experience plays out. Meanwhile, a virtual world may be much more open-ended, where users are generally free to craft their own narratives as they play out their virtual lives. In this way, users build their virtual identities without a clear ending or process in mind. In any case, there should be some kind of basic narrative involved so that the experience does not seem loose, disorganized, or confusing in purpose to its users. Along these lines, we explore brand storytelling to a greater extent in Chapter 9.

Integrating Graphics, Sound, and Narrative When deciding on a plan for graphics, sound, and narrative, consider the following questions: – Will computer-generated content work for your goals? This approach, of course, yields greater control over the design of the virtual environment and also enables possibilities beyond the real world, though the time required might be greater than real world footage (depending on the nature of the experience). If you have the time, and if a computer-generated experience aligns with what you want users to get out of your experience, then this route would be a good one for you.

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– Are you hoping to use real world footage? If so, consider the potential challenges above regarding filming and ensure that you have the necessary resources (time, money, human power, etc.) to make it happen in a quality fashion. It would be better to have a graphically rendered yet less realistic environment than a more realistic yet incomplete (or, even worse, sloppy!) environment. Of course, it can be difficult to achieve total perfection, and you might find too late that someone’s apparently disembodied leg made it into one of the frames! Do not panic, though. This is where you might be able to combine the two approaches just a bit by using graphic renderings that could be applied to mask any such issues with the footage. –

Are there unique ways in which you can combine real world footage with computer-generated content? Of course, combining computer-generated content with real world footage is not simply a stop-gap measure to address footage problems! Much like AR, which uses technology to integrate digital elements within actual real world spaces, VR experiences can include elements that are both graphically rendered and filmed. For example, a virtual store might be created with a computer, but the products and fixtures in the store might be photographed in real life. This would allow for a shopping experience that is realistic while also offering uniqueness in the virtual (vs. real) world. – What kind of audio are you hoping to integrate? The more complex and layered your sound, the better the immersive potential and the greater the likelihood of presence. If you are more limited in what you can do budget-wise, you might consider a small reduction in image quality if that enables you to create a richer audio environment. You may not, however, need to get so fancy with your sound if your experience does not rely on richness in sound – for example, a guided tour of an art gallery might not depend on layered sound as the experience would be focused on the art itself. – Can you produce the content “in house,” or will you need to outsource? Ah, the age-old question: make or buy? Perhaps for the vast majority of brands, most (if not all) content will need to be outsourced to firms that specialize in various elements, from filming and graphics to sound development and storytelling. As with other outsourcing decisions, this will require you to do a sufficient search for firms who can help you craft the experience you are hoping to create. Conduct a preliminary search for relevant content producers: creative technology studios, 360 filmmakers, digital design studios specializing in computer-generated images and animation, real-time environment and VR simulation creators.

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It may be tempting to do things yourself because outsourcing can be expensive, but consider that (1) anything you do yourself will likely be even more expensive unless you already have fully functioning departments focused on those specific VR components; (2) even simple VR experiences require expertise that your firm may lack; and (3) skimping on the budget to create a VR experience may backfire as the experience may be graphically subpar, which will block immersion and presence and ultimately lead to less positive (or more negative) customer responses. Take the time to do your research and properly invest in creating a high-quality experience, whether you do so in house or out of house, so that you maximize value for both you and your customers. If you decide to outsource VR experience production, you might find the process presented in Figure 6 to be a helpful guide. It highlights that any production specifications should be derived from your marketing objectives and requirements. The appendix provides examples of VR production specifications for filming VR footage. Determine the key objective for developing VR content. Reference company’s marketing strategy, if available

Based on the objective, determine the key target audience of the VR content. Reference consumer reports and marketing studies, if available

Based on the objective and the target audience, determine the key filmed/3D modelled scenes to be delivered in VR (i.e., key narrative points).

Decide on the main audio-visual components for each of the key narrative points.

Decide on the minimum hardware and software requirements for (1) capturing/developing VR, and (2) delivering VR experience to the target audience.

Confirm full VR production specifications with key decision-makers within the organization. Field production specifications to VR content producers to obtain initial pitches and quotes. Figure 6: Developing VR Production Specifications.

– What kind of narrative do you have in mind? Do you intend to construct a tightly controlled, thoroughly planned narrative, or are you aiming to allow users to largely construct their own narratives? The former approach might be appealing to brands that would like to convey certain information to users or to otherwise ensure that the experience follows the

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brand’s aims. While such tight control might also diminish users’ abilities to control the virtual environment, brands can avoid potential problems that may arise from users engaging in undesirable behaviors. The latter approach offers greater potential for co-creation in the sense of storytelling, where users can help to fashion their own stories in relation to the brand. Of course, this also diminishes the control that brands have over the narrative, which can lead to issues. Additionally, you will need to consider how the story will unfold and how the details work together (much like writing a novel or screenplay). The choices you make during the writing of the story will affect how the creation of the environment unfolds and will also affect how users will need to interact with the environment and its components. Richer narratives – that is, stories with more complex plots or characters – will require greater upfront planning and anticipation of graphical and sound needs than shallower narratives. – What accessibility concerns exist with your planned experience? Again, be sure to design the experience with usability in mind! This can be easy to pay lip service to, but unfortunately, many experiences are designed without proper attention paid to this point. Thus, consider your target market and what accessibility needs they may have, and pay close attention to those needs as you design the experience. Expert Opinion 3 Andrew Murchie, Deep Vision Studios, Edinburgh, UK I am biased toward viewing VR content in headsets, for quite a number of reasons including the stereoscopic 3D vision that they offer. When viewing 360 film content on a screen, you are looking at a flat, two-dimensional (2D) representation of the VR world. Of course, you can spin this view around, but it does not offer the viewer any sense of immersion or presence in the virtual world nor does it display any depth. This does not quite do well filmed 3D VR justice. Of course, if you have created the 3D VR content already, it is great to have additional avenues of deployment. You do not have to be limited to having it in a headset only, you can share it on social media, on Facebook, for example, and via a wide range of video sharing sites that support 360 filmed content such as Vimeo or YouTube (Note: more on this in Chapter 13). Interestingly, if you are preparing only for social media content, you do not necessarily need the same level of equipment for production. Virtual environments do not need to be filmed, of course, they can be programmed fairly easily using digital tools like Unity and Unreal Engine. The downside of that is that most 3D modeled content tends to be less photorealistic, especially when viewed on current stand-alone consumer headsets as these simply do not have the real-time rendering power required for detailed photorealism. While some might be fairly well modeled, a lot of these programmed environments still do not look like the real world. On one of the recent projects, I have been consulting the client who reached out to me as they were unhappy with a VR piece that was already in production. While discussing it with them, I realized why this was the case. They wanted their VR experience to allow viewers to be stood in the middle of a beautiful meadow with animals dotted around grazing in the field. They were less concerned about viewers’ ability to exercise 6 degrees of freedom or to interact with the components of the environment and were more concerned with the fact that the environment needed to represent reality. Having already

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commenced the project with a computer-generated environment, the client felt it did not look real enough. A 3D environment, while produced to a good level, simply could not match the visual quality that a VR film could deliver with ease. For their goals, 360 degrees filming was more suitable than a programmed environment, with the compromise being no interactivity and only 3 degrees of freedom (3DoF) in order to deliver the visual quality desired. It should be remembered though that the opposite of this is true too. If a client wanted a fully interactive VR experience where users could navigate all around the environment with 6 degrees of freedom (6DoF) and interact with elements within it, filmed VR content would not be able to deliver this. In this case, the compromise would be on visual realism for the sake of interactivity. It is all about balancing an individual brand’s needs. One of the earliest projects we produced in VR was actually a fairly basic still 360-degree image for a large multinational diaper producer. One of their key products was a type of diaper aimed at toddlers who were at the stage of moving from nappies and preparing for potty training. We were looking at ways for adults to better understand the potty-training experience, imagining how a toddler views the world around them and how using a toilet may appear to them. We already knew that placing cameras at different heights produces interesting, often other worldly results. So naturally we thought it could be interesting to immerse an audience in a toddler’s view of the world. Using fairly rudimentary technology we shot a still 360-degree image where you see a bathroom from the toddler’s perspective, which was done by simply placing the camera low, around a toddler’s eye level, in the middle of the room. When you view this via a VR headset, you suddenly appreciate how massive and intimidating everything around you appears. From a toddler’s perspective, the toilet is a vast towering white bowl while a shower appears to reach right up to the sky. This VR experience was shown to buyers to immerse them in this “toddler-vision,” and to engage them with the brand. It is unique in that it is rather counterintuitive. In most cases we are trying to embrace the real sense of presence and immersion in VR environments, and we would have the camera at an average adult human height to match a typical person’s experience. But this VR did not aim to replicate reality, and the effect was perfect for what the brand was trying to achieve. Even in 360 VR, you still need to consider where you would like your viewer to look at any particular moment, that is, your focal point. As a director, no different to shooting traditional filmed content, you are thinking: “what do I want people to look at?” and “how can I set up this scene for maximum impact?” Once you have the focal point, the challenge then is how to keep the viewers’ focus where you want it to be. In my experience, viewers may look all around for a short while at the beginning of a VR experience; often spinning a full 360 degrees, peering up to the ceiling (or sky) and then down at the floor (or ground). Then, as they are increasingly absorbed by the narrative, viewers tend to follow where you have directed them to look: a speaking character, the most obvious interesting object, the well-lit focal point, etc. Unless you give the viewer a trigger such as following a character walking by them, or perhaps a strong positional audio cue, or any other good reason to look around, they generally focus on what has been placed in the primary focal point directly in front of them. Taking this into consideration, many producers are currently experimenting with producing commercial work that is just 180 degree (VR180) as this is much less technically demanding. VR180 requires no postproduction stitching and can deliver stunning stereoscopic 3D results using standard DSLR Cameras with a specialist VR 180 lens. The downside of VR180 is that as soon as the viewer turns left or right, allowing them to view beyond the limited 180-degree field, the immersive illusion is broken. Hard black lines cut the film left and right and immediately remove the viewer from the virtual world. The decision must be made as to whether this compromise is acceptable for the particular production depending on the brand’s objectives.

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Chapter 3 Checklist – – –

– – –

Broadly, marketers can develop either (a) computer-generated or (b) filmed VR environments. Image quality is important for both types of VR graphics. Graphics are complemented by other senses, in particular audio components. Audio in VR can be simple, but layered/spatial audio may be better suited for VR experiences. Combine VR graphics and sounds in suitable ways to achieve place and plausibility illusions. Narrative ties the VR experience into a seamless process and can be either visual (i.e., pop-up text bubbles) or audial (i.e., spoken words). Your VR’s target audience has certain accessibility requirements that must be determined prior to creating VR content.

References Bender, S. M., & Sung, B. (2021). Fright, attention, and joy while killing zombies in virtual reality: A psychophysiological analysis of VR user experience. Psychology & Marketing, 38(6), 937–947. Harrison, G., Haruvy, E., & Rutström, E. (2011). Remarks on virtual world and virtual reality experiments. Southern Economic Journal, 78(1), 87–94. https://doi.org/10.4284/0038-4038-78.1.87 Hudson, S., Matson-Barkat, S., Pallamin, N., & Jegou, G. (2019). With or without you? Interaction and immersion in a virtual reality experience. Journal of Business Research, 100, 459–468. Kim, M. J., Lee, C. K., & Jung, T. (2020). Exploring consumer behavior in virtual reality tourism using an extended stimulus-organism-response model. Journal of Travel Research, 59(1), 69–89. Mohd Adnan, A. H., Ya Shak, M. S., Abd Karim, R., Mohd Tahir, M. H., & Mohamad Shah, D. S. (2020). 360degree videos, VR experiences and the application of education 4.0 technologies in Malaysia for exposure and immersion. Advances in Science, Technology and Engineering Systems Journal, 5(1), 373–381. Skeldon, P. (2022) Estée Lauder shifts to “v-commerce” as it embraces the metaverse for its too faced arm. https://internetretailing.net/strategy-and-innovation/estee-lauder-shifts-to-v-commerce-as-itembraces-the-metaverse-for-its-too-faced-arm-24271/ Xue, L., Parker, C. J., & Hart, C. (2020). How to design fashion retail’s virtual reality platforms. International Journal of Retail & Distribution Management, 48(10), 1057–1076.

Chapter 4 Sensory Inputs in VR This chapter introduces sensory marketing and discusses why sensory marketing is a powerful form of persuasion. The chapter then contextualizes sensory marketing for VR and describes how sensory integration (smell, touch, etc.) in VR leads to more beneficial consumer responses, such as attitude formation and purchasing. Moreover, it explores why senses are so powerful, tying in the aforementioned concepts of immersion and flow. Finally, the chapter ends by highlighting different ways that VR experiences can integrate sensory inputs into various VR systems.

Sensory Marketing The use of sensory elements by marketers is not a new practice. This is referred to as sensory marketing and includes marketing that fosters a connection to customers’ senses (touch, taste, smell, sight, and hearing). This also implies that the attempt to manipulate customers’ senses is intentional, such as spraying water on produce in the grocery aisles to make vegetables seem fresher, or playing high tempo music in a crowded restaurant in order to encourage people to eat, pay, and leave more quickly. Experiencing sensory inputs in various environments, whether online or offline, influences consumer perception, judgment, and decision-making. When marketers introduce sensory inputs, these inputs serve as subconscious triggers that will help consumers perceive something abstractly (e.g., the freshness of lettuce), help them form attitudes (e.g., the effect of musical genre on customer moods), or even behaviors (e.g., the effect of musical tempo on the speed at which customers move). As opposed to marketing messages that are overt, such as claims to have the freshest produce, sensory marketing is more subtle and provides a more interesting means to engage individuals. Consequently, much research has explored the benefits of sensory marketing efforts as marketers seek to keep their experiences unique and engaging. The visual sense appears pretty straightforward as we are influenced by what we see. Packaging, marketing communications, visual merchandising, product design, retail store design – all of these are efforts to appeal to customers’ visual sense. Perceptions of size, for instance, can affect how much food individuals will consume, from plates and utensils to boxes and bags. Visuals also relate to spaces and distances, which are also based on subjective perception. Spaces, such as hotel rooms, can appear wide and open or narrow and closed-in based on the number of furnishings in the room, window height, lighting, wall and flooring colors/patterns, and the spatial utilization. Distances can also be subject to perceptual biases. For example, even though a destination straight ahead might be a mile away, it is perceived as closer than a destination that is measurably closer but requires several right and left turns. https://doi.org/10.1515/9783110980561-005

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Touch, interestingly, is the first sense that we develop in the womb and the last sense we lose. Touch is paramount in human life, as it impacts our socialization (e.g., a mother’s touch). Relatedly, there are two purposes for touch: autotelic and instrumental. Autotelic touch needs can be described as touching things for the sake of touching – think about people who run their hands over a stack of cashmere sweaters in a boutique just “for kicks,” even though they do not wish to buy one. In contrast, instrumental touch pertains to evaluating objects’ features or qualities (e.g., feeling the softness of a cashmere scarf to determine whether the scarf is worth purchasing). People can report a high need for either or both types of touch when making decisions. As touch is inherently rooted in evolutionary biology, it can directly affect customer behavior. Generally, touching (e.g., a server placing a kind hand on the arm of a restaurant patron) positively affects consumer responses. But touch can also produce the opposite effect. Specifically, people might view previously touched objects as “contaminated.” For instance, clothing on a display table that looks disheveled and picked through will receive less attention and purchases because of the perception that other shoppers have handled the garments; the same can occur for foods and other ingestibles. Touch can also affect attitudes and characteristics attributed to products. When people are presented with a rough texture, for example, they tend to believe the associated product to be more sustainable. In digital environments, where touch is physically impossible, research suggests that providing rich textual descriptions of objects or zoomed-in photos of textures can help overcome the absence of touch – in this case, imagined or simulated textures can counter the lack of physical touch cues. Although scent has received the least attention in sensory marketing, smell is the sense most tied to consumer memory. While people have trouble identifying scents on their own, when paired with visually congruent stimuli (e.g., smelling pine and seeing an image of a pine tree), consumers recognize scents more easily, and this has a positive effect on their behavior, including purchases. Likewise, this visual-scent pairing also helps consumers to form new memories, whereby marketing efforts with visual and scent details are better recalled than when either sense is used in isolation. When matching product displays, scent can increase purchases for those specific objects displayed. Scent can also be nostalgic, such that it can make consumers feel comforted when it is familiar. For example, as cookies and the smells of baking are associated with the idea of home, realtors will often have fresh cookies or bake cookies during open house days to trigger these positive associations. Certain smells are also associated with certain triggers. While lavender can calm and relax people, cinnamon makes people more alert in addition to prompting feelings of happiness associated with certain holidays or times of year (e.g., Christmas). However, while most research suggests that scent is a positive sensory input, some research shows that the use of scent is not always positive. Complex combinations of scents might decrease purchases because complex scents are harder to perceive and process mentally, which can hamper the customer’s ability to consider products and make purchase decisions. Further, when

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scent is more effortfully processed, it can make thinking about highly evaluative goods (e.g., art) more burdensome and lead to less desirable customer responses. The sense of hearing in marketing relates to auditory cues, including music, voices and narrations, and ambient sounds. Marketers often use music as a background sound in their communications. Research supports powerful effects of music on mood, enjoyment, shopping pace, and even spending patterns. Certain genres of music can make customers more aroused (e.g., pop) or more relaxed (e.g., classical). The more enjoyable people perceive the background music to be, the more time they will spend shopping, though the tempo of the music also affects how much people linger, how fast they consume, and even the amount they spend. When hearing higher tempo, upbeat music, people tend to move quickly, eat faster, and spend less. Styles of music can even affect how people spend their money. For example, research conducted in a wine store shows that on days German music was played, German wine sales increased, and on days French music was played, French wine sales increased. In addition to music, voices can affect the characteristics that consumers attribute to products and their attitudes toward them. Remember the Grey Poupon mustard commercial? A limousine pulled up, the window rolled down, and a posh gentleman with an English accent asked, “Pardon me, do you have any Grey Poupon?” Accents and voice have a strong effect on what customers think about products, their authenticity, their positioning, and whether they fit in and belong with an individual’s social group. Lastly, ambient sounds can occur randomly in a shopping situation, but affect behavior nonetheless. While most of these sounds are created by other patrons, they can also relate to the general ambience of the environment. In a cafe, for instance, one would expect the woosh of the milk frothing before a cappuccino is made. As another example, in many large retail stores, the constant chorus of beeping from registers can be heard. These sounds are important for helping to create the environment and set the stage for consumption. The last of human senses – taste – is very difficult to impact alone. As the old saying goes, we often eat with our eyes – it is a sense strongly linked to our senses of sight and smell. When taste is paired with other senses, marketing messages are more persuasive and better recalled. Interestingly, marketing communications following a tasting experience enable people to remember the taste of a product better. While taste cannot be conveyed digitally, technological advancements are currently underway with aims to address this limitation. Thus, marketers should keep an eye on those future developments in case taste is integral to their strategies.

The Benefits of Sensory Marketing Many marketing books discuss the importance of incorporating sensory elements into customer experiences, especially in traditional retail environments, because doing so enhances customers’ responses in well thought out environments. In this case, congruence within the environment and consistency between environments are both critical.

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For example, brands like Omni hotels with their signature lemongrass and green tea lobby scent are praised for their use of sensory elements. Such marketing techniques can influence customers’ emotions and subconscious responses (e.g., ambient temperature of the retail environment). When people are in better moods, they tend to spend more. Likewise, depending on the desired effect (e.g., shop quickly vs. sit and stay), marketers can increase customers’ arousal and movement or put consumers at ease through their use of sensory marketing. Sensory marketing also enables better brand storytelling as it can connect customers to different characteristics of the brand. Moreover, it can improve consumer recall, can increase the memorability of product features, and can enhance overall brand and product attitudes. These effects have been widely shown in marketing research. Even more, carefully selected sensory inputs can boost visit and purchase intentions. Thus, it is unequivocal that sensory elements should be incorporated within marketing contexts, including VR.

Sensory Inputs in VR When it comes to VR technology, it might seem that despite its high-quality visual and auditory inputs, sensory elements in VR are not possible, and therefore, their marketing advantages cannot be harnessed. On the contrary! Simulation of all five senses has been a topic in VR research since the 1960s, and the range of technological solutions for doing so is expanding. For example, researchers have begun the development of a “Virtual Cocoon,” which can reproduce all five senses at once in a virtual environment. In the meantime, a number of products currently on the market can combine with VR headsets to simulate one additional sense at a time. For example, HaptX pioneers haptic technology in VR and creates a realistic sensation of touch that can complement a VR experience. Similarly, a sensory mask called OVR is capable of simulating hundreds of smells to fully immerse VR users in the virtual world. These aromas are safe to inhale and are similar to those used in the food industry. They serve the purpose of making the virtual environment more immersive – for example, they could make one feel like they are on a racetrack by incorporating the smell of burning rubber. Obviously, sensory marketing in VR appeals to the visual sense. As outlined in previous chapters, VR makes objects appear closer and more vivid, thus decreasing the perceived distance traveled to another location and even making visualizing products more concrete. Research shows that the addition of sensory inputs in VR experiences can increase immersion and engagement with the experience, which then leads to higher attitudes and purchase behavior. Marketers can either describe the scents within the environment because scent is connected to consumer memory (and thus more easily recalled) or, just as effectively, diffuse pertinent scents in the room where the VR experiences take place. Auditory elements can be very easily manipulated and introduced in VR experiences (see Chapter 3). While taste perceptions can be merely described or can even follow a VR experience on-site, texture is trickier to manipulate

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without the use of haptic suits or haptic gloves. However, it still can be done by focusing on textures in the environment and directing consumers to imagine touching the objects. More details about re-creating senses are provided in the Technological Requirements section.

Using Sensory Inputs to Generate Immersion and Flow in VR The notion of customers’ immersion is critical to understanding the impact of sensory elements in VR. As discussed in Chapter 2, immersion refers to the depth to which experiences completely submerge customers into the virtual environment. Brands can accomplish this visually, for example, by reducing the consumers’ field of vision with a VR headset. Although sensory elements are sometimes discussed from the perspective of VR experience quality, what makes them valuable is that these elements enhance the immersion in the experience. When customers truly forget about the real world and feel fully immersed in the virtual environment, they can enter flow states. Because of this, marketers incorporating VR technology into their “toolboxes” should consider techniques for improving VR environments’ immersivity, and sensory elements provide a powerful and far-reaching way to do so. For example, consider the Marriott Hotel’s app that “teleports” consumers to an inspiring travel destination. As the purpose of this VR application is to boost room sales, Marriott could consider incorporating destination-related sensory elements into the experience. For example, imagine “smelling” the freshly baked croissants from the window of your virtual hotel room in a prime Parisian location, or imagine “feeling” the warm, relaxing ocean water at your virtual resort in Thailand. These kinds of experiences would be far more immersive than simple 2D images or even a video with accompanying sound. They would be designed to make a consumer feel as though they were actually there, which would increase chances that the consumer would want to plan a visit (and, in the marketer’s view, ideally book with Marriott).

Technological Requirements of Sensory Inputs in VR This use of sensory elements is possible when marketers have control of the environment. Sensory technology comes at a steep price tag. It is unreasonable to expect an average customer to own sensory VR devices or to be willing to set up and fine-tune the full sensory experience. At the same time, marketers can use this technology to deliver highly immersive experiences at brand-related events, such as exhibitions, tours, and product demonstrations, or even within regular customer-facing environments, such as within retail stores, malls, shopping centers, and theme parks. This approach is especially useful when abstract values must be communicated to consumers to aid in brand storytelling. For instance, a VR experience in which customers are shown how a high-end brand of

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chocolate is being made can be complemented by the smell of cocoa beans. Consider Ruinart’s 360-degree virtual tour of their chalk quarries, where the French brand’s champagne is stored. The smells of the wine cellars, barrels, and the bubbly itself might greatly enhance consumers’ appreciation of the product and perhaps even lead to purchases. Moreover, advanced technological implements such as sensory masks or haptic gloves are not always necessary to create more immersive VR experiences. For example, retailers can control smells at their VR experience locations using a simple diffuser that emits scents designed for the virtual experience. Similarly, tasting samples might be given to VR users for consumption during the experience, and tactile sensation can be created by providing a touch-sample (i.e., a physical object corresponding to the virtual experience).

Integrating Sensory Elements in VR: What Is the Best Method for Achieving This? –

Is your VR experience off-site or on-site? In other words, do you have control over the customers’ VR experience? If you are creating the VR experience on-site, then you are in much greater control over the sensory inputs. It would be advisable to use diffusers to generate the smell(s) and take care to monitor that these emit consistent scents. Also, on-site, you could invest in VR HMDs that incorporate scent. If using HMDs, adding sensory cues is a great way to expand upon the already immersive nature of the VR system. As a downside, ambient sounds on-site can take away from the experience and disrupt flow and immersion. As such, making sure that the VR space is away from the sounds of other customers and potentially disruptive noises is going to help engagement within these experiences. An alternative, though, would be to use headphones in combination with the headset to eliminate the potential of external noises that distract individuals within the VR experience. If using a CAVE system, marketers should think through the layering of different sensory elements and can infuse the CAVE with additional sensory inputs such as wind, water, and different temperatures. Because CAVEs are typically used by groups rather than a lone individual, immersion can be heightened from introducing these additional elements. Finally, marketers can heighten the experience with a postVR sampling where appropriate (e.g., for food, clothing, home furnishing brands). If the experience takes place at the customer’s discretion, such as through computer, smartphone, or an HMD at home, then marketers would need to think through how to reproduce missing sensory elements. As mentioned earlier, senses would need to be cued through imagery or through descriptions. Consumers’ imaginations are easily activated by each. Scent, in particular, is most easily activated through the imagination. Additional senses should be congruent, and most senses should be pleasant. However, scent does not have to be pleasant to have a positive impact on purchase

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behavior. In fact, if the scent is unpleasant yet congruent (e.g., rubber tires at a car race), it can help drive immersion (see what we did there?). – How can marketers heighten immersion and flow through sensory inputs? Because some VR systems are naturally more immersive (e.g., headsets), they don’t require much more sensory inputs in order to achieve a peak immersion state, ideal for flow. A single sensory input and/or a simple sensory input (e.g., simple smell) can heighten immersion for these more immersive systems. Though, when the systems are less immersive, more sensory inputs can reach the desired results. For instance, increasing the number of sensory inputs (e.g., music and scent) or increasing the complexity of a single sensory cue (e.g., making scent more complex through combinations of simple scents) can actually help overcome barriers that these low immersivity systems initially have. – What type of sensory cue would be most useful for your VR experience? Because VR already appeals to the visual sense, auditory cues would be an easy addition and can use narrators and music. Narrators should help with the brand storytelling aspects and should consider the congruency of the narrator’s voice and accent with the brand and the intonation and inflection points. For example, Whithorn Museum in Scotland employed a Scottish actor to narrate the VR scenes, with the narration reflecting a journey to draw in the viewer. In certain cases, background sounds were added (e.g., church bells) to emphasize certain points of the journey to immerse the viewer. Music, likewise, can be added and should be thought out carefully. Marketers should answer the following questions. What type of emotions do you want users to feel along the experience? What effect do you want to have on users’ movements? Should music be a focal part of the experience to reflect the journey, or should it help set the scene and play more of a background role? Beyond visuals and sounds, the other two senses that can be manipulated within VR are touch and scent. If you want to help explain a highly involving product, touch might be the best option, because it facilitates evaluative decision-making. Additionally, research shows touch is helpful in overcoming instances of mental overload by introducing a hedonic, enjoyable element. On the other hand, if your goal is to build awareness or enhance persuasiveness for less involving products, integrating scent might be a better option. As scent is tied to memory, it would be highly impactful in building awareness or forming new brand memories. Likewise, scent can be effectively used to motivate purchase behavior, affecting specific product purchases that are congruent with the scent.

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Expert Opinion 4a John Mould – Commercial Development Manager, ST Engineering Antycip, London, UK Whether to incorporate sensory elements comes down to what is the focus of the VR experience. The importance of including additional immersive capabilities within your VR is down to the need to have and nice to have benefits, and of course the budgetary constraints. The way you deploy and integrate the smells or interactive feedback could be very different for each VR project. Smell is probably the least stimulated of the senses in the virtual world, but perhaps necessary if you are using the virtual experience to market a food related subject. We know that military clients sometimes want the rather nasty smells that come from the battlefield and theatre of war, as it helps to train the soldier to have a tolerance to such smells they may encounter in combat or when tending to a casualty. Audio can be very important to immerse someone in a sound field that realistically replicates the real world. It can be very powerful in VR to move closer to an object like a vehicle or character, and to hear it become louder. We have had universities who used synthetically generated sound fields to research how you would hear an emergency vehicle siren approach you when you are sitting in your car in traffic. They could use the virtual to prototype ways of forcing the sound from the sirens to test if drivers are more aware of the direction of approach. Touch and feedback devices can also be important if the VR experience needs this element. At one event, we showed a demonstration by Haption that created the realistic sense of picking up an automotive component. You could feel its weight as you manipulated it inside a virtual door skin of a virtual car. The idea was to show the resistance and “feel” of the real word action as you attempt to correctly maneuver the object into place. This helps with muscle memory for learning to perform the task in reality. We have clients like the atomic energy in France who need haptic feedback devices in VR to replicate the real-world tasks they wish to perform. They relate this to the robotic devices they may be remotely operating in the real world. We also have clients who are using small haptic devices so they can perform dental and medical related tasks in a virtual environment. The feedback and realism in this case would be key to the learning process and experience gained from using the equipment. Heat and temperature have been used in VR entertainment. For instance, in a planetarium a virtual flight through the solar system can be coordinated with the HVAC system to heat the audience as you approach the sun and then to cool the room as you fly away. Going to Universal Studios and partaking in a theme park VR experience that brings elements like water splashed over the audience must be optimally timed and set up to coordinate with the visual experience and the on-screen scenario. In summary, I could go on with examples for different senses that can be stimulated to bring different immersive capabilities, but immersion needs to be at a level that achieves the objective of the virtual experience. If the objective is to engage the user to dispel their belief that they are in a virtual world then it should be able to achieve this goal. Expert Opinion 4b Aaron Wisniewski – CEO and Co-founder of OVR Technology, Burlington, Vermont, USA Marketing is all about telling a story. To do this effectively, stories need to draw in consumers in an immersive manner and foster deep emotional connections. Scent can be a powerful way to help accomplish these objectives because it has such power over our emotions, motivations, and even our actions. VR amplifies the power of scent and helps stories come alive. While some scenarios and environments might feel more disconnected and unnatural for people to be involved in, scent can help deepen the emotional experience and make the environments seem more realistic. In some ways, scent is even more powerful when it comes to memory and emission due to how it functions from a biological and psychological point of view. Our sense of smell is fully developed before we are even

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born, and smell helps us make sense of other senses. For instance, when eating a strawberry, most of our perceptions are not formed from our sense of taste but actually based on the smell of the strawberry. Our sense of smell is also tied very closely with memories and emotions. Therefore, scent is not only nostalgic for us, but can motivate us unconsciously. By incorporating smell into VR experiences, it not only makes these experiences feel more real, but also makes them more emotional, meaningful, and effective. Scent can make you more relaxed. For instance, by incorporating relaxing scents matching a VR wellness experience (e.g., ocean breezes, pine forests), it can deepen meditation sessions. At the same time, scent can also make individuals feel more alert. VR training experiences that incorporate scent can help strengthen the production of memories so that in high-risk situations (e.g., fires), people will respond more quickly and effectively. Interestingly, scent can promote a wide variety of outcomes, such as inspiring prosocial behavior, helping us sleep better, and even boosting our immunity. Whether the digital experience targets wellness, entertainment, education, or social connection, scent will make it better. OVR Technology has a variety of “primary scent categories” that we provide to clients in replaceable scent cartridges. A single cartridge can create hundreds of different unique sensory impressions that are familiar, but unique to the virtual world. When we work with brands that already have scents associated with their image or product, it is possible to create a “white label” experience using the existing fragrance to create brand continuity across channels and within the VR channel. Generally, using the OVR scentware is more economical and effective than other scent-integration options, especially when guided by our scentware experts. As with any new technology, the more common it becomes, the less expensive it becomes, but OVR is certainly not cost prohibitive and is accessible for most marketing budgets. The decision regarding the simplicity versus complexity of scents is based on two key criteria. First, this should be based on each client’s goal. If their goal is to tell a nuanced and lengthy story with multiple emotional dimensions, then the scentware will probably reflect that and be much more complex. If the brand’s goal is to have an experience built around a singular moment or emotion, then the scentware may be more focused and simple. Second, the scent complexity will also depend on the level of user interactivity. Since OVR is a spatial technology, the scents are primarily triggered by user behavior, just like in the real world. This means that the more interactive the experience, the more potential for complexity arises. Beyond these considerations, it seems that clients have more success with simpler, more focused scents. Though, this success could also be a function of the integration of message clarity.

Chapter 4 Checklist – – – – –

Sensory marketing affects customer perceptions, attitudes, and decision-making. Implementing sensory marketing has a positive impact on marketing-driven goals (e.g., positioning a brand, product sales, return visits). VR experiences can integrate sensory inputs virtually or as complementary inputs on-site. Sensory inputs in VR could be either real (e.g., diffused scents) or simulated (e.g., scents described richly during the experience to pique imagination or memory). Sensory inputs in VR drive immersion, which then helps foster a state of flow. This explains why sensory inputs in VR produce more favorable consumer responses.

References

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Given the range of VR systems and goals, marketers should decide the combination of senses to incorporate into a VR experience.

References Berg, L. P., & Vance, J. M. (2016). Industry use of virtual reality in product design and manufacturing: A survey. Virtual Reality, 21(1), 1–17. https://doi.org/10.1007/s10055-016-0293-9 Burdea, G. C., & Coiffet, P. (2003). Virtual Reality Technology (2nd ed.). Hoboken, NJ: Wiley-Interscience. Clark, J. (2017). Why should you care about virtual reality in marketing? Forbes. Last accessed February 1, 2018, from https://www.forbes.com/sites/forbesagencycouncil/2017/10/02/why-should-you-careabout-virtual-reality-in-marketing/2/#e9244cb360fc Cheema, A., & Patrick, V. M. (2012). Influence of warm versus cool temperatures on consumer choice: A resource depletion account. Journal of Marketing Research, 49(6), 984–995. Chen, H., Wigand, R. T., & Nilan, M. S. (1999). Optimal experience of web activities. Computers in Human Behavior, 15(5), 585–608. Csikszentmihalyi, M. (1990). Flow: The Psychology of Optimal Experience (Vol. 41). New York: Harper Perennial. Cowan, K., & Ketron, S. (2019a). A dual model of product involvement for effective virtual reality: The roles of imagination, co-creation, telepresence, and interactivity. Journal of Business Research, 100, 483–492. Cowan, K., & Ketron, S. (2019b). Prioritizing marketing research in virtual reality: Development of an immersion/fantasy typology. European Journal of Marketing, 53(8), 1585–1611. Cowan, K., Spielmann, N., Horn, E., & Griffart, C. (2020). Perception is reality . . . haptic factors and digital engagement. Journal of Business Research, 120, 529–538. Derbyshire, D. (March 5, 2009). Revealed: The headset that will mimic all five senses and make the virtual world as convincing as real life. Daily Mail. http://www.dailymail.co.uk/sciencetech/article-1159206/ The-headset-mimic-senses-make-virtual-world-convincing-real-life.html Engineering and Physical Sciences Research Council. (March 4, 2009). First virtual reality technology to let you see, hear, smell, taste and touch. ScienceDaily. http://www.sciencedaily.com/releases/2009/03/ 090304091227.htm Grewal, D., Levy, M., & Kumar, V. (2009). Customer experience management: An organizing framework. Journal of Retailing, 85(1), 1–14. Gutierrez, M., Vexo, F., & Thalmann, D. (2008). Stepping into Virtual Reality. London, UK: Springer-Verlag. Guttentag, D. (2010). Virtual reality: Applications and implications for tourism. Tourism Management, 31(5), 637–651. https://doi.org/10.1016/j.tourman.2009.07.003 Huo, X., Wang, J., & Ghovanloo, M. (2008). A magneto-inductive sensor based wireless tongue-computer interface. IEEE Transactions on Neural Systems and Rehabilitation Engineering, 16(5), 497–504. Kellaris. J. J., Cox, A. D., & Cox, D. (1993). The effect of background music on ad processing: A contingency explanation. Journal of Marketing, 57, 114–125. Krishna, A. (2012). An integrative review of sensory marketing: Engaging the senses to affect perception, judgment and behavior. Journal of Consumer Psychology, 22(3), 332–351. Madrigal, A. (March 4, 2009). Researchers want to add touch, taste and smell to virtual reality. Last accessed December 27, 2018, from http://blog.wired.com/wiredscience/2009/03/realvirtuality.html Nakamura, J., & Csikszentmihalyi, M. (2002). The concept of flow. In C. R. Snyder & S. J. Lopez (eds.). Handbook of Positive Psychology (pp. 89–105). New York: Oxford University Press. Tomono, A., Kanda, K., & Otake, S. (2011). Effect of smell presentation on individuals with regard to eye catching and memory. Electronics & Communications in Japan, 94(3), 9–19.

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Pham, J. (2016). 9 brands taking advantage of the VR craze. Last accessed December 27, 2018, from https://www.pastemagazine.com/articles/2016/04/9-brands-taking-advantage-of-the-vr-craze.html Price, S., Jewitt, C., & Brown, B. (2013). The SAGE Handbook of Digital Technology Research. London: Sage Publications. Verhoef, P., Lemon, K., Parasuraman, A., Roggeveen, A., Tsiros, M., & Schlesinger, L. (2009). Customer experience creation: Determinants, dynamics and management strategies. Journal of Retailing, 85(1), 31–41.

Part II: Selecting VR Type Based on Your Customers

Chapter 5 Your Customers’ VR Readiness and Ways to Improve It Considering whether incorporating VR as one of the customer journey touchpoints will work for your target audience? This chapter focuses on consumers’ traits that can make them more receptive to a novel technology, such as VR. Specifically, we discuss consumer innovativeness, independent judgment making, novelty seeking, and ways to assess these traits within your target audience. Further, we consider the barriers that might prevent consumers from engaging with a VR experience. We highlight methods for investigating hardware ownership within the target consumer group. Lastly, we offer VR design solutions that make the use of nonspecialist hardware possible.

In the excitement of developing a brand new VR experience, it is easy to forget that your customers might not feel similarly excited. Some might be hesitant about trying out new devices and media formats, some might feel physically uncomfortable doing so, and some might simply lack the access to the hardware and software necessary to partake in VR. Understanding your target audience has always been a critical component of marketing success, and VR marketing is no exception. In general, whenever a new technology is introduced in the marketplace, potential users go through a so-called adoption process. This can be roughly divided into five stages. First, potential users learn about the innovation, and second, they form an attitude toward it. Next, they decide whether to adopt or reject the innovation, implement the innovation in their lives, and finally confirm their decision. While in most cases consumers follow these “steps,” the speed with which the process happens differs greatly from one consumer to the next and from one situation to the next! For some, trying out a new device might be an exciting opportunity that they are ready to embrace whenever it becomes available. For others, forming an attitude and deciding on using the novel item is a much longer process. Despite best marketing efforts, encouraging consumers to use new technologies is not an easy task. Psychologists believe that customers’ general predisposition toward technology is a “state of mind.” In other words, people’s “propensity to embrace and use new technologies” differs, and some might have higher technology readiness than others (Parasuraman, 2000, p. 308). This is a balancing act between positive and negative feelings toward technology that one might experience. Positive feelings usually stem from optimism (a general positive view that technology is a good thing that gives us increased flexibility and efficiency in our lives) and innovativeness (an individual tendency to be a pioneer). Negative feelings, in turn, are driven by discomfort (perceived lack of control over technology and feeling overwhelmed by it) and insecurity (distrust and skepticism that technology will work properly). Knowing where your target consumer

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groups stand in regard to these positive and negative feelings might be helpful when deciding whether they will quickly and willingly embrace a new marketing format such as VR. One research team found strong links between consumers’ independent judgment making and their willingness to explore and shop in a virtual world. Those “independent judgment makers” do not heavily rely on others for information and assistance. They therefore believe that they can figure out how to control new technological devices and think those devices will be relatively easy and enjoyable to use. If your target audience consists of such folks, then getting them to try VR in a store pop-up or at home will be relatively simple. However, this brings up an important question of VR device ownership. That is, will your customers experience VR in a marketer-controlled environment? Will there be sales assistants, promoters, or brand ambassadors on hand to provide them with VR devices and necessary assistance? Or is your VR experience meant for use with a personal VR device? If the latter, then prior to investing in VR it is important to determine what percentage of your target audience owns the required hardware (e.g., advanced VR headsets). It is worth noting that VR headset adoption among consumers is not negligible. For instance, 19% of US households owned and used VR headsets in 2019. In the UK, Mintel consumer trends report shows that around 10% of consumers in late 2021 have used a VR headset in the past three months. It is, however, important to capture whether the proportion of VR device owners is lower or higher among your target audience. In order to maximize ROI, it is helpful to design VR experiences in such a way that the experience would not require a large portion of your target group to own a piece of advanced (and expensive!) hardware. For example, you could upload your 360 VR content to the brand’s YouTube channel or incorporate interactive VR environments on your website or mobile app. This allows for flexibility, where some consumers can access your VR marketing content via advanced devices while others can use nonspecialist hardware (i.e., a regular computer or smartphone). If you wish to increase the immersivity of your VR experience while not relying on consumer ownership of expensive devices, you might want to consider low-tech solutions. For example, a brand can prepare foldable VR viewers for smartphones that can be assembled at home, similar to Google Cardboard. Such viewers can be mailed to consumers or handed out at stores and during events. For instance, McDonald’s Sweden included Google Cardboard headsets in happy meals. Cardboard viewers are an inexpensive means of limiting consumers’ field of view, delivering a more immersive experience while not breaking company and customer banks. These viewers must, however, fit your consumers’ phones’ screen sizes, which can vary considerably among types of phones. It is, therefore, helpful to know whether the majority of your target audience members are Team Apple or Team Android (or whether they tend to have some other kind of device).

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Several academic investigations have focused on perceived barriers of VR adoption among consumers. They examined what consumers see as the main hindrance to purchasing VR headsets. Researchers found that customers are still unsure of the stand-alone value of VR headsets and are not convinced that these devices’ technical specifications will meet their expectations. They also often feel that once a pricey device is purchased, only limited VR applications and games are available, making the headset less enticing to own. On one hand, these findings indicate that marketing programs relying on customer-owned VR headsets might not reach customers on a larger scale. On the other hand, this represents a unique opportunity to develop an engaging VR application that might be appealing to content-starved headset owners, engaging even those who would not ordinarily partake in marketer-generated games or experiences and encouraging nonowners to take the leap!

Your Customers’ VR Readiness: Important Considerations – Do you know the technology readiness of your target customers? Several marketing research methods can be suitable for exploring your target audience’s technology (or, more specifically, VR) readiness. You can collect demographic or behavioral data on your target consumers, such as their level of income, whether they follow technology brands online, etc., and use these indicators to approximate their likely technology adoption. For a more direct assessment, you might opt to conduct focus groups or use a short questionnaire sent to your email subscribers, shared with your social media followers, or incorporated into your website. In the questionnaire, you might aim to assess your audience’s optimism about new technology. Customers’ innovativeness can also serve as a helpful indicator of their technology readiness. Similarly, you might want to measure your audience’s independent judgment making to gauge their potential responsiveness to trying out VR. Specific questionnaire items that can be used for assessing these customer characteristics are presented in Table 2, where higher scores indicate higher technology readiness. The data can also be used to further divide customers into clusters with different degrees of potential VR readiness, which can assist with segmentation efforts. – Have you assessed your customers’ VR device ownership? Consider running a quick check by asking a sample of your current customers whether they currently own a VR device. A simple yes/no question can be asked via your brand’s mobile app, website chatbot, or a tablet strategically placed at point of sale. Keep in mind that not all VR marketing has to rely on consumer-owned VR devices and that low-tech solutions exist, like the examples discussed in Part I.

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– How can you improve your customers’ VR readiness? Studies show that customers’ intention to use VR is strongly influenced by their perceived enjoyment. This should come as no surprise – we are often more likely to engage in an activity if we believe it to be enjoyable! Customers often adopt VR for enjoyment and sensation-seeking rather than usefulness. It can be beneficial to highlight hedonic and fun elements of the experience in marketing communications and promotional activities that accompany your VR marketing efforts. For example, if a VR experience is offered at a flagship store location, a nearby banner may read “Take a break and let us whisk you away on a fun adventure.” Such a banner might be especially suitable for an experience involving cooking, which would turn “whisk” into a double entendre. Table 2: Technology Readiness Consumer Survey. Please indicate the extent to which you agree or disagree with the following statements: Optimism You prefer to use the most advanced technology available.

 – Strongly Disagree to  – Strongly Agree

Products and services that use the newest technologies are much more convenient to use.

 – Strongly Disagree to  – Strongly Agree

You feel confident that machines will follow through with what you instructed them to do.

 – Strongly Disagree to  – Strongly Agree

Innovativeness Other people come to you for advice on new technologies.

 – Strongly Disagree to  – Strongly Agree

In general, you are among the first in your circle of friends to acquire new technology when it appears.

 – Strongly Disagree to  – Strongly Agree

You keep up with the latest technological developments in your areas of interest.

 – Strongly Disagree to  – Strongly Agree

Independent Judgment Making When it comes to deciding whether to purchase a new service, I do not rely on experienced friends or family members for advice.

 – Strongly Disagree to  – Strongly Agree

I seldom ask a friend about his or her experiences with a new product before I buy the new product.

 – Strongly Disagree to  – Strongly Agree

I do not rely on experienced friends for information about new products prior to making up my mind about whether or not to purchase.

 – Strongly Disagree to  – Strongly Agree

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Expert Opinion 5 Reginé Gilbert – User Experience Designer and Author of Human Spatial Computing, New York City, USA There are over a billion people with disabilities worldwide. Since the pandemic, we have seen an increase in disabilities. Therefore, to best serve your consumers, you could research the target audience and include people with disabilities as part of the process from the beginning. Key considerations for VR accessibility are user’s mobility, cognition, hearing, and eyesight. To make the process more structured, you might want to follow the set of guidelines for accessibility called Virtual Reality Checks, which was developed by Meta. These checks focus on audio, visuals, and other aspects of accessible design. When creating an experience, offering multiple options is one way to address accessibility. For example, if someone can use controllers to select something on a menu, other options could include using voice or hand tracking. There are successful examples out there that make use of this logic. For example, an application called Walkin VR is a software for people with disabilities that makes VR experiences more accessible. It can be found on the digital distribution platform STEAM. If you are looking to increase accessibility of your VR experiences, consider “XR Access” – an organization started by Cornell Tech University. They work to increase inclusion and accessibility in the mixed reality space by holding annual symposiums and providing resources to make experiences more inclusive and accessible.

Chapter 5 Checklist – –

–

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Customers differ on their willingness and speed of new technology adoption. Your customers’ VR readiness might depend on technology-related optimism, innovativeness, and independent judgment making. These characteristics can be assessed via market research. Similarly, VR device ownership among the target audience can be assessed via research, and if the proportion of those with individually owned VR devices is not significant, marketers can explore low-tech/low-cost solutions. Highlighting enjoyable aspects of VR can improve your customers’ VR readiness.

References AR Insider. (2020). https://arinsider.co/2020/05/20/new-report-19-of-u-s-adults-have-tried-vr/ Domina, T., Lee, S. E., & MacGillivray, M. (2012). Understanding factors affecting consumer intention to shop in a virtual world. Journal of Retailing and Consumer Services, 19(6), 613–620. Google Cardboard. (2022). https://arvr.google.com/cardboard/ Han, S. L., An, M., Han, J. J., & Lee, J. (2020). Telepresence, time distortion, and consumer traits of virtual reality shopping. Journal of Business Research, 118, 311–320. Kantar Profiles/Mintel, January 2020–October 2021 (proprietary database).

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Laurell, C., Sandström, C., Berthold, A., & Larsson, D. (2019). Exploring barriers to adoption of virtual reality through social media analytics and machine learning – An assessment of technology, network, price and trialability. Journal of Business Research, 100, 469–474. Lee, J., Kim, J., & Choi, J. Y. (2019). The adoption of virtual reality devices: The technology acceptance model integrating enjoyment, social interaction, and strength of the social ties. Telematics and Informatics, 39, 37–48. Mady, T. T. (2011). Sentiment toward marketing: Should we care about consumer alienation and readiness to use technology? Journal of Consumer Behaviour, 10(4), 192–204. Parasuraman, A. (2000). Technology Readiness Index (TRI) a multiple-item scale to measure readiness to embrace new technologies. Journal of Service Research, 2(4), 307–320. Rogers, E. M. (1995). Diffusion of innovations: Modifications of a model for telecommunications. In Die Diffusion von Innovationen in der Telekommunikation (pp. 25–38). Berlin, Heidelberg: Springer. Tussyadiah, I. P., Wang, D., Jung, T. H., & Tom Dieck, M. C. (2018). Virtual reality, presence, and attitude change: Empirical evidence from tourism. Tourism Management, 66, 140–154 Vishwakarma, P., Mukherjee, S., & Datta, B. (2020). Travelers’ intention to adopt virtual reality: A consumer value perspective. Journal of Destination Marketing & Management, 17, 100456.

Chapter 6 Customer Involvement-Based Strategy While VR can be an engaging tool for customers, they approach situations under varying levels of involvement – that is, some are more motivated to engage in the process, think about incoming information, and evaluate what is going on around them in the experience. Thus, this chapter will discuss the routes to effective VR depending on customers’ likely levels of involvement so that managers can design VR experiences to best appeal to those likely levels.

The Concept of Involvement Cast your mind back to the last time you went to the mall, a theme park, a restaurant, or a museum. How physically and mentally invested were you prior to the visit? Were you fully committed to learning all you could about the place you were going? Did you research any products that were being offered prior to the trip? Or did you go in with the hope of a fast, efficient transaction? These questions focus on the subject of customer involvement – that is, the level of motivation a customer has or the level of importance the customer attaches to a given situation, such as a purchase or service interaction. Involvement is a universally relevant and important factor in how customers interact with products and brands, making it important for marketers to understand how to best communicate with their customers. Some customers are minimally involved – they might be making routine purchases or visits, they might be in a hurry, or they might simply find the given situation to be of little importance or relevance to their current goals or desires. If this is the case, then the customer will be less willing to think deeply or critically about things; instead, they would likely use something called a heuristic – a decision-related shortcut or rule of thumb that helps with finishing a task faster and with less effort – when making a decision. To these customers, experiences that are smooth, quick, and efficient without requiring a lot of effort or thought lead to positive results. Meanwhile, other customers might be highly involved in the situation. They may have done extensive research ahead of time, especially if the situation is novel or involves a great deal of risk (e.g., a very expensive purchase or an important gift for a special occasion), or they may find the situation to be very important or relevant otherwise. Customer involvement is no less important to VR than to any other aspect of the customer-brand relationship. That is, customers may approach VR experiences with different levels of involvement, which can influence how they view VR, interact within virtual environments, and respond to VR experiences overall. As with other marketing elements, VR experiences should align with customer involvement levels to maximize their potential for brands. https://doi.org/10.1515/9783110980561-007

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Before we discuss how to account for or incorporate customer involvement in VR, we must first discuss the kinds of customer involvement and the processes through which customers’ beliefs, attitudes, and behaviors can change vis-à-vis involvement.

Types of Customer Involvement There are two key kinds of involvement: product involvement and purchase involvement. Product involvement relates to the customer’s passion toward the product category itself. Think about customers who collect a certain kind of object or product. These customers tend to know a lot about the product category, will take the time to research recent developments or changes to the category, and often interact with the product category, whether they are purchasing from the product category itself or are just deeply interested in interacting with the product. Take cars as an example. People who love cars tend to know a lot about them, whether they have worked on them, read about them in magazines or online, attend trade shows or car shows where they get to see/ experience them, or own them. Of course, cars are just one example – your customers can be passionate about and highly involved in any kind of product. Some, of course, are specific objects like cars, handbags, or antiques, whereas others are broader or more abstract, such as creative and entertaining content (like anything Disney or Nintendo, which includes things like apparel, collectibles, food, park visits, games, movies/ shows, and so forth). Product involvement is long-lasting and less sensitive to contextual influences or factors. Thus, identifying types of customers with higher product involvement and designing experiences around those product categories is paramount. For example, if a VR experience involves a given product or category in which customers are likely to be highly involved, then customers coming to participate in the experience will be motivated by their natural interest in the product, and the focus of the experience should be on the product/category itself. Consider, for example, fandoms. Fandoms are entire communities of people united by their love and passion for a particular element of popular culture. Sports teams, TV/ movie/book series, celebrities and influencers, and similar famous entities often form the basis of fandoms, and naturally, they produce many millions of dollars in merchandising and other marketing opportunities, from T-shirts and stuffed animals to entire resorts and theme parks. Of course, these consumer subcultures are exciting and lead to quite the emotional investment among their members, which is what drives the levels of spending and involvement we see among their respective persons or objects of affection. For example, a Hogwarts-themed snow globe or a Cowboys-branded jersey can excite some customers and lead to purchases just because those products are inherently appealing and involving to fans. Naturally, VR experiences involving a common fandom will appeal strongly to those who are already fans and may also be of interest to people who, while they may not necessarily be fanatical in devotion to the

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franchise, would find the experience captivating if not entertaining. Star Wars, for example, offers multi-part games in which VR users can use the force to move objects and battle agents of the Empire with lightsabers and blasters. Meanwhile, you might be wondering what kinds of products outside of fandoms would lead people to be cognitively and/or emotionally invested at high levels. After all, what kind of interest might be generated by a kitchen sponge or a bag of concrete mix, especially when one compares those products to the fandom-driven monoliths of Disney or the NFL? However, as marketers, we should not dismiss the possibility of such levels of interest among products we consider to be mundane. In fact, marketers could use VR to increase product involvement through clever and interesting experiences. For example, a VR experience might take users into a sponge for a closer look at its design and the kinds of features that help with cleaning, inhibit bacterial growth, and promote foaminess of dish soap. Such an experience could be informative for consumers looking for sponge technology that works for their own kitchen needs. They might even find themselves unexpectedly knowledgeable of and attentive to sponges in their future purchases, which would (hopefully) work in favor of the brand featured in the VR experience. For more entertainment, perhaps users could take a tiny submarine into a sink full of soapy water to help a sponge user “attack” particles of grease and grime, perhaps with not-so-subtle quips of “Wow . . . that’s some tough grease! Should’ve used [insert brand name] instead of that brand!” or “See, this wouldn’t have happened with [insert brand name] because . . .” Similar kinds of experiences could be created for all kinds of products, which could help brands make stronger connections with their customers and potentially enhance their involvement in the product category. Purchase involvement relates to the customer’s involvement with the purchase process – involvement with the product itself might be higher or lower, but the customer attaches particular importance to the process of purchasing the product. That is, while involvement may not stem from importance or relevance the customer attaches to the product itself, the situation leading to the purchase might be highly important or relevant, which leads to a more temporary state of high involvement until the process concludes. For example, consider the purchase of a gift for a birthday, anniversary, or other event. Perhaps the customer wants this gift to be special, so they read online reviews, talk to friends and acquaintances, and browse the assortments of several retailers to identify one or more good options for the gift. The customer might also bring knowledge of the intended recipient’s likes and dislikes around the gift and narrow potential options to a smaller list accordingly. In this case, the product itself is not driving the customer’s involvement – the reason for the purchase of the product is. Thus, marketers for products or brands that are commonly linked to situational involvement should focus on identifying situations that are likely to occur surrounding the product(s) and designing experiences around those situations. For example, a customer may not be particularly interested in suits or dresses, but a special banquet

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or big interview might lead the customer to seek out information about the best suit or dress for the occasion. VR experiences in this situation might allow the customer to try on a virtual version of the suit/dress and interact with a virtual ballroom or office.

Explaining Customer Involvement: Dual Process Theories With these lesser versus greater levels of involvement in mind, scholars working in the marketing field have developed what are called dual process theories, which help to explain how customers process and are persuaded by incoming information and what is likely to influence their final decisions in that process. One such popular theory is the Elaboration Likelihood Model (ELM). In the ELM, a customer would follow one of two routes depending on their level of involvement: the central route, in which the customer is more highly involved and focuses more on the core message or proposition itself, and the peripheral route, in which the customer is less involved and focuses on surrounding, easier-to-process elements rather than the core message/proposition itself. To a customer following the central route, the merits of the message or proposition are important. The customer in this route is thinking more rationally, which offers an important opportunity for more lasting changes to beliefs. That is, customers in the central route are persuaded through information, which shifts how customers view the given product or brand on a fundamental level. The peripheral route, on the other hand, leads the customer to consider parts of a communication that are not part of the core offering yet require less of their mental resources to think about. For example, a customer might find the spokesperson attractive or might be positively swayed by the use of a favorite color or song. In these cases, the customers are making their decisions more emotionally. While the customer might not experience enduring, fundamental changes to their beliefs in this route, their attitudes are swayed by how pleasurable they find communications or experiences, which can lead to more short-term benefits. Another model commonly used to explain how customers process information depending on their involvement levels is the heuristic-systematic model (HSM). In this model, customers process information either systematically, in which they carefully deliberate and consider information relative to their knowledge and experiences with other, related topics or objects, or heuristically, in which they take a “path of least effort” in processing the information. That is, for a customer in the systematic route, information is important, and the customer will invest as much mental effort as necessary to reach a conclusion or decision that they feel is sound. However, the heuristic route represents an opposing approach: the customer only thinks about incoming information extensively enough to reach a minimum acceptable threshold. While each of these models can help managers explain or predict how customers respond to general information about a product or brand, an important question

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remains: what does involvement have to do with VR? We address that question in section “Customer Involvement in VR.”

Customer Involvement in VR: The Dual Model Cowan and Ketron (2019) developed a framework based on a customer’s level of involvement to illustrate how VR can lead to positive responses among customers (see Figure 7). Tangibility Product Knowledge

Sensory Information

Immersivity

Imagination High Telepresence Level of Involvement

Co-Creation

Consumer Responses (i.e., purchasing, loyalty, satisfaction)

Low Interactivity

Figure 7: Cowan and Ketron’s (2019) Dual Model of Involvement for VR.

Under high involvement, customers are actively processing the experience, and tend to use their imagination (relying on sensory information and their own prior knowledge to do so). These consumers are more likely to engage in co-creation – that is, a process in which customers contribute alongside marketers to generate value in a product. Cocreative elements of the VR experience are explored in more detail in Chapter 11. They serve to enhance spatial presence, which thereby fuels outcomes such as purchases, satisfaction, loyalty, and WOM. Because of the cognitive investment required along this route, this kind of experience likely leaves longer-lasting effects on consumer responses as the experiences are certain to be more central and memorable to the customer. Further, the integration of the imagination, fueled by prior product knowledge as well as sensory inputs, creates an excitement factor that cannot be matched in the low involvement route. Research suggests that the high involvement route is likely to be more successful for hedonic brands (i.e., brands that offer fun and enjoyable benefits). Meanwhile, under low involvement, customers process the experience more passively and may lack the ability to think deeply for various reasons (e.g., they’re tired, anxious, or lack interest), so customer outcomes under low involvement are influenced

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more by interactivity – that is, the ability of the consumer to engage with the experience at a more superficial level. By making an experience easy in terms of the customer’s participation and ability to control elements of the environment via interactivity, consumer responses can be boosted. However, along this route, customers are processing the experience more peripherally (i.e., focusing on easier-to-evaluate heuristics, like how easy it is to use the platform, rather than the core message or content itself). Thus, affecting customer beliefs, changing customer attitudes, and realizing longer-lasting imprints on loyalty and WOM can be more difficult along this route. Utilitarian brands (i.e., those offering functional benefits) are more suited to the low involvement route. Moreover, marketers might be interested in teaching consumers something that they hadn’t already known. In this case, consumers might possess lower levels of involvement. Yet, in order to get them to process information more deeply and learn, as marketers, we need to reroute them to the top path – that is, the high involvement route to persuasion. Academic research shows that increasing spatial presence (e.g., making the virtual environment feel like the real environment) boosts vividness and imagery associated with the environment, which can lead consumers down the high involvement path. This is connected to the idea of immersion outlined in Chapter 2, where creating the right environment can propel consumers to process the content more deeply, even with prior low involvement. Yet, when consumers have high product knowledge and VR experiences attempt to teach them something that they are already familiar with, it can reduce positive responses toward the brands that create said VR experiences. It’s only by enhancing the VR experience through the context (e.g., incorporating haptic information to increase tangibility and immersivity) and providing consumers with more sensory information do they engage consumers’ imagination once again, and this can buffer against any negative consumer reactions. Another means to move consumers to process information more deeply along the high involvement route, even though they might report low product and purchase involvement, is to include an avatar. This is somewhat detailed in Chapter 2, but is particularly relevant for increasing consumer involvement. Specifically, when marketers allow consumers to customize their own avatars, either through the virtual world environments where marketers and brands can participate, or through the marketers’ virtual channels, consumers feel more emotionally connected to the avatar. This leads to higher involvement and repeated interactions with the avatar, including the virtual environment.

Implementing a VR Strategy Based on Customer Involvement Given these differing pathways to consumer responses and the nature of how each route affects those responses, marketers seeking to create VR experiences should consider the likely levels of involvement of their customers before embarking on a VR

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program. This, of course, raises an important question: how can marketers anticipate customers’ level of involvement? Answering this question requires consideration of another question: are customers likely to approach you from the outset with a higher or lower level of involvement overall? Some further questions to consider will help you better anticipate customer involvement: – What are you offering? Are you selling fast-moving, high-volume packaged goods or low-cost durable products such as power tools? Are you selling expensive luxury automobiles, homes, or vacations? These two sets of products differ markedly in not only cost but also emotional appeal, and customers will be in very different mindsets when they approach these situations. Generally, lower-priced products will lead to lower involvement, but price is not the only factor to consider. Do people use your products to achieve some kind of functional task, or do people use your products to have fun? You should also consider the likely situations around why your customers seek to interact with you: are they trying to learn a skill, gain more experience interacting with a virtual version of your products, or simply have a blast? Answering these questions should subsequently guide the way in which you develop VR experiences for your customers. – What kind of involvement are your target customers likely to have? Does your brand focus on one or more product categories that attract high-involvement customers? Some product categories, such as cars, furniture, or entertainment, may be naturally more involving. Others, such as fast-moving consumer goods, may be less involving. Of course, following the above suggestion that VR could be used to generate excitement, customers’ post-VR involvement may be enhanced through an experience, but marketers should be aware that lower-involvement customers might at first prefer an interactive experience rather than an immersive and imaginative one. More on post-VR consumers can be found in Chapter 14! Does your brand sell products that tend to be situationally involving? For example, champagne (or, in many cases, sparkling wine, as some would be quick to point out that champagne is only champagne if it comes from the Champagne region of France) is a common product used to celebrate special occasions. Those special occasions are what might generate higher involvement in selecting a good champagne/sparkling wine, not the champagne/sparkling wine itself. Regardless of inherent interest or excitement otherwise, are your customers likely to be preoccupied or worn down by prior decision making or other kinds of thinking? For example, customers who have worked a full day at their jobs or spent hours studying for their exams are likely to be physically and mentally tired or worn down. In these situations, customers may experience cognitive depletion – that is, a great deal of prior information or decision-making wears down the customer’s ability to think about new, incoming information. Customers with depleted cognitive resources may not be in the

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frame of mind for a more cognitively demanding experience compared to customers who are physically and mentally “fresh.” Thus, marketers might find more success with lower-involvement experiences among these customers. Of course, brands may be able to still appeal to higher involvement levels by carefully designing experiences that are exciting and not overly taxing, cognitively speaking, by focusing on the hedonic nature of those experiences. – What is the nature of exchange? How customers generally interact with you is a strong predictor of how involved they are with your brand. Do your customers typically buy from you in discrete transactions – that is, do they interact with you only to make purchases, and are those interactions more superficial? Or is there a deeper kind of interaction, one in which customers work closely and extensively with you to make purchases? Is the nature of your business such that customers and service providers get to know each other and form relational bonds? In the former case, your customers are likely to be lower in involvement; in the latter case, they are likely to be higher. – What is your brand identity as it relates to involvement? As a brand, is your mission to entertain? To inform? To enable? In what ways do you seek to entertain, inform, or enable your customers? Hedonic brands – that is, those seeking to entertain or appeal to pleasure – align more closely with the high involvement route given that route’s sensorial and exciting nature. Meanwhile, utilitarian brands – those seeking to perform a function or simply to inform – should focus on creating an interactive, easy-to-use experience that aligns with the low involvement route. That is not to say, however, that hedonic brands must always stick to the high involvement (and utilitarian brands to the low involvement) route. Rather, consider your brand in light of the goal(s) you have for VR. Are you trying to make an otherwise mundane product – light bulbs, for example, or the kitchen sponge example from the “Types of Customer Involvement” section in this chapter – more exciting? If so, your VR goal is more hedonic, and you may benefit from including some imaginative or immersive elements, even if your primary focus for the experience is more on interactivity. – What opportunities do you have to influence customer involvement ahead of time? While involvement may be inherent to the customer based on their personality or situation(s) beyond marketer control, marketers are not completely powerless when it comes to customer involvement. Your messaging to customers, for example, might focus on the importance of your product to a particular situation or even to everyday life. If you can persuade your customers that they should be invested in their product selection or use, then customers might approach their next interaction with you in a

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higher state of involvement. Likewise, there may be a means to increase customer involvement through enhancing spatial presence, as previously mentioned. – What role does competition play? When considering your competition and customer involvement as it relates to VR, a clear question comes to mind: what are your competitors doing in VR? Are they offering more (or less) immersive or interactive experiences? How do consumers engage in those experiences? Are they popular or well-received? Of course, just because your competitors might be doing something in VR does not mean that you should try to duplicate it. Rather, you should consider how your VR experience(s) could offer a clear sustainable competitive advantage. – What is your goal with your VR experience? Are you simply trying to offer a unique way for your customers to interact with you, or are you hoping to offer an immersive and powerful experience for your customers? Are you trying to change customers’ beliefs about your product or brand, or are you trying to get customers to see you more positively through a light-hearted, easy-going experience? – What kind of VR platform(s) are you considering for the experience? Are you aiming to do something that customers can experience from anywhere, anytime? Or are you more inclined to bring customers into a common space, such as your store or a kiosk or pop-up in a shopping center, to participate in the experience? While getting customers to download a VR game or other kind of experience on their own requires a bit of initial mental buy-in as well as appropriate VR equipment, customers benefit from the convenience of time and location when they can participate in experiences at home. Meanwhile, getting customers to visit physical locations in the marketplace requires more time and effort from customers, but customers willing to do so are also likely higher in involvement as a result of that greater invested time and effort. Thus, if you are planning to develop a more remote kind of VR experience, you may find greater success with less involving, more interactive features. However, if you are planning an experience in a physical location, really make it count – utilize immersive VR technologies, such as full headsets or virtual rooms, and use sounds, smells, and touch to optimize the experience and “wow” the customer! Expert Opinion 6 Tupac Martir – Founder and Creative Director, Satore Studio, Lisbon, Portugal We have a show called Cosmos Within Us, which is this idea of bringing performance in real time with musicians, voiceovers, dancers, and haptics and taking people through a journey of someone’s mind and memories while creating this idea of loss and understanding what loss actually means for the human being. In Haita, for example, we are trying to uniquely showcase the problems that exist with migration – the number of people passing through, their entire journeys and the accompanying sadness, and the people that are left behind. We are trying to create a brand new type of strategy of how

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to create live music and how we can create one single element that then feeds others. So, every single piece has a different reason to exist. What makes each piece powerful is the baggage the people bring. The interactors bring a whole lot of baggage from themselves into it, and all we are doing is trying to connect with that baggage through universal themes. We are not trying to hide away from it – we are going to showcase the pain and “push buttons”. To do that, we have to spend a lot of time trying to figure out how to push those buttons – what things work and do not work, what serves the story and what does not serve the story. I have been working on some concepts for four or five years. In fact, I have one concept that I have been working on for twenty-five years! Every single good piece that you see has taken at least eighteen months to make – if you are going to rush it, then you would be compromising on everything. Trying to create a piece that is engaging and generates a connection between the user and whatever the user is watching takes time. You have to do a large-scale alpha test, beta test, and audience testing before rolling it out. Even prior to audience testing, you need about eight months, and with audience testing, they will give you feedback, and you then have to work on it for more months (perhaps testing again with audiences) until it is ready for launch. VR might not be right for all clients as there are stories that are better told on television, radio, or cinema. In creating VR experiences, I believe in research. I believe in sitting down and working through things. I believe in a process. All of these elements that we are doing are part of the creation process. There is a lot of trial and error, seeing how something works and how one thing is incorporated with something else. For example, we see if the music is correct and whether we need to change the octave (or some other musical component). It is vital to understand what every single piece of the entire parcel is doing so that it becomes a cohesive combination of elements and not just different elements playing at the same time. So, be sure to spend time doing your research, and be sure to see what others have done before. The chances are good that someone has done something similar, or at least parts of something similar, that you can study and compare to your own plans.

Chapter 6 Checklist –

– – – –

Involvement leads to differences in how customers approach information in a product or brand situation, with higher involvement customers focusing on core elements and thinking more deeply and lower involvement customers focusing on peripheral elements and thinking more superficially. When customers are likely to be high in involvement, VR experiences should stimulate the imagination through sensory inputs and memory cues. High involvement offers greater potential for telepresence and co-creation. Low involvement offers greater potential for interactive, “easy in, easy out” engagement. VR strategies should be tailored according to likely levels of customer involvement.

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References Beattie, A. E. (1983). Product expertise and advertising persuasiveness. Advances in Consumer Research, 10, 581–584. Chaiken, S. (1980). Heuristic versus systematic information processing and the use of source versus message cues in persuasion. Journal of Personality and Social Psychology, 39(5), 752–766. Chitrakorn, K. (2021). New-era AR, VR pop-ups: Enough to lure customers in? Last accessed July 10, 2022, from https://www.voguebusiness.com/consumers/new-era-ar-vr-pop-ups-enough-to-lure-customers-in Cowan, K., & Ketron, S. (2019). A dual model of product involvement for effective virtual reality: The roles of imagination, co-creation, telepresence, and interactivity. Journal of Business Research, 100, 483–492. Cowan, K., Spielmann, N., Horn, E., & Griffart, C. (2021). Perception is reality. . . . How digital retail environments influence brand perceptions through presence. Journal of Business Research, 123, 86–96. Celsi, R. L., & Olson, J. C. (1988). The role of involvement in attention and comprehension processes. Journal of Consumer Research, 15, 210–224. Ketron, S., Spears, N., & Dai, B. (2016). Overcoming information overload in retail environments: Imagination and sales promotion in a wine context. Journal of Retailing and Consumer Sciences, 33, 23–32. Mollen, A., & Wilson, H. (2010). Engagement, presence and interactivity in online consumer experience: Reconciling scholastic and managerial perspectives. Journal of Business Research, 63(9–10), 918–925. Orth, U. R., Lockshin, L., Spielmann, N., & Holm, M. (2019). Design antecedents of telepresence in virtual service environments. Journal of Service Research, 22(2), 202–218. Petty, R., & Cacioppo, J. (1986). Communication and Persuasion: Central and Peripheral Routes to Attitude Change. Berlin, Germany: Springer-Verlag. Petty, R. E., & Cacioppo, J. T. (1986). The elaboration likelihood model of persuasion. In Communication and Persuasion (pp. 1–24). New York: Oxford Springer. Spears, N., Ketron, S., & Ngamsiriudom, W. (2016). Three peas in the pod of consumer imagination: Purchase task, involvement. Journal of Consumer Behaviour, 15, 527–537. Spears, N., & Yazdanparast, A. (2014). Revealing obstacles to the consumer imagination. Journal of Consumer Psychology, 24(3), 363–372. Spielmann, N., & Mantonakis, A. (2018). In virtuo: How user-driven interactivity in virtual tours leads to attitude change. Journal of Business Research, 88(7), 255–264. Voss, K. E., Spangenberg, E. R., & Grohmann, B. (2003). Measuring the hedonic and utilitarian dimensions of consumer attitude. Journal of Marketing Research, 40(3), 310–320.

Part III: Purpose-Driven Design of Your VR

Chapter 7 Boosting Consumer Engagement via VR Marketers have a wide array of methods to engage consumers in both the offline and online domains, but few of those methods are as potentially engaging as VR. In this chapter, we discuss strategies for employing VR to increase consumer engagement with the brand, with each other, and with the world around them. Namely, we discuss why VR is so engaging compared to other kinds of experiences: VR is capable of producing flow states, which heighten users’ focus and lead to losing track of time. Further, we outline different tactics that marketers should consider when designing VR systems and virtual environments.

The Concept of Engagement Engagement refers to the psychological state of the customer in which the customer experiences interactions with objects, services, or other customers in a given domain or environment. Importantly, engagement leads to increased involvement (see Chapter 6 for more on involvement, including its forms and benefits), but engagement is a broader concept worth its own discussion here in this chapter. Engaging contexts can take many forms, including advertising, social media, and other kinds of brand interactions. Whereas earlier definitions of engagement refer to such interactions as direct – that is, the customer interacts with people or objects in a real, physical environment – in VR, interactions have a different nature. VR engagement would refer to virtual interactions with objects, services, or other customers. However, that is not to say that VR is inferior as a mechanism of engagement! On the contrary: VR can be as engaging as, if not more than, more conventional environments and interactions. Importantly, VR is capable of creating a specific kind of engagement with customers –namely, dialogic engagement, or an approach to engagement in which customers have a kind of two-way communication with those in the environment. At the heart of this notion is the tendency that communications within any type of modality are dialogic, including text, motion pictures, audio, animation, imagery, and other media. The capabilities of VR offer more opportunity for dialogic engagement compared to more conventional digital interactions as the environment overcomes dialogic limitations in the real world. For instance, consider a situation in which you send an email to a customer service agent or inbox. This type of communication relies on waiting for a reply and has only limited means of intervention – the asynchronous nature of email coupled with its lower dialogic pressure (i.e., the lack of real-time interaction does not allow for a deeper conversation). Meanwhile, in an online chat with a customer service agent, the dialogue is more two-way and interactive, and that interaction can change depending on the speed of information. Within VR, environments can be designed to take that kind of https://doi.org/10.1515/9783110980561-008

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synchronous and interactive dialogic engagement even further, which would help marketers to boost customer involvement and realize the subsequent benefits. Engagement requires four kinds of value: utilitarian value (e.g., cognitive involvement), experiential value (e.g., emotions and other feelings), behavioral value (e.g., purchase intentions), and social value (e.g., enhanced connections with other users and with brands). More recently, engagement has been considered as something that is holistic and comprehensive, such that all touchpoints can be used to contribute to a brand strategy targeting customers. Further, engagement is responsible for informing the entire customer experience, making its holistic nature even more prominent.

Engagement Potential of VR Types Based on Dynamicity and Interactivity Some forms of VR are more amenable to dialogic engagement than others, as shown in Table 3. In terms of dialogic engagement, these forms of VR can be classified according to two dimensions: dynamicity, or the extent to which the environment is responsive to and can be changed by user inputs or interventions, and interactivity, or the extent to which users can interact with other users and with elements in the environment. The intersections of these two characteristics at varying levels offer differing potential for dialogic engagement. Table 3: Forms of VR Based on Dynamicity and Interactivity. Interactivity

Dynamicity

Low

High

Low

Simulations

Automated Virtual Environments (AVEs) VR Games

High

-VR Videos

Virtual Worlds Metaverses

For instance, virtual worlds or metaverses enable the highest level of engagement because they are naturally interactive and more dynamic (e.g., users have endless possibilities to change these worlds and the environment and others react to changes). Additionally, users control their “virtual selves” through the choices their avatars make in the environment as well as the choices users make in customizing said avatars. These forms of VR can become highly dynamic, with continuous changes to avatars or the environment. Meanwhile, heightened levels of interactivity can buffer against the negative experiences of not being able to try on a real product or touch an object physically – the ability to interact with those products or objects, while not

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haptic in the most physical sense, affords a sense of control that could compensate for lack of physical touch. Importantly, interactivity can take many forms, such as talking to others, manipulating objects, moving within the space, and making choices. By their nature, virtual worlds and metaverses maximize these features. For AVEs and VR games, interactivity is high, such that users can move around, grab or otherwise manipulate objects, and control the experience, yet there are preset elements that characterize the experience and reduce dynamicity. In other words, there is no ability to intervene in the experience. For example, in the Anne Frank House VR experience, users only have the possibility of starting the experience at the bookcase that hides the door to the secret living quarters. Users cannot visit the outside of the museum or wander outside the parameters of the specific experience. For marketers, such experiences afford interactivity, which can still lead to higher engagement among customers, while also allowing marketers to better control the narrative and parameters of the experience. 360-VR videos represent VR content that is not interactive. Rather, users passively watch the narrative as it starts and ends as expected or scripted. Users have control over the extent to which they watch the video in its entirety, pause it, or rewatch it. On the other hand, dynamicity can be higher because of the potential for co-creation activities. While this is discussed in Chapter 11, we want to briefly say that users have the ability to produce their own content in such a format and intervene in how others view the experience. Lastly, simulations, generally speaking, have lower levels of interactivity. Users can “walk” or otherwise move within the environment but have limited ability to interact with objects. Consider a walk in the Street View of Google Maps. While a user might see a car, the user would not be able to open the doors of the car or drive it down the street. Similarly, dynamicity is also lower because individuals cannot intervene or change these scenarios. Thus, the potential for customer engagement in simulations is comparatively lower to the potential for other forms. However, for marketers, these kinds of VR are simple, require fewer resources to create, and are easier to implement. Those wishing to pre-test ideas or otherwise experiment with VR concepts at early stages might find simulations to be a less resource-demanding avenue.

Why Is VR More Capable of Enhancing Engagement Compared to Other Media? As highlighted in Chapter 2, VR (vs. other media) is more immersive, helps consumers experience presence, and can elicit a state of flow. First, immersion makes consumers feel more plugged into the experience, such that they get lost within and absorbed into the environment or content. This is easier to accomplish in VR because certain VR equipment (e.g., HMDs) blocks out visual distractions while also providing elements like sound and haptic feedback (i.e., vibrations), which help to separate the user from the real world. Likewise, virtual environments can be designed to resemble the real world,

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have an involving and compelling narrative, and foster greater enjoyment. Even if the world is more fantastical in its design – for example, the environment is fully animated or depicts a fictional world, such as planetary environments or warships in Star Wars – the user can still become fully immersed in those environments, and suspension of disbelief can allow the user to experience the environment as “real.” Compared to more traditional media, where more emotive content may be necessary to immerse users in the narrative, for VR, affective content need not be present to experience high immersion or engagement. Thus, marketers have wider latitude in terms of types of experiences and elements of environments that they can create in VR to boost engagement. Second, research shows that VR (compared to more conventional media) is more capable of increasing perceptions of spatial, social, and self-presence (see Chapter 2). Because VR technologies can faithfully re-create real world environments or even develop fantasy worlds that seem very real, users are able to feel that they are physically in the virtual world rather than being in the real world and simply visiting a virtual one. In fact, it is the perception that the customer has traveled to and is in the virtual world that makes content more engaging. Take a VR shop as an example. While they are navigating the virtual environment of the shop, customers can pick up products, turn products around for a better look, and/or manipulate products further by changing colors, patterns, textures, and/or other product features. These interactions contribute toward presence, which influences flow, enjoyment, and even purchase intentions. Meanwhile, with more conventional digital shopping platforms such as websites, customers have to rely on textbased information (i.e., written descriptions) to obtain the same information and have to click on pre-set images to see different features of the product. Some websites have attempted to compensate for the lack of interactivity and dynamicity in these situations by offering elements such as 360-degree rotation or the ability to quickly change from one image to the next, but the product cannot be manipulated further. Third, VR is capable of prompting states of flow. Recall, also from Chapter 2, that flow is not something that ebbs. Instead, it either happens (i.e., is present) or does not (i.e., is absent). Relevant for engagement, flow occurs when there is high challenge to a task and also high user ability. Challenges could emanate from using the VR system but more often emerge from the tasks users need to accomplish within VR (e.g., paddling in a canoe, moving a bookshelf, picking products off the shelves during a virtual shopping trip). Likewise, user ability comes from the familiarity and comfort levels users have with moving and interacting within VR environments. However, when users are new to VR systems, they may experience frustration in learning how to move or customize their avatars, move within the VR, or learn the different buttons and controls. In this case as well, the felt inability would threaten flow. For these customers, engaging in VR content with lower challenges might be best to inspire flow. In other words, by pairing the user skill with the right involvement/dynamicity, users might feel more engaged. For beginners and those with VR sickness, VR forms with low interactivity/low dynamicity

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might be best for flow (e.g., 360-VR videos, simulations). As such, VR can be tailored to the individual to generate flow states, which lead to engagement.

The Four Values of Engagement in VR Research indicates that certain VR features, mostly tied to immersion, presence, and flow, are responsible for increasing engagement. However, as referenced above, these responses work through the four values of engagement: experiential, utilitarian, social, and behavioral (see Figure 8). Interactivity and dynamicity can influence all four of these values.

Experiential Value

Behavioral Value

Utilitarian Value

Social Value

Figure 8: The Four Values of Engagement.

Experiential value, compared to utilitarian value, has a stronger direct, positive influence on customer engagement in VR content. Experiential value is influenced in VR from the vividness and realism of the content, though vividness has a more prominent influence on experiential value. Marketers can influence experiential value in VR narratives. Specifically, VR content that is more entertaining, exciting, enjoyable, and fun will result in higher dimensions of experiential value. For example, TopShop has a VR 360-video on YouTube in which users can take a virtual slide through the streets of London. This experience is not designed to provide product information or to provide a narrative about the brand. Rather, the only thing that it does is convey excitement and allow customers to have two minutes of fun. For users new to VR, experiential value might be more important in creating engagement as the novelty of the experience and reduced cognitive requirements would align more clearly with experiential (vs. utilitarian, social, or behavioral) appeals. Utilitarian values more often, in comparison, relate to learning and improvement, which are cognitively oriented. Consider the notion that VR systems increase perceptions

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that products and environments are more proximal. In doing so, VR systems make objects (products or otherwise) seem more authentic. Also, like experiential values, utilitarian values are influenced by vividness and authenticity. However, the authenticity and realism of the environment are more predictive of utilitarian values in VR. When marketers want to teach consumers something about their products or brands, a utilitarian values approach might work well. In this case, the narrative should be conducive to learning. A relevant example is Swarovski’s virtual atelier. Through a virtual environment that is linked to MasterCard, users can handle virtual objects, learn more about them, and even purchase them through the headset. While this experience might be experientially rewarding, the chief aim is to create utilitarian value. Social values are particularly important for engagement in virtual worlds as social interactions contribute to the dynamicity of the VR environment. Some AVEs/VR games provide the ability for users to interact with artificial intelligence and/or other VR users. Although this ability is initially quite limited to certain apps within VR systems, and the interactions are also relegated within a space to certain activities, there remains a high ability to interact within the environment, which offers potential for meaningful social interactions and value. Social values need not be realistic to have a positive effect on engagement. In fact, social values are more important than spatial presence in creating a sense of immersion. Thus, for environments where social values can be leveraged (e.g., virtual worlds, CAVEs), marketers should tap into the social dimensions of the VR environment. While these environments allow the use of both artificial and sentient beings, marketers who use sentient beings in VR are able to produce higher social values for engagement. Finally, because engagement is related to flow, presence, and immersion, engagement is also related to customers’ behaviors, such as future engagement and patronage. In order to get customers to return to the experiences, the latter have to feel enjoyable, which is connected to engagement. In turn, engagement is a prerequisite for enjoyment and influences customer satisfaction, including return/repatronage intentions, purchase behavior, and ultimately customer loyalty. The goal for marketers should be to encourage brand loyalty through VR interactions. Thus, loyalty and interaction with the brand, retailer, or organization, is a relevant indicator of engagement. This leads into the benefits marketers can obtain from the use of engaging VR!

The Benefits of Customer Engagement in VR What does customer engagement do for firms? In fact, engaged customers play a key role in marketing activities. For many firms, engaged customers create, disseminate, and consume marketing content, which may have the potential to go viral and gain widespread (hopefully positive!) attention. As highlighted in Chapter 11, they can cocreate experiences and produce value for firms, as well. Further, several studies outline the positive consequences of customer engagement, from financial benefits (e.g.,

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profitability, sales) to relational benefits (e.g., loyalty, commitment) and even emotional brand attachment (e.g., trust, self-brand connection). In other words, there seem to be many benefits that VR offers in terms of engagement. Overwhelmingly, scholarly research in VR indicates that VR experiences, videos, and content tend to lead to these types of benefits more strongly than any other indirect interactions.

How Can You Best Encourage Engagement Through VR? Given the above, when considering how to create engagement in VR, you should ask yourself the following questions. – How familiar are your customers likely to be with VR? As explained above, highly interactive and dynamic VR can be more conductive to flow, which might lead marketers to try to make their VR experiences as interactive and dynamic as possible. However, when customers lack familiarity with the technology, they may become frustrated, which can prevent flow states from activating. Thus, marketers should be sure to match familiarity/experience with interactivity and dynamicity to create optimally engaging experiences. Further, experiences should be designed to maximize experiential value, which requires less cognitive investment from customers than other kinds of value. – Which values of engagement align most with your brand identity or goals? Certain brands may have identities that align more closely with certain values. For example, a brand focused on entertainment might seek to bolster experiential value, whereas a brand focused on learning might realize more potential from utilitarian value. Some brands are more socially oriented, which would lead to a greater emphasis on social value. Thus, first consider your overall brand identity and which values offer more potential as a whole. However, you should also consider the goals you have for the experience itself. You might be more focused on learning, for example, but wish to offer users a quick escape from life (i.e., experiential value) or a way of making learning more social (i.e., social value). Ultimately, marketers would hope to realize behavioral value from their experiences, which can be enhanced when the appeals to other values are connected to the brand and its goals. – How much autonomy do you want to maintain over the narrative or experience? When VR experiences are highly dynamic, users are able to change the virtual environments according to their preferences. However, if you intend to design an experience in which the story needs to follow a defined path or the environment maintains certain aspects in certain ways, you should consider lower dynamicity in the experience. This

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can be important if you are attempting to teach customers via utilitarian value or to promote well-regulated social interactions in the creation of social value. – What are your capabilities in creating VR experiences? More elaborate VR experiences require more investment and effort on the part of marketers. Thus, while you might want to maximize interactivity and dynamicity, you need to be sure you are investing the necessary resources and have the required capabilities to make the experience high quality. Otherwise, the system may glitch or create actionreaction gaps in how users navigate and interact with the environment; these errors can disrupt flow and lead to lower engagement (if not total disengagement!) It would be better to create a less interactive and/or dynamic experience that works well. Expert Opinion 7 Natalie Cregan-Evans – Former Marketing Manager for Igloo Visions, Shropshire, United Kingdom, Now Marketing Program Manager at Virtalis If a business wants to increase brand engagement through use of VR experiences, there are several means to accomplish this goal. First, where you can, let the audience take at least some control of the experience, and under certain conditions higher control over the experience might be more desirable for increasing engagement. When you direct customers to take a particular path and force them on that journey, it can actually lead to customer disengagement. A way to give customers control is to create a VR experience that offers some points of interaction. So, if you design a VR experience in a VR headset, by letting individuals move themselves around and progress through the content themselves, that can enhance feelings of control and increase engagement. For CAVE experiences, like the ones produced by Igloo, these experiences are shared by a group of individuals. In these cases, engagement can be increased by encouraging individuals to get involved via social media. For example, Under Armour aimed to show the effectiveness of their Cold Gear under cold weather training conditions (see Figure 3). In creating the first immersive ice gym, Under Armour was able to enhance engagement in a number of ways. Firstly, when inside the Igloo space, the content on the walls displayed thermal images of the audience themselves as they were in the Igloo space, showing them how the product helped them regulate their body temperatures. On top of this, they created a hashtag and Instagram live stream that garnered a whole lot of coverage and engagement beyond the VR experience itself. Finally, when it comes to creating an immersive experience, making it a shared one is an ideal way to increase engagement. Using a shared immersive space like a CAVE or an Igloo space means that people can experience the content at the same time together as opposed to individually, which is often the case for VR headsets. In this way, shared CAVE experiences can become more powerful ones. When people can take part in VR experiences at the same time, they also tend to discuss them while participating. Though, this discussion also extends after the event as well.

Chapter 7 Checklist – –

Immersion, presence, and flow are powerful mechanisms for customer engagement. VR engagement depends on involvement and dynamicity, and these differ by VR types.

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Since customers differ in their degree of ability to use and experience with VR, pairing less (more) experienced users with less (more) interactive and dynamic VR systems is recommended. Experiential, utilitarian, social, and behavioral values underpin customer VR engagement. Compared to other media, VR is more engaging. VR engagement can impact customer loyalty and other downstream behaviors.

References Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12(2), 125–143. Anne Frank House. (2022). The Anne Frank House in virtual reality. Last accessed July 20, 2022, from https://www.annefrank.org/en/about-us/what-we-do/publications/anne-frank-house-virtual-reality/ Baldry, A., & Thibault, P. (2006). Multimodal Transcription and Text Analysis. Oakville, CT: Equinox. Brakus, J. J., Schmitt, B. H., & Zarantonello, L. (2009). Brand experience: What is it? How is it measured? Does it affect loyalty? Journal of Marketing, 73(3), 52–68. Brodie, R. J., Hollebeek, L. D., Juric, B., & Ilic, A. (2011). Customer engagement: Conceptual domain, fundamental propositions, and implications for research. Journal of Service Research, 14(3), 252–271. Brodie, R., Ilic, A., Juric, B., & Hollebeek, L. (2013). Consumer engagement in a virtual brand community: An exploratory analysis. Journal of Business Research, 66(1), 105–14. Chen, H., & Wang, Y. (2019). Product placement in virtual reality videos from the perspective of dialogic engagement. Journal of Interactive Advertising, 19(2), 133–147. Dessart, L., Veloutsou, C., & Morgan-Thomas, A. (2015). Consumer engagement in online brand communities: A social media perspective. Journal of Product and Brand Management, 24(1), 28–42. Dijkmans, C., Kerkhof, P., & Beukeboom, C. J. (2015). A stage to engage: Social media use and corporate reputation. TourismManagement, 47, 58–67. Fiore, A. M., Kim, J., & Lee, H. H. (2005). Effect of image interactivity technology on consumer responses toward the online retailer. Journal of Interactive Marketing, 19(3), 38–53. Gambetti, R., & Graffigna, G. (2010). The concept of engagement: A systematic analysis of the ongoing marketing debate. International Journal of Market Research, 52(6), 801–826. Ghani, J. A., & Deshpande, S. P. (1994). Task characteristics and the experience of optimal flow in human–computer interaction. Journal of Psychology, 128(4), 381–391. Hoyer, W. D., Chandy, R., Dorotic, M., Krafft, M., & Singh, S.S. (2010). Consumer cocreation in new product development. Journal of Service Research, (13)3, 283–296. Hutchins, E. L. D., Hollan, J., & Norman, D. A. (1985). Direct manipulation interfaces. Human–Computer Interaction, 1, 311–338. Moliner, M. A., Monferrer-Tirado, D., & Estrada-Guillén, M. (2018). Consequences of customer engagement and customer self-brand connection. Journal of Services Marketing, 32(4), 387–399. Mollen, A., & Wilson, H. (2010). Engagement, telepresence and interactivity in online consumer experience: Reconciling scholastic and managerial perspectives. Journal of Business Research, 63(9/10), 919–925. Neff, J. (2007). OMD proves the power of engagement. Advertising Age, 78 (27), 3–4. Oulasvirta, A., Tamminen, S., Roto, V., & Kuorelahti, J. (2005). Interaction in 4-second bursts: The fragmented nature of attentional resources in mobile HCI. Paper presented at the SIGCHI Conference on Human Factors in Computing Systems, Portland, OR.

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Papagiannidis, S., Pantano, E., See-To, E. W. K., & Bourlakis, M. (2013). Modelling the determinants of a simulated experience in a virtual retail store and users’ product purchasing intentions. Journal of Marketing Management, 29(13–14), 1462–1492. Sedley, R. (2008). Six theses on digital customer engagement in a troubled economy, available at www. slideshare.net/richardsedley/6-theses-digital-customer-engagement-and-the-troubledeconomy Sheridan, T. B. (1992). Musings on telepresence and virtual presence. Presence, 1, 120–126. So, K.K.F., King, C. and Sparks, B. (2014). Customer engagement with tourism brands: Scale development and validation. Journal of Hospitality and Tourism Research, 38 (3), 304–329. So, K. K. F., King, C., Sparks, B. A., & Wang, Y. (2016). The role of customer engagement in building consumer loyalty to tourism brands. Journal of Travel Research, 55(1), 64–78. Song, J. H., & Zinkhan, G. M. (2008). Determinants of perceived web site interactivity. Journal of Marketing Research, 72, 99–113. Steuer, J. (1992). Defining virtual reality: Dimensions determining telepresence. Journal of Communication, 42(4), 73–93. Van Vugt, H. C., Hoorn, J. F., & Konijn, E. A. (2009). Interactive engagement with embodies agents: An empirically validated framework. Computer Animation and Virtual Worlds, 20, 195–204. Vivek, S., S. Beatty, and R. Morgan (2012). Customer engagement: Exploring customer relationships beyond purchase. Journal of Marketing Theory and Practice, 20(2), 122–46. Voyles, B. (2007). Beyond loyalty: Meeting the challenge of customer engagement. Economist Intelligence Unit, available at www.slideshare.net/richardsedley/6-theses-digital-customerengagement-and-thetroubled-economy Wang, Y., & Chen, H. (2019). The influence of dialogic engagement and prominence on visual product placement in virtual reality videos. Journal of Business Research, published electronically January 18, doi:10.1016/j.jbusres.2019.01.018 Willems, K., Brengman, M., & Helena, V. K. (2019). The impact of representation media on customer engagement in tourism marketing among millennials. European Journal of Marketing, 53(9), 1988–2017.

Chapter 8 Changing Attitudes and Building Your Brand via VR VR can be a useful means to change consumer attitudes and share information about a brand. However, VR produces a different impact on changing attitudes compared to a purchase. Attitude formation takes place before the more involved process of purchase decision, so consumers are less motivated to pay attention and think about marketing messages and to interact with brands. In order to target consumers during attitude formation, marketers should focus on providing enjoyable, fun, and easy to process content. In this chapter, we outline several means for marketers and brand managers to use different forms of VR to shape consumer perceptions about brands. We also discuss various ways to change consumer attitudes based on recent research, and highlight best practices across different forms of VR.

What Is an Attitude? Attitudes are defined as an enduring classification of motivations, emotions, perceptions, and cognitions with respect to a target. In other words, attitudes reflect a way of thinking, feeling, and acting toward the target that is more long-lasting than moods or emotions in general. Further, whereas moods are not necessarily directed toward anything in particular, attitudes always have an intended target. As the definition above implies, the three components of attitudes include affect (e.g., disposition to like, emotions, or feelings), cognition (e.g., beliefs and evaluations), and behaviors (e.g., repeat purchases). These three components of attitudes are generally thought of as occurring within a sequence. Attitude formation comes from information processing, including processing emotions, cognitions, and behaviors. It starts when individuals are exposed to a target, either randomly or deliberately. After initial exposure, these individuals attend to the object (e.g., the service, product, or brand), and this attention can range from low to high levels. Next, individuals comprehend the object by interpreting it. Like attention, interpretation can occur at lower or higher levels. That means that individuals do not have to actively focus on the object in order to form an attitude toward it. For example, some research within VR gaming has shown that billboards within the games affect consumer beliefs. That is, anti-drinking and driving messages in the VR game affected game players’ beliefs, such that they were more negative toward drinking and driving post-play and even reported lower intentions to drink and drive. Attitude formation process influences the brand image perceived by the customers. Customers’ interpretations can involve brand performance, the feelings evoked by the brand, situational usage, image of typical brand users, and more. For example, customers might interpret that a high-end artisanal coffee brand is “for special occasions” or that it is “for hipsters.” Interpretations can also be more affect-, cognition-, or behavior-oriented. These are discussed in the next section. https://doi.org/10.1515/9783110980561-009

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Outlining Attitude Component Sequences and Their Contexts In traditional customer decision-making models, we generally see consumers evaluate offerings, form some opinion of them, and then act based on these thoughts and feelings. Therefore, marketers traditionally view attitude formation as starting from cognition, then following on to affect and ending in behavior. However, we also know that this route is not strictly followed by the majority of customers. See Table 4 for an overview of the various versions of this process, the purchase contexts that exhibit these sequences. Table 4: Hierarchies of Attitude Components. Sequence of Attitude Components

Purchase Context

Belief-Affect-Behavior Belief-Behavior-Affect Affect-Behavior-Belief Behavior-Belief-Affect

High Involvement Low Involvement Experiential Behavioral Influence

Marketing strategies of persuasion differ for customers within each sequence. Aside from the belief-affect-behavior sequence, another common sequence is that after forming some evaluations of the offering, a decision is made, and later, customers form feelings about the offering (i.e., belief occurs first, followed by behavior, and then affect ends this attitude sequence). In both of these sequences, belief starts the persuasion process. However, the context differs depending on high versus low involvement (defined in Chapter 6). In high involvement contexts, such as when consumers generally like a product category (e.g., wine connoisseurs) or when they are invested in the purchase decision (e.g., buying a car that requires substantial financial commitment), customers follow the traditional belief-affect-behavior route. On the other hand, when customers have low involvement, either because they do not have the motivation or desire to process information more deeply, or because they are mentally depleted and do not have the mental resources to process information, they will take the belief-behavior-affect sequence. See Chapter 6 for more details on how to capitalize on each of these persuasion routes using VR. A third sequence occurs when customers feel something toward a target first without knowing much about it. In this way, affect is formed first, and then customers act upon these feelings and emotions by buying the product. Only post-purchase will customers evaluate and engage their cognitive processes to understand how to think about the offering. As such, the sequence that these individuals take to form attitudes is affectbehavior-belief. The most common purchase context where such sequence can take place are experiential purchases. Whereas marketing often sees consumer decision making as rational, the experiential consumption places greater importance on the emotional aspects of purchasing. Customers do not always make rational choices, and experiential contexts take this into account. For example, a customer might feel excited

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about a concert or a music festival, and subsequently purchase their tickets. Cognitive assessment can kick in after the purchase – for example, assessing whether the festival is well-organized. Chapter 7 provides an overview of delivering experiential values, which would be a means to persuade customers who follow this attitude sequence. Experiential context also encourages consumer co-creation of experiences. The chapter on co-creation (see Chapter 11) goes into further details on how marketers can use VR to persuade. Finally, the last sequence of attitude formation starts with behavior, followed by belief and affect (their order is reversible). As such, this sequence follows a behaviorbelief-affect route. This purchase context exists as behavioral influence, and often goes by the moniker “impulse buying.” Like in the experiential context, customers in the behavioral influence context are nonrational actors that do not always think and evaluate offerings before making decisions. This route of persuasion relies on motivating individuals using reward/punishment systems and appealing to customers’ basic motivations (e.g., hunger) in order to cause immediate action. When grabbing a candy bar in an apparent act of impulse purchasing, which brand would you select? Would you go for a new, previously unseen candy, or would you select a familiar brand name? Most often, customers are not attending to information that is new. Rather, they are processing information from brands, products, and firms where they already have some attitude formed. Relevantly, customers’ memories help them guide exposure and attention processes by allowing them to anticipate certain features and refer to their prior knowledge. Tapping into memories can be highly predictive of consumers’ decision-making.

Memory Systems and Attitudes There are three types of memory systems that customers tap when processing information: sensory, short-term, and long-term. The first, sensory memory, is engaged at the preattention stage, and this is where information is first registered. Information and objects in the environment are processed via the senses, and may not be processed any further. The sensory memory, thus, is initial and fleeting. Behavioral influence contexts (i.e., “impulse buying”) attempt to engage the sensory memory system without involving short-term and long-term systems until after a purchase has been secured (i.e., behavior-belief-affect). If customers continue to process information, then short-term memory is engaged. Sometimes called working memory or temporary memory, short-term memory involves active information processing. If memory is seen as a computer system, then working memory would be similar to the applications open and engaged on a computer. Its available capacity is not unlimited. This is why phone numbers are often chunked together as chunking makes it less burdensome for us to store (i.e., our brains process these “chunks” as single items rather than strings of unique numbers). Clutter, like the number of applications open on our computer, makes it difficult to process new information, and can impede information processing. That is, the less available space within

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working memory, the more we are at risk of information overload. Similarly, when we try to run too many applications at once on a computer, the computer is at risk of crashing. When their short-term memory is busy, customers may process information in the environment incorrectly or fail to move it from sensory memory to short-term memory. Even if processing takes place, it is likely to stay in the low involvement context (i.e., belief-behavior-affect) when memory is overloaded. If customers have “space” in shortterm memory for deep information processing, then they will likely follow experiential (affect-behavior-belief) or high involvement (belief-affect-behavior) purchase paths. After processing the information within short-term memory, individuals then store their attitudes in long-term memory, where it is encoded as a semantic or episodic memory. Semantic memory is akin to a “mental thesaurus” of symbols, concepts, and relations that feels like something “known” rather than merely “remembered.” As such, semantic memories involve verbal and static visual material through connections called nodes. The most salient things that come to mind when one says McDonald’s – for instance, golden arches, burgers and fries, playground equipment – represent the brand’s semantic memories. Often, this is where sensory information, factual information, and even perceptual information is contained. Brand attitudes are reflective of semantic memory of brands and would reflect the general favorability of brands to customers. Episodic memory, on the other hand, reflects a subjective experience in which the individual is akin to the narrator, central to the information. For example, a customer might remember a visit to McDonalds that took place last week, including the details of their order, the table where they sat, and the conversation they were having with a friend while enjoying their meal. These memories can play like episodes on television, though they are not stored like single episodes. Rather, memory markers help to record the sensory and environmental changes that occur during an experience, and these markers facilitate the memory. Thus, episodic memories are subexperiences in which certain clusters, based on memory markers, may be more memorable than others. Unlike advertising and indirect experiences, direct experiences tend to promote greater information processing and memory because their content is more vivid and concrete. As a result, direct experiences are more accessible from memory and tend to have a stronger impact on customers’ attitudes. This can be partially explained by the fact that customers are more confident having experienced something first-hand. As VR experiences are more vivid and concrete than experiences from other types of media, VR represents a direct experience and has a powerful ability to influence brand attitudes. Scholarly research takes this further by showing how some customers who have difficulty forming attitudes can do so following a VR experience. For example, tourists unsure about wind turbines formed attitudes more readily and felt more confident predicting their own behaviors following VR experience. In this study, individuals either took part in a VR experience of a wind farm, or viewed a simple photo of the same wind farm. Afterwards, they were asked to predict how the wind farm presence would affect their visits to a destination. The VR experience (compared

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to a regular photo) made them more inclined to think that the wind turbines would negatively impact their visits to the island.

Information Processing and Attitude Formation in VR As opposed to other types of media and even real environments, many VR systems block out distractions and noise, and so enable focused information processing. More focused cognitive processing during a VR experience results in an enhanced ability to take in more details – and form attitudes! More immersive content can enhance information processing, but if the content is made to be too vivid and rich, then, like in the real-world interactions, consumers can also feel overwhelmed. In this vein, it is imperative that marketers create VR content that is appropriate to the context that they want to emulate. For cognitive components of attitude (e.g., belief) to be activated, marketers should focus on simplifying virtual environments so that it is easy for customers to process and store in long-term memory. However, if marketers want to appeal to the experiential context and involve customers, strong emotions can be evoked. In this case, focusing on affect and designing the VR experience in particular to generate specific emotions is key. Further, recent research suggests that VR experiences can place episodic and semantic memories at odds with one another, such that VR experiences can foster construction of either sequences of events and a storyline or help individuals form brand images, associations, and connections of the brand to other specific elements. However, the two are not easy to accomplish together. Thus, marketers should have in mind whether they want to create a memorable experience or aid customer learning about the brand. For instance, the Aquarium-Museum in Liege has a VR experience in which users spend a set time in different scenes catching crabs and feeding porpoises. These activities are rather mundane on their own, but the focal aspects are listening to the narrator discuss facts about the animals and viewing each animal in 360, including its skeletal form. So, the goal of this VR experience is to teach participants about the animals, and less emphasis is placed on episodic memory. As another example, in the National Geographic VR experience mentioned in Chapter 2, the Antarctic expedition has a set storyline with dramatic scenery, harrowing challenges, and gamified elements. The narrative for the game merely instructs participants what to do. In this case, the goal of the VR experience is hedonic and perhaps indirectly inspires awe for the region. The focus relies on the episodic-like scenes and challenges with drama, and these provide the means for memory marker creation. Regardless of the intended routes to persuasion or appeals to certain memory systems, all VR scenarios help customers think about what the brand is like, and this thinking affects attitudes toward brands and organizations. Negative VR experiences can lead individuals to reassess their preexisting brand attitudes in potentially detrimental ways. However, positive VR experiences reaffirm and can even enhance

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preexisting brand attitudes. Thus, the beliefs, affect, and behaviors resulting from VR experiences influence customers’ perceptions of and attitudes toward the brand. It is also important to note that certain marketing tactics are more amenable to positive attitude change than others. These are discussed in the next section.

Enhancing Attitudes with VR: How Can VR Be Used to Affect Attitudes? – Is your goal to change customer attitudes via VR? How feasible is this? As we have suggested, changing customer attitudes is possible with VR. In fact, some scholarly research indicates that VR is best suited for attitude formation and attitude change, while other types of media have more potent effects on purchase intentions. This is why realtors use 360-tours of houses to help persuade consumers to visit those houses in person. Compared to regular images, 360-VR makes individuals feel like they are visiting the site, and they report more favorable attitudes toward both the homes and the agencies. Likewise, hotels have also been using simulations and 360-VR videos to help customers picture what rooms and other aspects of the property would be like. VR makes users feel more positive about staying in a hotel. After all, the benefit of VR is its concreteness, making an unclear image of something much “closer” and more vivid. In this way, individuals are better able to judge what the room would be like in a specific hotel: large or small, comfortable or uncomfortable (i.e., beliefs), and whether they like or dislike its décor (e.g., affect). These environments and objects appear psychologically closer, allowing individuals to use their imagination, which has repeatedly been shown to increase product evaluations. Additionally, marketers’ usage of VR to impact customer attitudes is very feasible. It can be accomplished at the brand retail site in-person, or in customers’ homes or other locations, such as when McDonald’s Sweden placed a Google Cardboard headset inside Happy Meals for kids to view VR brand experience at home. – Is your goal to change beliefs about the brand? In order to change beliefs, brands have several tactics available. The first recommendation is to use hedonic, sensory cues in the VR environment. Some sensory cues that can affect experiential value of VR environments include background music (e.g., coffee house music during a VR cafe experience) and haptic imagery (e.g., allowing individuals to zoom in to see the fine details of a rug’s texture). Both cues would reflect semantic, knowledge-based aspects of information processing, such that music or haptic cues would influence feelings of pleasantness around elements such as genres and textures. Scholarly research shows that introducing cues like these can increase attitudes toward brands, even when customers’ short-term memories are mentally depleted. For example, a 360-VR experience for BMW vehicles focusing customers on the texture of the cars increased brand attitudes for both individuals low and high in

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product involvement. In sum, to change beliefs about a brand, marketers could introduce sensory cues in VR environments. – Is your goal to enhance affect (i.e., emotions and feelings) toward the brand? To enhance affect toward a brand, marketers can use a tactic of including avatars in VR experiences. This approach can help individuals feel greater connection with and “speak” to the brand. While avatars are not always possible or useful to create in all VR systems, they would be particularly relevant for metaverses and virtual worlds, where users interact with others. Recent research shows that within virtual worlds, the brand manager, represented through an avatar, was the main source of attitude formation and emotional responses. It is also noteworthy that real life stereotypes carry over into VR worlds. For instance, avatars wearing black (vs. white) cloaks prompted people to act in accordance with cultural norms where a black cloak signifies sinister motives, and resulted in more aggressive intentions toward these avatars. In sum, brands can increase positive affect by allowing users to create avatars within the VR environment in which the brand resides. Companies should also be careful to design their own avatars to authentically represent the brand image. – How can you harness the benefits of flow and immersion to alter attitudes? Recall from Chapter 2 that flow, immersion, and presence are all linked to persuasion. Marketers can enhance certain VR characteristics that create flow, immersion, and/or presence, in order to influence consumer attitudes. To facilitate state of flow, users less comfortable with VR should be given no tasks or easy tasks within the VR environment. That is, there should be a balance of user skills and the challenges present in VR. When users find the technology new and unfamiliar, offering simple computer simulations or 360-VR videos would constitute such a low challenge. For example, initial research in VR suggests that easier tasks, such as test driving a car, leads to more positive attitudes toward the car brand. This also mirrors frameworks in information systems, suggesting that when technologies are easier to use, individuals will be more likely to use them again, and this impacts attitudes toward brands positively. Marketers should recognize the skill levels of their customers and design challenges within their experiences to match those skill levels. Likewise, when VR content is more immersive, it enhances experiential values related to affect and enhances attitudes. In this case, the gamified VR experience can take place in a VR headset, where users feel comfortable moving using their hand controllers. Lastly, a feeling of presence can also shift attitudes. For instance, the feeling of being present in the virtual environment improves attitudes and drives preferences toward a tourism destination.

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Expert Opinion 8 Tupac Martir – Founder and Creative Director, Satore Studio, Lisbon, Portugal VR can be very helpful in changing consumer attitudes. You can influence someone’s beliefs and emotions about something. In fact, there is scientific evidence supporting the notion that VR influences attitudes. In order to change someone’s attitudes about something using VR, one requires a lot of patience! It’s not easy, and it takes time to create content that is able to change someone’s attitudes. Moreover, it is more difficult to change emotions than mere beliefs. When seeking to change attitudes, there are several things to consider within VR. First, you have to take the time to understand the subject that you are speaking about, and the way that you want to interact with individual customers. This partly requires that you consider your goals and the relevancy of VR to accomplish these goals. What do you want consumers to believe or feel? How is VR relevant to the goal? How do you want to convey that message? How do you intend to present the message? What are the things that are happening in VR? Are there any haptics or sensory inputs? These are just a few questions to consider. Importantly, there is not one solution for all clients. Second, you need to spend the time to understand all aspects of your brand. What are the core values of that brand? How is the brand being perceived? What are the things that you want to change? How do you plan to change that? How are you going to make this happen? What currently is going well and not so well for the brand? What campaigns have worked or not, and why? It is dissecting so many things. Once you have that research and you understand the goals, you have to consider the aspects relevant for VR. If your goal is to make someone feel love in VR, think about the time frame you have to achieve your objectives. In a movie, you have one to three hours to get somebody involved into it. With television shows, you have several seasons of eight to twenty episodes. In VR, you have to do it really quickly. Review pieces within VR that other brands have done to identify what has worked well, and why. Use case studies to help you. Additionally, creating an engaging piece in VR takes time. In order to make sure you are achieving your goal with your target market, you have to do tests. Test with your audience and obtain feedback! Repeat testing again and again, until you fine-tuned the content and are able to meet your objectives.

Chapter 8 Checklist – – – –

VR can be designed to influence brand image and positioning by focusing on the semantic elements of memory and attitude formation. VR can be designed to influence the experience by focusing on the episodic memory and attitude formation. VR is a medium suitable for changing attitudes because it helps individuals make sense of more abstract ideas and can make offerings more concrete. Brands can take advantage of three key areas to affect brand attitudes: hedonic sensory cues, avatar use, and optimizing the environment to generate flow states.

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References Cowan, K., Spielmann, N., Horn, E., & Griffart, C. (2021). Perception is reality . . . How digital retail environments influence brand perceptions through presence. Journal of Business Research, 123, 86–96. Cram, A., Hberg, J. G., Gosper, M., & Dick, G. (2011). Situated, embodied and social problem-solving in virtual worlds. Research in Learning Technology, 19(3), 259–271. Herz, M., & Brunk, K. H. (2017). Conceptual advances in consumers’ semantic and episodic brand memories: A mixed methods exploration. Psychology & Marketing, 34, 70–91. Holbrook, M., & Hirschman, E. (1982). The experiential aspects of consumption: Consumer fantasies, feelings, and fun. Journal of Consumer Research, 9(2), 132–140. Johnson, E., & Adamo-Villani, N. (2010). A study of the effects of immersion on short-term spatial memory. World Academy of Science, Engineering and Technology, 71, 582–587. Kang, J. (2018). Effect of interaction based on augmented context in immersive virtual reality environment. Wireless Personal Communications, 98, 1931–1940. Kostyk, A., Dessart, L., & Cowan, K. (2022). Consumer Memories of VR Brand Experiences. Global Branding Conference, Sheffield, UK (May 4–6). Ofir, C., Raghubir, P., Brosh, G., Monroe, K. B., & Heiman, A. (2008). Memory-based store price judgments: The role of knowledge and shopping experience. Journal of Retailing 84(4), 414–423. Optale, G., Urgesi, C., Busato, V., Marin, S., Piron, L., Priftis, K., Gamberini, L., Capodieci, S., & Bordin, A. (2010). Controlling memory impairment in elderly adults using virtual reality memory training: A randomized controlled pilot study. Neurorehabilitation and Neural Repair, 24(4), 348–357. Paivio, A., & Csapo, K. (1971). Short-term sequential memory for pictures and words. Psychonomic Science, 24(2), 50–51. Park, C. W., Mothersbaugh, D. L., & Feick, L. (1994). Consumer knowledge assessment. Journal of Consumer Research, 21, 71–82. Peña, J., Hancock, J. T., & Merola, N. A. (2009). The priming effects of avatars in virtual settings. Communication Research, 36(6), 838–856. Pleyers, G., & Poncin, I. (2020). Non-immersive virtual reality technologies in real estate: How customer experience drives attitudes toward properties and the service provider. Journal of Retailing and Consumer Services, 57, 102175. Puccinelli, N. M., Goodstein, R. C., Grewal, D., Price, R., Raghubir, P., & Stewart, D. (2009). Customer experience management in retailing: Understanding the buying process. Journal of Retailing, 85(1), 15–30. Slamecka, N. J., & Graf, P. (1978). The generation effect: Delineation of a phenomenon. Journal of Experimental Psychology: Human Learning and Memory, 4(6), 592–604. Slevitch, L., Chandrasekera, T., & Sealy, M. D. (2022). Comparison of virtual reality visualizations with traditional visualizations in hotel settings. Journal of Hospitality & Tourism Research, 46(1), 212–237. Teisl, M. F., Noblet, C. L., Corey, R. R., & Giudice, N. A. (2018). Seeing clearly in a virtual reality: Tourist reactions to an offshore wind project. Energy Policy, 122, 601–611. Tussyadiah, I. P., Wang, D., Jung, T. H., & tom Dieck, M. C. (2018). Virtual reality, presence, and attitude change: Empirical evidence from tourism. Tourism Management (1982), 66, 140–154. White Baker, E., Hubona, G. S., & Srite, M. (2019). Does “Being There” Matter? The impact of web-based and virtual world’s shopping experiences on consumer purchase Attitudes. Information & Management, 56(7), 103153.

Chapter 9 Storytelling in VR: Reality Versus Fantasy Given that VR offers unique technological capabilities that can deeply immerse users into various experiences, the opportunities for compelling storytelling in VR are ripe. In this chapter, we will discuss ways in which marketers can both engage in brand storytelling and involve customers in the stories themselves. Different VR technologies offer ways of employing storytelling depending on whether the goal of the manager is to create a realistic or a fantastical experience. For example, simulations offer a realistic way to interact with products or prototypes in a virtual environment (i.e., a goal of realism), whereas virtual worlds can immerse users within fantasies and social communities that may include branded elements. We discuss these and other opportunities for strategically using VR technology for compelling brand storytelling.

What Is Brand Storytelling? Brand storytelling involves crafting a narrative or story about your brand. Rather than focusing on what makes your brand superior to those of your competitors – usually by highlighting higher quality, lower prices, status, or some other common mechanism of differentiation – brand storytelling focuses on the brand itself. Where did your brand come from? How was your brand born? Why does the brand exist currently, and what does the brand aim to do (besides generate profitability or achieve some other functional goal)? What challenges has your brand faced, and what challenges is it currently facing? What common experiences or values link your brand to your customers? Consider the story of Gap, Inc. The company began in 1969 as “the Gap,” named by founder Don Fisher in honor of the generation gap of the time. Fisher’s idea for the new retailer came when he had difficulty finding a pair of jeans that would fit properly (and then could not return). Thus, Fisher and his wife, Doris, first sold Levi’s jeans and records in the store to appeal to younger consumers of the time, and a few years later, they began selling their own namesake-branded jeans – the first retailer in history to synonymize the store name with the brand name. Gap’s history offers a unique angle that many other brands cannot share: the brand was born because the founder experienced an issue with improperly fitting jeans that he could not return. When we think about it, how many of us have ever dealt with the frustrations of clothing that does not fit correctly, or products that a retailer will not let us return for one reason or another? In this way, Gap is not framed as just another retailer of jeans or other apparel and accessories – it has a history, a story, and a relatable origin. Each brand story is designed to connect with customers in a way that more conventional or basic brand information cannot. That is, brand stories offer greater https://doi.org/10.1515/9783110980561-010

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potential for generating empathic feelings toward your brand, especially when you link your brand’s story to your customers’ stories through common values or similar experiences. Creating emotional connections is easier when customers can more easily identify with the brands. Given that brand stories enhance empathy and increase the “human” elements of a brand, those stories help to establish such connections. However, those stories can take different forms, which we discuss in section “VR Stories and the Reality/Fantasy Typology.”

VR Stories and the Reality/Fantasy Typology Cowan and Ketron (2019) proposed a typology of VR experiences in which those experiences can be categorized as primarily reality or fantasy. VR experiences based on reality seek to replicate real-world experiences as they would or could actually occur. In these cases, VR offers the opportunity for users to transport themselves into a “reality” that, while not “real” in the most technical sense, emulates objects, locations, movements, and so forth as they are in real life. Shopping in virtual stores, learning how to build something, and even just touring a museum or walking down a busy city promenade are possible realistic experiences via VR. Meanwhile, VR experiences based on fantasy seek to offer an escape from reality. Sometimes, these experiences might include “realistic” objects but may be set within a fantastical world. For example, a VR game may be set in Victorian London or medieval Japan, which one obviously cannot currently visit in real life. However, these environments might be designed to appear more or less realistic for their day. In other cases, these experiences may be purely fantastical – they focus on magical or abstract virtual worlds that enable users to experience something entirely different from real life, such as taking up swords or bows and arrows to battle enemies in an ancient forest or an adventure into an entirely animated world in which the user interacts with others via an avatar. In this way, VR gives users the opportunity to experience a world unlike their own and unlike one that they could experience in real life. Both types of experiences can be beneficial to brands depending on their goals for their respective VR experiences as well as for their brand strategies as a whole. We discuss each type of VR experience in greater detail in section “Reality in VR.”

Reality in VR As mentioned above, the appeal of realistic VR experiences is their ability to create (or re-create) environments that are like those in real life. As such, VR enables transportation into an inaccessible, though realistic, environment. Users in Texas, for example, can “walk” through a museum in Scotland in VR. Previously, those users would have had to either travel to Scotland in person – an expensive and potentially prohibitive endeavor

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for financial, physical, or other reasons, not to mention the difficulties presented during COVID-19 regarding travel restrictions and health/safety concerns – or learn to live with pictures, videos, and other “flat” media online. While the latter could be interesting, pictures and videos are not nearly as immersive as VR, which results in an experience that might be lackluster for those going through it. Realistic VR experiences reduce information asymmetry – that is, they make it easier for customers to know what they are buying and how a product will fit on them or into their lives. This is especially important for digital shopping experiences, where customers may be unable to interact with a product prior to purchasing it. VR can also be used to create virtual stores in which customers can shop, go through a particular service experience, or otherwise interact with realistic objects or people inside the virtual environment. This topic will be further discussed in the chapter on vcommerce (see Chapter 10). Importantly, VR can cast users into an environment that even if travel were technically possible would be extremely difficult for the average person to access, whether due to physical limitations or financial constraints. For example, the vast majority of people would not be able to climb Mt. Everest, traverse the icy landscapes of Antarctica, or dive to the depths of the Marianas Trench. However, these are just a few examples on our own planet. VR can transport users to the atmosphere of Venus or to a spacelevel view of Neptune, where they could learn more about those planets and astronomical phenomena. Beyond educational potential, realistic VR can allow your customers and consumers in general to interact with your brand in ways that might not be possible for most users. High fashion brands, for example, can offer users a virtual “seat” at a fashion show for an upcoming season’s collection. A sporting goods brand could offer users the ability to shoot baskets with a popular line of basketballs, kick a football or soccer ball through or into a goal, try out a set of golf clubs on a members-only course, or otherwise interact with virtual versions of products in a variety of ways. A culinary brand could place users into a virtual “kitchen” to use pots, pans, baking dishes, knives, and other implements of cooking to prepare a virtual “meal.” While this might not be a perfect facsimile of real product interactions – customers may not be able to know exactly what a basketball or golf club feels like, for example – these experiences do allow customers to do something that they cannot otherwise do. That is, they can see how the product looks and “feels” within the environment of use, which is something that can be difficult for brick-and-mortar retailers to enable otherwise. Considered separately, physically handling the product in a store and virtually experiencing the product “in use” present advantages and disadvantages. Thus, brands could create a two-pronged approach to integrating realistic VR: offer both elements to customers. That is, have customers interact with the product in the store, where they can get a sense of the product itself (i.e., gripping a golf club or tennis racquet, and then have customers engage in the VR experience to experience the product “in use” (i.e., swinging the club or racquet at the given ball appropriate for the sport).

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In all of this, VR offers the potential to create realistic brand stories that enable real or simulated integration of brand elements with customers’ lives. That is, realistic VR helps customers envision how a brand and its offerings would fit into their daily activities. VR also expands a brand’s subjective story (as customers perceive it) beyond the confines of physical spaces and the limited scope of more conventional online platforms. That is, a customer might find an outdoor recreation store like REI to offer great atmospherics, but the customer’s understanding of REI as a “character” in the customer’s life might be limited to the store location(s), online sites, and/or flat images or videos on social media. Adding VR experiences that might transport a customer to a whitewater rafting adventure or a climb of a boulder-abundant mountainside brings new dimensions of REI to life in the brand-customer relationship. Thus, for realistic VR, the customer can become a character in the real-life story of a brand. Whether the customer is simply a virtual user or an active participant in creating or co-creating something alongside the brand, the story is real and supplements the brand’s actual history or functioning.

Brand Storytelling via Realistic VR VR allows customers to interact with products or elements of a servicescape in a richer virtual environment. In these experiences, the customer has the chance to become a more immersed character in the brand’s story, perhaps even shaping the way the story unfolds from a first-person perspective. In these cases, realistic environments trigger the same emotions as they might in the real world. For instance, walking through the woods in VR conveys the same feelings of relaxation. What may be slightly unclear to this point is how realistic VR experiences could relate to brand storytelling. Most of these realistic experiences, after all, may not necessarily pique the imagination in obvious ways that contribute to brand storytelling. If all customers are doing in realistic VR experiences is interacting with a product or seeing what the product looks like on them or in their homes, then what value is this contributing to the brand’s story? The answer to this question would involve going back to the brand’s story itself. As a customer moves through the experience, what are the elements of the experience that the brand can highlight as connecting to core values? Might this be highlighting the product line and providing more detail to allow users to experience the more nuanced elements of the brand? Consider the excellent storytelling that Cartier is able to accomplish through their product lines, and how these contribute to the myth of the brand. Taking another example, retailer Tommy Hilfiger set up a VR runway in their stores so that consumers could experience the front row of their fashion show. Additionally, it is important to remember that just because a VR experience is realistic does not mean that it cannot connect emotionally to customers. This might be especially the case for cause-related marketing efforts, where brands might partner

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with organizations (or perhaps create their own nonprofit arms) to address certain social or environmental causes. While brands could use images, words, video, audio, and other means of conveying information about those causes, VR would allow the customer to be virtually transported to that growing mass of plastic in the ocean that threatens sea life, or that hospital in need of support, to see and interact with these environments firsthand. One 360-VR YouTube video from Toms Shoes showcases the brand’s humanitarian relief efforts, with brand ambassadors delivering shoes to children in impoverished regions. In fact, Toms installed VR headsets in hundreds of their stores so customers could experience the impact of the brand’s initiative in Peru. Brands might draw inspiration from that format – interactive holograms or avatars in a virtual environment – to create cause-related experiences. For example, a customer might have the opportunity to meet children whose school supplies were supported by customer donations via the given brand’s involvement in the cause. Customers might also be able to interact with virtual versions of animals who were rescued through the cause. These experiences could strengthen the customer’s emotional connections to both the cause and the brand, and by extension, the cause would become more clearly integrated into the brand’s story.

Fantasy in VR Unlike realistic experiences, which tend to be more utilitarian or functional in their purpose, fantastical experiences are designed to be more emotionally oriented – they entertain, pique the imagination, and allow customers to escape from reality for a few moments. Thus, brand storytelling possibilities for fantasy experiences are promising in that they can breathe a new dimension of life into a brand that would otherwise be impossible without VR. What is particularly fruitful here and worth repeating is that fantastical experiences allow both brands and customers the opportunity to create new experiences that otherwise might not be possible in real life. This means that customers can temporarily suspend belief or create possible alternative “realities.” In this vein, customers could go beyond just envisioning themselves crafting virtual brand stories in the present–after all, VR can be used to create experiences based on historical periods (e.g., a tour of Ancient Rome would be physically impossible, though the environment could be realistic for its time). Thus, brands could showcase their origins and pasts as they may have actually occurred. As such, customers are able to craft stories that are intertwined with those of brands. In this way, brand storytelling is not just about finding commonalities in values or experiences between customers and brands – customers can continue building that story. This means that customers can co-create brand stories. The next chapter on co-creation will speak more to the particulars of this process, but we touch on it briefly now.

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What might this look like? Consider the way in which fandoms create content that supplements and even enriches original creations. Many fiction franchises – Lord of the Rings, Star Trek, Star Wars, Harry Potter . . . the list is potentially endless – have rich, robust, and lively fandoms that have created untold volumes of content, including extensions of storylines and characters. While this fanfiction may or may not reflect the original creator’s intent and may not even be agreed upon across all fans, these communities are not unlike brand communities in that they are united around their love and passion for an element of popular culture. Importantly, these fandoms generate a lot of marketable value via merchandising, subscriptions, and organized events. Even virtual worlds entirely built on fantasy in the virtual space (e.g., League of Legends) are capable of generating these kinds of marketing opportunities. Most brands may never reach the kind of passion that tends to represent the typical fandom, but marketers should not be quick to dismiss the possibility of content that brand communities might create. VR could extend a brand beyond the here and now and the limitations of reality.

Brand Storytelling via Fantasy VR Perhaps the most common platform for more immersive fantasy experiences in VR is the virtual world. In virtual worlds or metaverses, users take the point of view of an avatar, or a virtual first-person character that interacts with other characters and/or objects in the virtual environment. Virtual worlds offer the potential for rich and robust environments – these worlds often have their own cultures, social systems, etc., that guide users’ behaviors and interactions. Users, therefore, are able to live out “alternative realities” that they would not otherwise be able to experience in real life. Importantly, virtual worlds can and do include real brands. Users can purchase digital clothing, shoes, accessories, furniture, artworks, and other nonfungible tokens (NFTs) with real money to embellish their avatar and surroundings. Even luxury brands have been entering these virtual worlds. In Decentraland’s (a metaverse’s) fashion week, Estée Lauder joined with Alex Box, a female metaverse artist, and created a unique NFT wearable inspired by Advanced Night Repair, Estée Lauder’s topselling serum. When joining the event, users were able to claim an NFT that made their avatar glow just like the product. As this example shows, these platforms are relatively simple for users to join yet offer so much potential to create buzz. If a brand has fewer resources or wishes to test out concepts without full investment into a highly immersive virtual world, branded games offer the ability for users to interact with the brand in VR at a level of lower immersion. Louis Vuitton, for instance, has fashion available to buy within League of Legions, a virtual gaming world. Figure 9 below summarizes the key features of realistic versus fantastical VR.

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Product-oriented Destination-oriented Value-oriented Storytelling

Opportunities for NFTs Excitement & Emotion Extending the Brand

→ → →

Description

Purely Realistic, Extension of Real World

Realistic, Extension of Real World, Difficult to Visit

Realisticallybased Imagined Space

Fantasy, with some Features of the Real World

Imagined Version of Space based on a Different Era

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Example

Working Memory Less Accessible Requires more Immersive Features to Develop Narrative More Opportunities for Revisiting

Anne Frank Museum

Antarctic Expedition

Second Life

Roller Coaster In London

Ancient Rome Tour

League of Legends

Figure 9: A Spectrum of Realism to Fantasy in VR.

Reality Versus Fantasy: Which Should You Choose? When considering the crafting of brand stories, and the divide between reality and fantasy, VR experiences should be designed with more realistic or more fantastical elements depending on your goals. Consider the following questions that you should ask yourself when building or conveying your story via realism versus fantasy: – Is your goal to reduce information asymmetry? Taking the guesswork or uncertainty out of your brand or offerings may not seem particularly fruitful on the surface as far as brand storytelling goes, but any good story should be clear. Of course, the entire mystery genre is built on keeping readers in the dark until the end, but even then, the hidden or missing information is revealed at some point. By utilizing VR to reduce information asymmetry between you and your customers, you are in essence telling a good, complete story with clear details – as with character development, brand development relies on those details for customers to gain a full understanding of the brand’s identity, history, and trajectory. In other words, you are filling out your brand story by showing the components of your brand to customers in clear and realistic ways, in essence boosting your authenticity with your customers. – Is your goal to create a more functional experience? If your brand’s story is built on functionality or driven by utilitarian value (see Chapter 7), then your VR experience would want to highlight those elements. As such, realistic experiences would align more closely with your storytelling aims. However, as brand storytelling relies on emotional connections, consider ways in which even the most realistic experience could include appeals to emotion. For example, fun music,

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happy avatars in the environment, gamification of elements (e.g., the ability to earn badges based on the achievement of certain tasks), and/or other means of creating a sense of pleasure or enjoyment in the environment can create positive emotional connections that, though perhaps superficial in the moment, can nevertheless build connections with your customers and would not otherwise be likely to occur outside of VR. In this way, even functional experiences have the potential to contribute to brand storytelling. – Is your goal to enhance emotional connections with your customers? If so, then VR offers much potential for you, especially in the realm of fantasy. Given that fantastical experiences tend to be designed to entertain (rather than inform), customers should naturally be more inclined to connect emotionally with your brand. This, then, offers much potential for your brand to create new content that goes beyond typical customer-brand interactions. For example, brands could create immersive VR games that feature characters, much like advertising campaigns feature spokespersons. In these games, customers could interact with and get to the know the characters, who may take the form of the typical or ideal target customer, an anthropomorphic object intended to represent the brand (i.e., a personification of the brand), or perhaps a fictional avatar of someone important to the brand. In this vein, customers might work with these characters to complete tasks, solve mysteries or puzzles, or solve problems – facilitated, of course, by the brand’s actual offerings or branded virtual implements. By working with those characters, the customer can develop an affinity for your brand in a way that would not have otherwise been possible. Beyond specific series or installments of a certain branded VR experience, brands might also participate in virtual worlds in which customers can purchase or use branded items in those worlds. In these experiences, such as Vans’ virtual skatepark for Roblox players and Hyundai’s Mobility Adventure (also linked to Roblox), users can customize branded apparel or test drive vehicles. In some of these experiences, such as the same Hyundai experience and BMW’s Joytopia, users can even participate in festivals and concerts. While these environments are certainly fantastical in several ways, the connections with the brands themselves are nonetheless real, and these virtual worlds add an entirely new dimension to brand stories – a dimension, we might add, that appeals to younger customers in ways that capture their attention and interest, opening the way for the capturing of new target markets among Generation Z. Of course, such an involved endeavor might be too lofty or cost prohibitive for the brand. Perhaps you would like to roll out a special fantasy experience in a pop-up installation or create a single VR experience in which customers could participate at home. While long-term game installations could continue to stoke the emotional connections that customers might form from an initial experience, you can still reap the benefits of enhanced emotional connections and increased brand storytelling potential with a single experience!

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– Is your goal to stimulate customers’ imaginations beyond the here and now? While VR experiences can lead to actual augmentation of the brand’s story in the present, they can also lead to more confident extrapolation of the brand’s story into the future. In this way, marketers can use VR to get customers to think beyond the confines of the brand as it is to them now and more about the brand as it could be. This thinking “outside the box” – that is, considering possibilities that may not currently exist or are beyond the current scope of the brand’s capabilities or offerings – is a key way to keep a brand’s story relevant in an ever-evolving marketplace. This is especially important as the digital world has transformed the way customers interact with brands as well as with each other, and as VR continues to grow in importance and technological possibilities, brands have the opportunity to utilize it to encourage customers to consider brands beyond their concrete, present forms. In this way, customers can be encouraged to think about the brand’s future as well as its past and present, which are often the focus of brand storytelling in more conventional formats. Importantly, thinking beyond the here and now does not necessarily mean thinking about something abstract or fantastical – the imagination can be piqued from realistic experiences just as well, depending on the immersivity of the platform, and customers could be encouraged to think about future possibilities for the brand from a more realistic frame of mind. However, getting customers to think “outside the box,” so to speak, about your brand may require at least some elements of fantasy. Namely, the imagination requires prior knowledge as well as new incoming information to create as-yet experienced “projections” of possible trajectories. Thus, making an experience realistic (i.e., in line with what customers might already know or expect) but incorporating unexpected or unique fantastical features – seeing the brand in a futuristic or otherwise abstract environment or interacting with an anthropomorphic yet nonhumanoid branded avatar, for example – could facilitate imagining brand futures in new and exciting ways. Expert Opinion 9 Andrew Murchie, Deep Vision Studios, Edinburgh, UK Many of the brands I have worked with have commissioned VR films to engage the audience with the brand’s heritage. For example, I worked with a whisky brand in a remote area of Scotland. It is a long drive from all major airports, down winding country roads, so it is tricky for people to physically visit. The location though plays a major part of the brand’s heritage and is a substantial part in the brand’s history of distilling in that same location for nearly 200 years, so visiting here really helps to immerse the guest in the brand and for some whisky afficionados seems almost like a pilgrimage. So, if we can’t easily get guests to the distillery how about we take the distillery, and surrounding area, to the guests via VR? The VR film we created went well beyond what visitors might expect at a typical whisky distillery tour by virtually visiting areas around the region, standing high up on the hills and peering out across the loch to the town before visiting the harbor then eventually arriving at the distillery itself. We discussed the regional history of local whisky making, pointing out the locations of many of the long-lost historic distilleries in the town, and then went into brand specific details taking guests into the

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distillery and vast cask storage facilities. The film was then shared with a wide range of audiences at a number of different events, including those abroad, for example, to the buyers in the Far Eastern market. Primarily this VR experience was used to engage business-to-business (B2B) buyers in the brand rather than end consumers, to get them “steeped in the taste” of the specific Scottish whisky, so to speak. We created another VR film in support of a wider sampling campaign for an Italian premium lager brand that used VR in a similar manner but for a more consumer-facing audience. This allowed consumers to enjoy a taste of the product while being immersed in the brand’s heritage via a virtual visit to the brewery. The brand has been brewing its beer at the same brewery in Northern Italy for over 200 years, ran by the same family. Using VR, we were able to effectively give consumers “a taste of the region,” immersing the viewer in some stunning locations from standing on a riverbank watching the sparking alpine waters that flow from the Alps down to the town or being squeezed into the breweries storage “caves” where the beer is matured. These types of virtual experience can be used to build up the brand essence and create what feels like “real” and deep connections with the brand for the audience.

Chapter 9 Checklist – – – –

VR offers both realistic and fantastical potential. Realistic experiences are helpful for simulated interactions with products or prototypes and brand storytelling with a more pragmatic or rational side. Fantastical experiences are helpful for virtual worlds and brand storytelling with a more imaginative or emotional side. Both realistic and fantastical components can be included in experiences to balance both rational and emotional benefits.

References Baños, R. M., Botella, C., Alcañiz, M., Liaño, V., Guerrero, B., & Rey, B. (2004). Immersion and emotion: Their impact on the sense of presence. Cyberpsychology and Behavior, 7(6), 734–741. Baños, R. M., Botella, C., Rubio, I., Quero, S., Garcia-Palacios, & Alcaniz, M. (2008). Presence and emotions in virtual environments: The influence of stereoscopy. Cyberpsychology and Behavior, 11(1), 1–8. Calogiuri, G., Litleskare, S., Fagerheim, K. A., Rydgren, T. L., Brambilla, E., & Thurston, M. (2018). Experiencing nature through immersive virtual environments: Environmental perceptions, physical engagement, and affective responses during a simulated nature walk. Frontiers in Psychology, 23(8). Chirico, A., Ferrise, F., Cordella, L., & Gaggioli, A. (2018). Designing awe in virtual reality: An experimental study. Frontiers in Psychology, 8. Cowan, K., & Ketron, S. (2019). Prioritizing marketing research in virtual reality: Development of an immersion/fantasy typology. European Journal of Marketing, 53(8), 1585–1611. Guegan, J., Nelson, J., & Lubart, T. (2017). The relationship between contextual cues in virtual environments and creative processes. Cyberpsychology, Behavior, and Social Networking, 20(3), 202–206. Innocenti, A. (2017). Virtual reality experiments in economics. Journal of Behavioral and Experimental Economics, 69, 71–77.

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Krasonikolakis, I., Vrechopoulos, A., Pouloudi, A., & Dimitriadis, S. (2018). Store layout effects on consumer behavior in 3D online stores. European Journal of Marketing, 52(5/6), 1223–1256. Molesworth, M. (2006). Real brands in imaginary worlds: Investigating players’ experiences of brand placement in digital games. Journal of Consumer Behaviour, 5(4), 355–366. Oculus. (2022). National Geographic Explore VR. Last accessed July 11, 2022, from https://www.oculus. com/experiences/quest/2046607608728563/ Poeschl, S., & Doering, N. (2013). The German VR simulation realism scale – psychometric construction for virtual reality applications with virtual humans. Student Health Technology Information, 191, 33–37. Safian-Demers, E. (2021). Are interactive branded virtual worlds the future of advertising and ecommerce? Last accessed July 11, 2022, from https://www.wundermanthompson.com/insight/branded-virtualworlds Schultze, U., & Rennecker, J. (2007). Reframing online games: Synthetic worlds as media for organizational communication. In K. Crowston, S. Sieber, & E. Wynne (eds.). Virtuality and Virtualization (pp. 335–351). Boston: Springer. Spears, N., & Yazdanparast, A. (2014). Revealing obstacles to the consumer imagination. Journal of Consumer Psychology, 24(3), 363–372. Valtchanov, D., Barton, K. R., & Ellard, C. (2010). Restorative effects of virtual nature settings. Cyberpsychology, Behavior, and Social Networking, 13(5), 503–512.

Chapter 10 Selling Your Products in VR: V-Commerce VR can be helpful in moving a customer along their decision-making stage from attitude formation to purchase decision. However, unlike the attitude formation stage, the purchase decision stage reflects high motivation to examine information and think through interactions with brands. More specifically, at the purchase decision stage, customers look for information to help them make choices. Therefore, providing information on products, allowing customers to try products virtually, or allowing consumers to co-create offerings through virtual viewings in-store would have a powerful impact on a brand’s marketing strategy. We talk through some of these options in this chapter, exploring how VR can influence consumers when it comes to purchases.

V-Commerce VR is not just about fun and games or even exciting brand experiences for the sake of excitement. It also has the potential for direct conversions through an activity called v-commerce, or the use of virtual environments to create spaces in which users can shop, evaluate products and information, and make decisions and purchases. In essence, v-commerce takes a physical store environment and transforms it into a virtual one. In fact, VR offers a lot of potential as a customer-facing retail channel! V-commerce can be realized on stand-alone brand-owned platforms, such as brand websites or brand VR headset apps. For example, Chinese retailer Alibaba operates a VR based shopping platform called Buy+. Customers can enter the retail space and even buy physical products using the Alipay payment platform. Alternatively, vcommerce can be integrated within virtual worlds and the NFT metaverse. For instance, virtual art houses hosted entirely in VR (e.g., Spatial: spatial.io) sell NFT “digital masterpieces” to modern art connoisseurs. In order to understand the benefits of vcommerce approaches, though, we must first understand how shopping in VR differs from shopping in other environments.

How Does VR Shopping Differ from Other Retail Environments? Most models of consumer decision-making start with need recognition – the moment a customer encounters a problem with their current state or an opportunity to improve their current state. For instance, a consumer might recognize that they need a replacement for one of their currently owned items. From there, the customer searches for information (either internally, from memory, or externally, from various marketer-controlled and nonmarketer-controlled sources). Next comes the evaluation of alternatives among https://doi.org/10.1515/9783110980561-011

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an array of products that could potentially address the need. Finally, the customer decides which product might be best suited for the job. After the purchase, the customer experiences a number of post-purchase processes, including satisfaction, loyalty behaviors (i.e., returning to the store and/or purchasing the product/brand again at a later date), and WOM behaviors (i.e., telling friends and family or commenting on review sites or social media). Retail environments serve an important purpose during evaluation and purchase stages of this process. Customers visit these environments to browse and compare available options and ultimately to buy the selected product. In traditional retail shops (i.e., brick-and-mortar stores), many factors might influence consumers as they browse a shop. Modern retail is often conceived as a “theater stage,” where retail atmospherics are used to consciously design the space to provide the best shopping experience. Some of the factors that influence shoppers lie within marketers’ control. For example, lighting, background music, color schemes, store layout, point-of-purchase advertising, temperature and scents have all proven influential in how consumers shop. Social interactions such as the ones with the sales staff are also important and can affect your customers’ decisions. However, many factors are often outside the brand’s control, yet those factors might negatively impact shopping experience and lead to patrons leaving without a purchase. Specifically, crowding of the store, interactions with other customers, the architectural style of the building and the overall surrounding area, other stores in close proximity, congestion and traffic on the way to the store, and parking availability can all influence consumers negatively. Digital retail environments, of course, reduce some of the frustrations associated with shopping at physical stores. Customers need not brave bad weather and traffic, nor do they need to be concerned with paying for gas to get back and forth during the trip. They do not need to deal with the wait times in the shop or tolerate store messiness during busy periods. Similar to traditional brick-and-mortar retail, marketers talk about the atmospherics of digital environments, such as web-atmospherics of a website or m-atmospherics of a mobile app. In these environments, navigation components and perceived organization influence consumer decisions. Visual cues are also important, and the effects of shopping aisles’ color schemes are replaced with the effects of the website colors. Likewise, customers evaluate the digital environment’s informativeness and entertainment value. Online shopping from a 2D computer, tablet, or smartphone interface often results in a flat and lackluster experience. With v-commerce, online shopping is transformed into something much more immersive and exciting. V-commerce offers the potential for your brand to transform digital shopping experiences for your customers. In a VR store, products can be represented with great amounts of detail, and if suitable for the brand, elements of fantasy can be introduced into the retail environment to create a rich, engaging experience (i.e., Chapter 9). However, VR stores also remove physical components of shopping that can be important to evaluating product options. For example, while touch can be simulated through vibrations in VR, customers still cannot

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directly experience the textures or comfortability of products and must rely on indirect cues (e.g., visual details) to make those assessments. These limitations might be more important for some products than others and are explored in the next section.

V-Commerce Applications: Product Fit Consider the Swarovski example we have used in previous chapters. Imagine that a shopper enters a luxury mansion and leisurely walks through its rooms. On a stylish table next to a fireplace, she finds an exclusive Swarovski crystal. She picks it up, and a pop-up window appears providing her with more information about the product as well as an option to add it to her shopping cart. This joint v-commerce venture between Swarovski and Mastercard provides an excellent example of shopping in VR. At the time of this v-commerce initiative’s launch, a brand spokesperson pointed out that v-commerce might be particularly suitable for delicate and fragile products (e.g., Swarovski pieces), where unnecessary wear and tear should be avoided. It is true that product characteristics impact v-commerce suitability and use. You will notice that the v-commerce example described above focused on enjoyable, hedonic aspects of shopping. A relaxed atmosphere of a luxury mansion will suit some brands, while others will seem out of place. Multisensory environments, such as the ones that VR can create, are much better suited for hedonic products (i.e., entertaining, expressive, or recreational) and hedonically-oriented shoppers, who browse without a specific goal in mind. For example, fashion apparel shoppers often like to explore the products in showrooms and derive enjoyment from this process. This exploration behavior persists in retail environments even if they are virtual. On the other hand, if someone shops with a quick and rather utilitarian (functional) goal in mind, they might not wish to engage with the entertaining whimsy of virtual shopping environments. Peukert and coauthors (2019) found that while hedonic value was enhanced via the sense of presence in a VR environment, utilitarian value was lower due to hampered product diagnosticity. In other words, users had difficulty using information in the virtual environment to evaluate products. The authors suggested that this was due to the limitations of virtual space, which could be remedied via technological advancement. Thus, utilitarian value, while potentially difficult to realize in primitive VR applications, may carry comparable potential to hedonic value for marketers who are able to invest in the necessary technological advancements. Put simply, if your customers want to effectively evaluate products in the VR environment as if they were real, you need to consider how these evaluations will be enabled. Interestingly, Alzayat and Lee (2021) found that virtual stores may be more effective for evaluating products that are considered extensions of the body (e.g., tools) rather than presentations of the body (e.g., apparel/accessories). This effect was driven by the individuals’ sense of presence in the virtual environment. Arguably, the

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lack of an avatar accurately representing the VR user might impact whether the shopper enjoys exploring products that are meant to be “worn” rather than “used.” As with physical stores, elements of the shopping environment other than the products themselves are important in VR. As marketers are in control of the vcommerce environment, they can develop, adjust, and modify its design to match their shoppers’ preferences.

V-Commerce Applications: Shopping Environment Overall, customers shopping in virtual environments expect products in those virtual environments to be realistic and vivid. However, as some authors point out, customer expectations may be too lofty for current VR capabilities. This, then, opens an opportunity for marketers: those who are able to invest in creating lifelike VR experiences when it comes to v-commerce may gain a unique competitive advantage. Unsurprisingly, customers have stronger intentions to shop in virtual spaces when the experience is more enjoyable and playful. Virtual stores also lead to a higher sense of presence, which contributes positively to consumer trust, perceived value, attitudes, patronage intentions, and WOM intentions. Thus, more successful virtual store environments are likely to be those that are more capable of producing flow, which is facilitated via presence (see Chapter 2). Richer v-commerce environments lead to higher customer engagement (see Chapter 7), which fuels satisfaction and purchase intentions toward products presented in the virtual space. The empirical results provide evidence that consumers in highly immersive VR environments (vs. less immersive environments) choose a larger variety of products and are less price-sensitive. Elements of the VR environment such as the background music, lighting, and social interactions are all important for the overall experience. For example, one experimental study of a VR-based duty-free store showed that users preferred lighter-colored floors when v-shopping. Given the importance of “feeling in control” for consumers’ willingness to use VR, it might be wise to empower your shoppers to customize and control certain features of the environment. For example, a customer might be prompted to select a background music track or change the color of the virtual showroom walls. Further, consider whether a social interaction feature would be beneficial to build into your shopping environment. While social features in VR are somewhat controversial as they are believed to break the “spell” of immersion, there are potential benefits. For example, customers might be seeking advice from a store assistant. This can be either a real salesperson represented via an avatar, or an AI-powered bot-assistant. Communication with both could be enabled via a voice- or text-based chat, and customers can be prompted to book a live session with the store associate. Similarly, customers can have an optional function of social interaction with other shoppers. One can see this as

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beneficial if those in the target audience prefer social shopping experiences with their family and friends or would rather shop alone (and there’s nothing wrong with that!). Lastly, social interaction is particularly important for lateral exchange markets – social platforms that enable a so-called networked economy, where sales and exchange are possible in a consumer-to-consumer fashion (think AirBnB or eBay). Exchange platforms for these interactions can be set within VR, where peer-to-peer transaction is facilitated in a virtual world. As trust is a key issue on these types of platforms, realism and authenticity offered by VR can make it a particularly suitable technology for consumerto-consumer exchanges.

How Do Customers Respond to V-Commerce? Research on the effects of v-commerce is scant but emerging, and the implications for marketers appear quite promising. Studies suggest that there are a lot of similarities between shopping behaviors in a VR store and a physical store (e.g., shoppers buy more from higher vs. lower shelves). There are, however, important differences that should be noted. For example, one study found that v-commerce appeared to carry higher potential for purchase intentions than did physical stores. The authors explain these effects through a dual path: one in which the emotional experience of VR influences sense of presence, thereby affecting purchase intentions, and the other in which emotional appraisal of the virtual environment’s features influences brand recall, which subsequently increases purchase intentions. Interestingly, in this study, VR headsets, though less comfortable than other kinds of VR devices, offered the greatest overall benefits for customers’ emotions and purchase intentions (even compared to physical stores!). This finding runs counter to what marketers might expect: while conventionally discomfort is something to be avoided in the customer experience, discomfort in the VR realm does not necessarily negatively affect the desirable downstream responses marketers want from customers. On the contrary – those responses appear to be higher in spite of the discomfort due to the unfamiliar technology. However, it is important to recognize that customers might differ on individual characteristics that can affect their interest and willingness to use v-commerce. For example, your target consumers might have a different need for touch when shopping. Alzayat and Lee (2021) discuss that users higher in instrumental need for touch (i.e., the need to touch products in order to evaluate their quality or suitability for the customer’s needs) report lower hedonic shopping value in VR environments. Thus, it is helpful to customize shoppers’ experience by first inquiring whether touching products is important for them when they browse in the retail environments. For those target audiences who place a lot of value in touch, marketers could seek ways in which touch-related elements might be better simulated (more detailed verbal descriptions, well-designed visual demonstrations, etc.).

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How Should You Implement V-Commerce? – What features should you build into your brand’s VR store? It might seem that v-commerce requires highly complex technical solutions, not the least of them being integration with the payment systems and e-commerce platforms. However, research indicates that even virtual stores that are not so technologically advanced that they would allow shoppers to make purchases directly in the VR environment can benefit: simply having customers walk in an immersive environment can be an effective tool that increases their purchase intentions. Customers might then be prompted to follow up on those intentions by visiting the brand’s e-commerce platform outside of the VR store. Your VR store should take various usage barriers into account, including accessibility of the v-commerce environment. Intuitive and easy-to-use navigation creates an important sense of control over the experience among users. However, some studies point out that making the entire v-commerce experience too easy may not be desirable. Instead, giving an appropriate level of challenge and letting users overcome it may lead to greater feelings of playfulness and usefulness. –

How can you align your virtual store layout with your brand objectives and capabilities? Just as with physical store layouts, virtual store layouts can lead to differences in customer perceptions. For example, Krasonikolakis and coauthors (2018) found that more graphically complex layouts lead to more entertaining and enjoyable shopping experiences. These include an “avant garde” layout with many visual and display elements, a boutique layout with smaller products and spaces but greater mimicry of physical store details, and a department layout that resembles brickand-mortar department stores. Meanwhile, layouts with simpler system requirements tend to make shopping easier. A “pragmatic” layout may only have walls and include images of products instead of 3D models. While this kind of layout sacrifices visual detail, the system requirements are also lower, which helps to avoid lags and network-related disruptions to the v-commerce experience. Further, a warehouse layout with long rows of digital shelving makes it easier for customers to compare products as they shop. Now, consider those kinds of layouts alongside your own offerings, aims, and capabilities. For some brands, the choice of layout aligns quite clearly with their goals or brand identity. A home improvement store, for example, would probably want to utilize a pragmatic or warehouse layout, which would allow the likely utilitarianfocused customer to easily navigate the available options. Similarly, grocery shoppers might be more inclined to shop from a warehouse layout as such a layout makes comparison shopping easier. Meanwhile, retailers of more hedonic products – apparel, home décor, sporting goods, and so forth – would likely find greater success with one of the more complex layouts, which could vary depending on the breadth and depth

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of the assortment (i.e., a boutique layout would make more sense for a smaller assortment, whereas a department layout would allow for a larger assortment). However, these ideal layouts are tempered by limitations on capabilities. While having a richly-detailed virtual store might be appealing, one of the worst things a brand could do is to create a visually rich yet buggy, disruptive virtual store. No matter how immersive or impressive the space is, disrupting the virtual experience for the customer would disrupt immersion and flow, which would have negative consequences for the customer’s perceptions of and responses to the experience! – How can you attract customers to your VR store? When shopping in VR, consumers perceive various risks – for example, concerns around safety of their e-transactions, getting the best price, and product quality. For this reason, shoppers might approach VR shopping cautiously. Marketers can implement a range of techniques to ease shoppers’ concerns and entice them to try out v-commerce. Advantages of shopping in VR can be highlighted. For instance, customers can be offered an efficient product search tool that enables them to locate an item much faster than in a physical store. The purchasing process could be streamlined as much as possible. There can be built-in product recommendations and comparisons delivered, for example, via a virtual shop assistant. Loyal customers can be offered gifts and discounts when shopping in VR. Some of those might come in the form of digital items (e.g., avatar accessories). Lastly, offering more than a physical store can deliver in terms of the layout and design as well as the experiential value can convince customers that virtual shopping surpasses shopping in a physical store. Meanwhile, concerns around things such as e-transaction safety can be ameliorated with assurances of data security. Brands may also highlight that v-commerce shopping is safer overall – exposure to illnesses, for example, is not a relevant concern in v-commerce, nor would potential threats to physical safety. –

How much information are your customers likely to need when evaluating available product options? Prior research suggests that virtual environments cannot always deliver all information that customers seek in relation to the product, such as how a clothing item will look like on a customer and what the fabric will be like to touch. Therefore, virtual shopping experiences might be more appealing to customers who already possess sufficient product knowledge or will be making decisions based on visual or hedonic factors. That way, your customers’ value perceptions of the experience will not be negated by the limitations of the virtual environment and their own lack of prior knowledge/experience with the product.

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Expert Opinion 10 Marissa Carpenter, VP, Softlines Division, Army & Air Force Exchange Service As a merchant leader working for a major US department store in the pre-COVID era, “going to market” has been a relatively unchanged process. Retail buyers would travel mostly to New York City, Los Angeles, and Las Vegas to meet with vendors, view the newest line, select products and negotiate. Depending on the business, some buyers would travel as frequently as once a month to once a quarter. Budgeting for airfare, hotel and other travel accommodations is part of the business for both the vendor and the retailer. Traveling for market has been an industry norm for decades. When the pandemic lockdown from COVID-19 began in March 2020, retailers and vendors were faced with a challenge. Vendors had already used 2D Computer-Aided Design (CAD) paper line sheets to illustrate the line for buyers; however, seeing the product in person was always the preferred method. The June 2020 market was the first time in my career that a line was presented to me through VR. A well-known children’s apparel brand had already invested in the technology and decided the June market that year was going to be the first time their sales team used the technology to show their Spring 2021 line. A virtual showroom was rendered with wall and table displays for all color choices of each garment. The buyer could virtually “walk” through the room to quickly see a full view of the color and silhouette stories. Each 3D item could be “zoomed” in to see close-up swatches of the fabric weave and texture. Style numbers and color names were given to each item for easy navigation. Items could be virtually selected to view on a VR model to evaluate the fit and silhouette. The vendor had even mocked up the virtual samples to be presented on virtual store fixtures so that the buyers could envision what the product would look like on the sales floor of one of our stores. While I did miss the “touch and feel” of a line review in person, the efficiency of a VR line review was tremendous. As a leader of multiple buying teams, this new way for buyers to view and select a line was incredibly valuable. I was now able to include junior members of the teams, such as assistant buyers, to give them exposure to the market experience. The vendor shared how VR not only brought monetary travel savings but also a cost and waste savings from no longer needing to produce multiple sample lines for the various retailers. Different retailers could view the “same” virtual room simultaneously. What once took a full week for a vendor to present a line in person to all their retail accounts could now be completed in 1 or 2 days. My team and I still travel for market, but the frequency and duration of travel has been reduced by at least 60 percent. We all appreciate the cost savings it brings to our company as well as the time back to stay in town and be with our families!

Chapter 10 Checklist – – –

V-commerce enables customers to make purchases within VR experiences. Virtual shopping can be as engaging and enjoyable as (if not more than) shopping in physical stores. Virtual store layouts can take several forms, some better suited than others to certain kinds of products and shopping behaviors (i.e., simpler environments and layouts for utilitarian situations and richer, more complex layouts for hedonic situations).

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The utilitarian aspects of virtual shopping (e.g., reading product information in the virtual store environment) seem to lag behind hedonic aspects, but improvements in VR technology may help alleviate this issue.

References Alzayat, A., & Lee, S. H. M. (2021). Virtual products as an extension of my body: Exploring hedonic and utilitarian shopping value in a virtual reality retail environment. Journal of Business Research, 130, 348–363. Baker, E. W., Hubona, G. S., & Srite, M. (2019). Does “being there” matter? The impact of web-based and virtual world’s shopping experiences on consumer purchase attitudes. Information & Management, 56 (7), 103153. Domina, T., Lee, S., & MacGillivray, M. (2012 ). Understanding factors affecting consumer intention to shop in a virtual world. Journal of Retailing and Consumer Services, 19(6), 613–620. Han, S., An, M., Han, J. J., & Lee, J. (2020). Telepresence, time distortion, and consumer traits of virtual reality shopping. Journal of Business Research, 118, 311–320. Hsieh, J. K., Hsieh, Y. C., Chiu, H. C., & Yang, Y. R. (2014). Customer response to web site atmospherics: Task-relevant cues, situational involvement and PAD. Journal of Interactive Marketing, 28(3), 225–236. Krasonikolakis, I., Vrechopoulos, A., Pouloudi, A., & Dimitriadis, S. (2018). Store layout effects on consumer behavior in 3D online stores. European Journal of Marketing, 52(5/6), 1223–1256. Kwon, R., Kim, K., Kim, K., Hong, Y., & Kim, B. (2015). Evaluating servicescape designs using a VR-based laboratory experiment: A case of a duty-free shop. Journal of Retailing and Consumer Services, 26, 32–40. Loureiro, S. M. C., Guerreiro, J., Eloy, S., Langaro, D., & Panchapakesan, P. (2019). Understanding the use of Virtual Reality in Marketing: A text mining-based review. Journal of Business Research, 100, 514–530. Martínez-Navarro, J., Bigné, E., Guixeres, J., Alcañis, M., & Torrecilla, C. (2019). The influence of virtual reality in e-commerce. Journal of Business Research, 100, 475–482. Meißner, M., Pfeiffer, J., Peukert, C., Dietrich, H., & Pfeiffer, T. (2020 ). How virtual reality affects consumer choice. Journal of Business Research, 117, 219–231. Mishra, A., Shukla, A., Rana, N. P., & Dwivedi, Y. K. (2021). From “touch” to a “multisensory” experience: The impact of technology interface and product type on consumer responses. Psychology & Marketing, 38(3), 385–396. Papagiannidis, S., Pantano, E., See-To, E. W. K., & Bourlakis, M. (2013). Modelling the determinants of a simulated experience in a virtual retail store and users’ product purchasing intentions. Journal of Marketing Management, 29(13–14), 1462–1492. Park, H., & Kim, S. (2021). Do augmented and virtual reality technologies increase consumers’ purchase intentions? The role of cognitive elaboration and shopping goals. Forthcoming in Clothing and Textiles Research Journal. Park, M., Im, H., & Kim, D. Y. (2018). Feasibility and user experience of virtual reality fashion stores. Fashion and Textiles, 5(32), 1–17. Perren, R., & Kozinets, R. V. (2018). Lateral exchange markets: How social platforms operate in a networked economy. Journal of Marketing, 82(1), 20–36. Peukert, C., Pfeiffer, J., Meibner, M., Pfeiffer, T., & Weinhardt, C. (2019). Shopping in virtual reality stores: The influence of immersion on system adoption. Journal of Management Information Systems, 36(3), 755–788. Pizzi, G., Vannucci, V., & Aiello, G. (2020). Branding in the time of virtual reality: Are virtual store brand perceptions real? Journal of Business Research, 119, 502–510.

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Pleyers, G., & Poncin, I. (2020). Non-immersive virtual reality technologies in real estate: How customer experience drives attitudes toward properties and the service provider. Journal of Retailing and Consumer Services, 57, 102175. Schnack, A., Wright, M. J., & Holdershaw, J. L. (2020). An exploratory investigation of shopper behaviour in an immersive virtual reality store. Journal of Consumer Behaviour, 19(2), 182–195. Turley, L. W., & Milliman, R. E. (2000). Atmospheric effects on shopping behavior: A review of the experimental evidence. Journal of Business Research, 49(2), 193–211. Xue, L., Parker, C. J., & Hart, C. (2020). How to design fashion retail’s virtual reality platforms. International Journal of Retail & Distribution Management, 48(10), 1057–1076.

Chapter 11 Co-Creation in VR Co-creation offers a unique way for customers to shape their experience with firms, involving meaning and even products. This chapter will first introduce the concept of co-creation including its history. Then, the chapter will outline four different ways that firms can approach VR co-creation. First, we consider cocreation from the customer point of view. Second, we cover the social aspects of co-creation in that some VR environments are less individualistic and naturally provide for consumer-to-consumer interactions. Third, we review the aspects firms might consider when they develop VR branded content to allow for cocreation. Finally, the chapter discusses how marketers can co-create products and services with customers and how to motivate participation.

Co-Creation in Marketing Marketers have the ability to engage customers as participants in VR. This is called cocreation and this occurs when customers participate in the VR experience and even customize the products that they purchase in VR. Co-creation has become increasingly important in marketing in traditional channels, yet its relevance for VR channels has only recently been highlighted. To understand co-creation at its core, we must first understand service-dominant logic.

Service-Dominant Logic and Co-Creation Co-creation comes from the ideas of creating more value for consumers in the process of exchange. In breaking free from the idea that marketers sell “goods,” servicedominant logic was born. This does not mean that all marketers are service providers. Rather, we can say that the goods that marketers sell ultimately provide a service to consumers. For example, it is not a computer that we need, but it is the service that the computer is able to accomplish: connection to the web and others, file storage, the ability to perform our jobs more efficiently, and entertainment, among other uses. The computer is the vessel from which the value is obtained. The old focus on selling goods, inherited from the field of economics, focused on tangible resources (e.g., computers), the marketer-created value in the product, and the importance of the transaction. On the other hand, the trend toward servicedominant logic shifts focus to that of intangible offerings (e.g., what the computer can do) and the value that is co-created among marketers and consumers and their relationships with each other. https://doi.org/10.1515/9783110980561-012

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According to service-dominant logic, humans provide resources for co-creation. While goods-dominant logic views customers as something to capture, act on, segment, and distribute to, service-dominant logic sees customers as partners, co-creating the service and providing value to both parties. Customers are collaborated with, learned from, and provide information on their individual, ever-changing needs. So, rather than marketers embedding value in the good created, consumers define and co-create the value. In fact, one of the fundamental beliefs of service dominant logic is that the customer is always a co-producer. Technological advancements have partially been responsible for the increasing emphasis on service-dominant-logic and value co-creation. Consider the internet, which not only allows individuals greater access to knowledge and others but also provides a means for brands and consumers to interact. Previously, the customer could only interact with the brand when in-store, on a call with a brand representative, or when receiving advertising or catalogs from the brand. But the technological advancements did not stop there, and many more means for consumer-brand interaction emerged: social media, apps on mobile devices, augmented reality, and – most importantly for this book! – VR. So how does co-creation and service-dominant logic apply to VR? Well, VR allows opportunities for customers to participate in many ways. Virtual environments are interactive and fun, and they enable opportunities for socialization. Thus, they can motivate customers to participate in co-production. VR can lead to co-creation of brand meaning, co-creation of experiences through marketer-created environments, and co-creation of products.

Co-Creation in VR Perhaps one of the easiest ways that consumers co-create value in VR is through cocreation of brand meaning. Think of this as a natural extension from social media channels. By simply searching YouTube for 360-VR videos, one can notice that many of these videos emanate not from the brand but from actual consumers. For example, if you want to find a 360-VR video of the Cat Town Café in Oakland, California, you will find that this video was not created by Cat Town Café but by an individual consumer who went to the café. Likewise, if you want to visit the Louvre or British Museum, you mind find 360 VR tours filmed and posted by other visitors. In this way, consumers are sharing their own points of view, telling others what they should attend to on a visit, and conveying meaning of the brands. VR experiences can also involve other users. So, multiple consumers can interact with the brand within VR. Social virtual worlds or metaverses can offer environments perfect for interacting with others. This is, after all, the promise of the metaverse. It is important to consider the meaning of the brand – how multiple customers can shape the meaning, share positive or negative brand messages, or reinforce the brand

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message. Individuals with high brand involvement may be more likely to interact with others and the brand. As this is a case of high product involvement, as detailed in Chapter 6, these types of interactions would demand high mental resources but would heighten presence and flow experiences in VR. A relevant consideration for this type of co-creation is co-presence or social presence, where individuals might feel more (or less) engagement with others that could heighten (or dilute) the experience with the brand. Brand communities, highlighted as high involvement groups of individuals, include situations where consumers have the opportunity to deeply connect to others. Identifying with these virtual groups can foster a community with intense emotion and passion. Traditionally, brand communities have operated through the Internet. However, given the technology capabilities of VR, the integration of such communities into VR could foster an even more intense sense of “togetherness.” VR, in decreasing distance perceptions, can remove some of the physical and perceived barriers among group members. Consequently, interactions within these virtual brand communities offer a promising opportunity for co-creation experiences. While in traditional brand communities, firms take on the role of facilitator, this is not the case for VR brand communities. Instead, consumers can control and facilitate the exchange and co-creation of both meaning and products. These platforms can enable C2C environments of v-commerce where users sell or resell customized products (see Chapter 10). The motivation for co-creation in these VR brand communities emerges from the recognition and esteem from peers, such that they want others to perceive them as innovative and creative. Some brands, retailers, and firms choose to create their own VR content where consumers might interact and help construct the process. This can be accomplished with a 360-VR app designed for a mobile device, a game experience in VR, or website simulation where the consumer can virtually walk and interact with objects. Take the example of the Big Cat Rescue VR experience, where a VR developer and Carole Baskins developed a game for a VR headset. In this experience, users are tasked with helping a tiger, who is in danger of poachers. In addition to learning more about the endangered big cats, users walk away a hero as they free the tiger from its capture. Imagine the ways in which the individual can co-create values. Users are the ones in charge of their movements, the extent to which they pay attention to certain features in the environment, and the choices they make. When firms create content for consumers, consumers construct meaning from it that may or may not coincide with the firm’s intentions. VR content not only influences expectations about a brand, but it also influences the way consumers interpret the brand when in-person. More importantly, this extends beyond the visit itself and will impact consumer memories of the brand. For instance, when in VR, firms can allow individual consumers the choice of flying like a bird, walking, or teleporting to different parts of a tourist destination. This small act of “co-creating the experience” will impact the way that consumers think and feel about the destination. Co-creation

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experiences are more positive when the consumer engagement with the brand is conducted within VR with higher application quality. Drawing from the chapter on immersion (see Chapter 2), the system itself, such as its quality and ability to reproduce a world seamlessly, influences the way consumers feel after co-creation. When consumers interact with brands or firms in VR, they could play an important role in innovating new services and products (i.e., take part in new product development). This can include generating new ideas, providing feedback on new concepts, helping to create new product concepts and prototypes, or trying out new prototypes within VR. The most prominent VR system for engaging in product co-creation takes place in virtual social worlds and metaverses. There, firms can interact with consumers in real time, consumers have high control over their environment, and the display is vivid and immersive. In fact, these environments are so rich that consumers believe that they are there in the space and that this space is real (spatial presence). Because customers have more control in these environments, they have more freedom and creative potential. In a similar vein, and as highlighted in Chapter 9, there is potential for the fantastical nature of the experience to work positively for co-creation opportunities. The more out of the world the virtual world seems, the more individuals could feel unrestrained to imagine new possibilities. In other words, the more fantastical the VR environment seems on the realism-fantasy continuum, the more the firm should steer the co-creation activities to idea generation rather than merely evaluation and trial. As scholars point out, when the virtual and real worlds blur, the individuals might be more creative and possess more potential to develop highly innovative products. At the same time, when highly immersed, individuals’ norms can be challenged in co-creation encounters. This is not new to firms. In fact, Second Life is replete with examples of firms attempting to connect with consumers. Aloft hotels created a virtual prototype for a physical hotel and invited evaluations of the hotel. Toyota launched a co-creation initiative whereby users in Second Life helped to customize their Scion line. Finally, a light brand asked users to dream up new ideas for lighting. Unfortunately, many of the co-creation initiatives have suffered from very little participation. As many users desire to participate in virtual worlds for their own reasons rather than to be marketed to and engage in market research, they have very little interest in co-creation.

Co-Creation from Customer-Brand Interactions: How Can Brands Foster Co-Creation Activities in VR? –

Why are consumers engaged in creating brand meaning? How does this relate to VR? Consumers are engaged in creating brand meaning in VR because they have control over the virtual environment and the activities in which they engage. Specific to VR, co-creation activities activate immersion, presence, and possibly states of flow for

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these individuals. In fact, creating VR content is a sufficient challenge and requires a set of skills to conduct. In effect, these are prime conditions for inducing states of flow. Moreover, they impact emotional engagement, other consumers’ attitudes and intentions toward the brands they speak of. At the same time, consumers see these activities as opportunities to obtain status online. Akin to influencers who obtain power from their number of followers, these content creators derive a sense of meaning from producing content and sharing it on social media. –

If your aim is to develop deeper engagement with consumers within the VR environments, how can this be accomplished? First, the user might be able to create their own avatars within this environment. In doing so, the customer is actively inserting their identity into the experience and connecting to the brand. Simply allowing avatar customization, as highlighted in Chapter 2, increases the connection to the experience. Consumers might be subsequently more likely to return to the experience, and exhibit greater presence, immersion, and flow. In turn, this leads to better attitudes toward the brand, higher purchase intentions, more positive WOM, and other benefits to the brand. Second, there are opportunities for users to take “souvenirs” away from the VR experience, such as photos or videos (e.g., through HMD casting), and then share these with others. As an example, in the National Geographic expeditions on the Quest discussed in Chapter 2, users are “handed” a camera and encouraged to take pictures throughout their journey. These images can be shared with others on social media and beyond. Some brands might even offer goods for sale to represent the experience, typical of what a museum does via a gift shop. In this way, consumers are co-creating the meaning of the brand even though the brand created the VR experience itself. They are choosing how to represent the brand to others through what they share, what they buy, and how they communicate these details. –

How can firms be successful in introducing such initiatives and fostering cocreation? Research shows that when VR co-creation opportunities benefit the customer, they are more likely to engage in them. This includes mental benefits, social benefits, individualistic benefits, and even benefits like entertainment. Likewise, these benefits affect the longevity of customer participation in co-creation. Some researchers even propose four aims firms need to address in designing virtual co-creation systems. First, they need to relate to customers’ pragmatic needs. That is, the systems need to be convenient, easy to use, and helpful in realizing customers’ own goals. Individuals need to feel the ability to interact in the environment, and the environment needs to be of interest to them. In virtual worlds that are gaming platforms, providing points for experience skills learned also helps users achieve their personal goals. In goalbased systems like these, marketers tap into customers’ drives to play and even compete. Second, firms should take into account sociability, where users would be able to

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interact with others. This relates to the notion of social presence. Recall that virtual social worlds motivate user participation by real-time interactions and collaborations with others. Users create relationships among avatars and build a sense of community. The cooperation with social partners drives motivations to co-create for a brand. As a third dimension, firms should be concerned with usability. In this case, customers should find the quality of the interaction with the information system high. More technologically advanced systems offer higher quality such freedom of movement, larger field of view, and so forth (see Chapter 1 for more details). Finally, the cocreation system should be designed so that it is hedonic, related to mental stimulation and fun. Participants experience heightened motivation to participate in virtual worlds because they offer entertainment and do not feel like work. By considering these four needs, marketers might stimulate higher participation in co-creation activities within VR. Expert Opinion 11 Christoph Kastenholz – CEO and Co-Founder, Valentin Markmann – Director and Functional Lead, Maximilian von Rennenberg – Manager, Kezia Rice – Executive, Pulse Advertising, Hamburg Germany Customers love being able to shape products and feel they can take an active role in all varieties of branding decisions. Not only do customers feel in control and enjoy the experience, but they also feel a deeper connection to these brands that they engage in co-creation activities. Over time, these connections can develop more deeply. As an example, users can design and customize clothing, such as shoes, shirts, or accessories, virtually. In designing and customizing options, customers can express themselves, engage their creativity, and design something that suits their own needs. Moreover, the entire process empowers customers to have control over a product, and this sense of control is important for a customer’s engagement in and motivation for participating in co-creation activities. Customization is the highest form of identification that a customer can achieve with a brand. By customizing an offering, it requires that a customer impart some of their identity into the object. This means that the customer identity will be embedded in the object. Consequently, the virtual environment offers a new way of allowing customers to fully engage with co-creation processes. Brand communities also offer a great opportunity to connect with consumers. When a user enters a virtual brand community in the metaverse, they are more than simply their avatar – they are an active participant in that world despite being in the comfort of their own home. This impacts users’ experience: they can make an active contribution to the metaverse, exchange with other users on a more personal level and feel a deeper part of the community. One of the most engaging parts of the metaverse is designing your avatar – every user can shape their own image and decide who they want to be. The other people you interact with in the metaverse have also designed their own image, offering a much more lifelike experience of interacting with others than a traditional brand community, where you may interact via social media comments. Overall, users have so much more control over shaping their own experience when they are part of a brand community in the metaverse – which is a huge pull for customers.

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Customers are partners in the customer-business relationship, and so provide value through co-creation activities. VR offers several opportunities for co-creation activities, including co-creation of brand meaning, co-creation of the brand experience, and co-creating products. Customers can co-create brand meaning by creating their own VR experiences and sharing them online or by joining brand communities in virtual worlds or on metaverses. Customers co-create new meaning about the brand when participating in VR experiences. While opportunities for co-creating products in VR are prolific, encouraging customer participation is challenging.

References Au, W. J. (2006). The Mixed Success of Mixed Reality. http://nwn.blogs.com/nwn/2006/10/why_mixed_ reali.html Cowan, K., & Ketron, S. (2019a). A dual model of product involvement for effective virtual reality: The roles of imagination, co-creation, telepresence, and interactivity. Journal of Business Research, 100, 483–492. Eisenbeiss, M., Blechschmidt, B., Backhaus, K., & Freund, P. A. (2012). The (real) world is not enough: Motivational drivers and user behavior in virtual worlds. Journal of Interactive Marketing, 26(1), 4–20. Huang, Y. C., Backman, K. F., Backman, S. J., & Chang, L. L. (2016). Exploring the implications of virtual reality technology in tourism marketing: An integrated research framework. International Journal of Tourism Research, 18, 116–128. Bonsu, K., & Darmody, A. (2008). Co-creating Second Life: Market–consumer cooperation in contemporary economy. Journal of Macromarketing, 28(4), 255–368. Chen, Y-W. (2020). Sustainable value co-creation in the virtual community: How diversified co-creation experience affects co-creation intention. International Journal of Environmental Research and Public Health, 17(22), 8497. Harwood, T., & Garry, T. (2010). ‘It’s Mine!’ – Participation and ownership within virtual co-creation environments. Journal of Marketing Management, 26(3–4), 290–301. Hemp, P. (2006). Avatar-based marketing. Harvard Business Review, 84, 48–57. Huang, Y. C., Backman, S. J., & Backman, K. F. (2011). Exploring the impacts of involvement and flow experiences in Second Life on people’s travel intentions. Journal of Hospitality and Tourism Technology, 3(1), 4–23. Jung, T. H., & tom Dieck, M. C. (2017). Augmented reality, virtual reality and 3D printing for the co-creation of value for the visitor experience at cultural heritage places. Journal of Place Management and Development, 10(2), 140–151. Kim, M., Lee, C. K., & Jung, T. ORCID logoORCID: https://orcid.org/0000-0002-8594-6641. (2019). Exploring consumer behavior in virtual reality tourism using an extended stimulus-organism-response model. Journal of Travel Research, 59(1), 69–89. Kohler, T., Fueller, J., Matzler, K., Stieger, D., & Füller, J. (2011). Co-creation in virtual worlds: The design of the user experience. MIS Quarterly, 35(3), 773–788.

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Kohler, T., Matzler, K., & Fuller, J. (2009). Avatar-based innovation: Using virtual worlds for real-world innovation. Technovation, 29(6–7), 395–407. Lusch, R. F., & Vargo, S. L. 2006. Service dominant logic: Reactions, reflections, and refinements. Marketing Theory, 6(3), 281–288. Nambisan, S., & Nambisan, P. (2008). How to profit from a better ‘virtual customer environment.’ MIT Sloan Management Review, 49(3), 53–61. Ondreijka, C. (2007). Collapsing geography (second life, innovation, and the future of national power). Innovations: Technology, Governance, Globalization, 2(3), 27–75. Papagiannidis, S., Pantano, E., See-To, E. W. K., & Bourlakis, M. (2013). Modelling the determinants of a simulated experience in a virtual retail store and users’ product purchasing intentions. Journal of Marketing Management, 29(13–14), 1462–1492. Prahalad, C. K., & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing, 18(3), 5–14. Ranjbarfard, M., & Heidari Sureshjani, M. (2018). Offering a framework for value co-creation in virtual academic learning environments. Interactive Technology and Smart Education, 15(1), 2–27. Rose, F. (2007). How Madison Avenue is wasting millions on a deserted second life. Wired Magazine, 5(8). Vallaster, C., & von Wallpach, S. (2013). An online discursive inquiry into the social dynamics of multistakeholder brand meaning co-creation. Journal of Business Research, 66, 1505–1515. Vargo, S.L. and Lusch, R.F. 2004. The four service marketing myths: Remnants of a goods-based manufacturing model. Journal of Service Research, 6(4), 324–335. Vrechopoulos, A., Apostolou, K., & Koutsiouris, V. (2009). Virtual reality retailing on the web: Emerging consumer behavioural patterns. The International Review of Retail, Distribution and Consumer Research, 19(5), 469–482. Wang, Y., & Chen, H. (2019). The influence of dialogic engagement and prominence on visual product placement in virtual reality videos. Journal of Business Research, 100, 493–502. Wang, H-Y., & Sun, J. C-Y. (2021). Real-time virtual reality co-creation: Collective intelligence and consciousness for student engagement and focused attention within online communities. Interactive Learning Environments, https://doi-org.ezproxy.is.ed.ac.uk/10.1080/10494820.2021.1928711 Zine, P. U., Kalkarni, M. S., Chawla, R., & Ray, A. K. (2014). A framework for value co-creation through customization and personalization in the context of machine tool PSS. Product Services Systems and Value Creation, 16, 32–37.

Chapter 12 VR-Based Events VR experiences in marketing are viewed as a value-adding element that enhances the customer journey along virtual-physical touchpoints. One unique way to incorporate both virtual and physical is a VR-based event. In this chapter, we investigate possible ideas for VR events that are suitable for different marketing objectives. Limited scope, small events can involve more intimate VR presentations at sales pitches and product demonstrations. These VR experiences allow potential customers a ‘front row seat’ to connect with the brand and allow marketers to observe customers’ initial reactions and behaviors. Large scale events can include VR pop-ups and flash mobs as well as exhibitions and specialized conventions (e.g., comic cons). They generate social buzz, publicity, and help to enrich brand experience for existing customers while introducing the brand to new prospective clients.

Imagine a buzzing atrium of a comic con, with thousands of sci-fi fans exploring what that segment of the entertainment industry has to offer. One area in particular stands out: surrounded by imaginative decorations, live actors dressed in costumes invite guests to take part in a fully immersive experience. Fans are provided with VR headsets that feature an elaborate sci-fi world. Beyond VR, their real environment matches the fantasy with theatrical lights and sound and live actors’ performances. This is a description of a real event that took place at TechCrunch Disrupt and the NY Comic Con to promote the new sci-fi drama on HBO called Westworld. The creative team at Campfire Agency collaborated with HBO to design an event bound to generate buzz in advance of the series’ launch and to build the audience for the upcoming premier. The event was strategically targeted at potential future fans (i.e., comic con attendees). While the event was certainly immersive, engaging, and exciting, it also shared something in common with other kinds of successful marketing tactics. That is, successful VR marketing events are based on clearly defined marketing objectives and target audiences. Overall, there are different marketing event types that can be enhanced with VR. First, consider small scale, personalized settings such as, for instance, a sales pitch or an investor presentation. This is particularly suitable for B2B settings and enables potential buyers to fully appreciate what is being offered. Whether it is a beverage brand showcasing its heritage to a wholesale buyer or an architect firm showcasing bespoke solutions for a new hospital building to its administrators, VR can strengthen the pitch, improve overall attitudes, and anchor expectations. On a larger scale, VR functionality allows marketers to ‘test drive’ new ideas for early feedback, both in B2B and business-to-consumer settings. For example, French retailer E.Leclerc created a concept for a new store called Jouet, focusing on toys for all age groups. The brand collaborated with VR developers at V-Cult to create a detailed version of the store. Potential franchisees could experience Jouet during the https://doi.org/10.1515/9783110980561-013

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annual industry convention at Porte de Versailles Expo in Paris. The brand aimed for the VR experience to encourage the audience to open their own Jouet store. In addition to business buyers, regular consumers could be similarly introduced to a product through VR demonstrations. Such events can happen on-site (e.g., at the flagship store location) or as a part of industry expo or local market. For example, wine brands can organize in-store tastings for small groups of consumers, aided by VR functionality. Similarly, they can set up a booth at a larger event such as Food & Drink Expo UK and use VR to “transport” consumers to their vineyards and production facilities. Such use of VR technology is particularly attractive as it enables rich brand storytelling and positioning, which positively affect consumer attitudes, purchase intentions, and ultimately purchase behaviors. It is unsurprising that many brands are embracing such use of VR. Consider, for example, the 360-experience developed by the Champagne region to showcase its heritage and product. Even briefly experiencing a well-designed VR can heighten consumer affect as a direct result of the feeling that they are “really there.” In tourism, stronger liking and preference for a travel destination was detected by using VR headsets at a travel expo. Even if those who partake in VR do not become brand customers, they can still serve an important purpose: studies show that VR users are inclined to spread a positive word of mouth when they find the brand VR to be enjoyable. Centering your event around VR offers benefits beyond those provided by other multimedia solutions (e.g., standard videos presented on screen). For example, in one study, users “visited” a hotel either in VR or using traditional visuals. VR users felt less insecure, less irritated/annoyed, and less stressed throughout the experience. The study showed that VR can be a powerful tool for making participants feel more positively about staying in the hotel as well as saying positive things about the brand to others, especially in comparison with traditional visuals that marketers often employ to demonstrate the product. Interestingly, VR does not need to be brand-focused in order to generate positive benefits in the context of a larger event. For instance, one team created a relaxing VR experience in a busy mall to avoid the negative effects of crowding. The experience featured slow music and greenery. Consumers’ attitude toward the mall, mall satisfaction, and loyalty intentions were higher for those who experienced VR compared to those who did not. A similar use can be envisioned at music festivals, comic cons, or other large events that can be overwhelming for participants.

How to Design an Impactful VR-Based Event? – What are the key objectives that you hope to achieve with the event? Decisions related to VR and non-VR features of your event should be driven by your objectives. Certain elements of VR environments can be helpful in achieving those objectives. For instance, the goal might be to convince participants to give the product a

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try. This is particularly helpful for those products that are difficult to evaluate prior to consumption, and understandably, potential customers may feel anxious and uncertain about making a purchase. As an example, in tourism and hospitality, VR can be used to improve destination image and reduce perceived choice risk through the means of immersive and authentic destination portrayal. One can envision a VRequipped booth at a Travel Expo, with the sales agent on hand for interested patrons. Further, studies show that when an experiential product (e.g., wine or perfume) is showcased in VR, viewers’ sensory experience is enhanced. This, in turn, not only positively impacts their intention to purchase the product but also increases their willingness to pay a higher price for it. It is easy to see the benefits for, say, winemakers who participate in the events such as Salon of the Independent Winemakers or a Wedding Expo. Notice that immediate conversions might not be the main goal of the VR-based event. Some studies show that even those customers who do not purchase the product following VR exposure might be instrumental in achieving marketing objectives. For instance, in one study, those who completed a VR-based campus tour and felt truly “present” on a virtual campus indicated high intentions to recommend the campus to others. This means that presenting a VR campus tour at an open house event or a university fair could help the brand by generating positive WOM among prospective students. – Who is the target audience for the event? When designing a VR-based event, it is important to keep your audience in mind. For example, are event attendees likely to arrive as groups or families? Should VR experience design take this into consideration? Yung and coauthors (2021) recommend that VR content meant to engage families be tailored for them from the start. For instance, the whole family might be equipped with a headset and allowed to interact with each other while on a virtual adventure exploring a new destination or product offering. Knowledge of the target audience can also drive the choices in relation to the specific hardware necessary for a VR-based event. Would your target consumers be willing to try on a VR headset? Would floor-supported displays or panoramic projections be more suitable for your audience? If HMDs are selected for the event, it is helpful to consider how they will be sanitized between users. One can opt for a fairly low-tech solution of using a nonabrasive, lens-safe disinfectant spray and biodegradable wipes. If the event runs regularly, you might want to invest in replaceable and washable pads and covers. Finally, on a more high-tech end of the spectrum, there are UV-C disinfection cabinets for VR headsets and devices. While pricier, they might be a worthy investment if the marketing program includes frequent VR-based events.

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– What key features should your VR event offer? If your brand has a VR experience that was created prior to organizing a marketing event, you must assess whether it is suitable for the event purposes or whether a new VR experience has to be developed. For the objective of building interest, satisfaction, and loyalty, an immersive and noninteractive VR might be perfectly suitable. Consider, for example, a VR developed by a brand of a single malt Scotch whisky to showcase its heritage and beautiful original location. This VR would be suitable across the brand’s social media (e.g., YouTube channel), website, or on-site in the distillery to enhance the customer experience. Beyond that, the experience could be used for various events, from a presentation to a hospitality buyer abroad to a whisky festival where it would help to authentically present the brand to potential customers. Authentic experiences in particular have stronger links to emotional, rather than cognitive, consumer responses. This means that for maximum positive effect when showcasing a product, pleasure, enjoyment, and fun must be emphasized. One way to achieve this would be through gamification. In other words, VR event participants can be invited to participate in a quick and simple VR game, with potential real-world prizes and discounts tied to the game scores. An increase in playfulness can boost overall consumer attitudes toward the brand, which can lead to higher purchase or repurchase intentions. Such gamification components are easy to imagine in a context of a festival or an expo as well as in an in-store pop-up scenario. Imagine, for example, placing your customers into a climate-controlled pop-up chamber with VR headsets so that you can demonstrate the thermal potential of a new coat while hiking over a tall mountain or strolling down a wintry lane. Conversely, an athletic outfit could be tested on a hot tennis court or golf course. While such an experience would be an investment, the experience would likely generate a great deal of attention and buzz. At the same time, creating a VR game might mean higher budgetary demands. If such a digital asset is developed for the purposes of an event, it is worth considering where else it can be used after the event is over. For instance, can the game be incorporated into the brand website? Can it be turned into a mobile app? – How can non-VR elements complement the VR event? When consumers are knowledgeable about the product category, their brain often “fills in” the blanks in the VR experience. For example, those knowledgeable about wine usually rate wine taste and aroma higher after VR, seemingly deriving this information from the virtual experience. However, your event setting can aid consumers in getting the full experience. For instance, smells can be incorporated as part of the event by using a simple electric diffuser that is affordably priced online. The diffuser would be placed at the event location where consumers experience VR, which would complement the VR experience and make the “transporting” qualities of VR even stronger.

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Similarly, tactile sensations or tastings can be added to a VR experience to make it more impactful. For instance, tasting the chocolate after witnessing its production process in VR can boost consumer attitudes and purchase intentions. Such tastings are often easy to incorporate in an event. Another way to add to the VR experience is to bring actors who can provide “story continuity” between the virtual and the real world. One heritage site in Edinburgh designed a clever event that capitalized on this notion. At a street pop-up, participants were invited to view a VR experience that told a story from the plague pandemic-era in medieval Scotland. When they removed VR headsets, they were faced with an actor dressed as a “plague doctor.” Their surprised and emotional reactions were filmed, and the pop-up provided an excellent social media content with a high potential for virality (after first obtaining participants’ consent, of course!). – Can your event be hosted entirely within VR? Up until this point, we have discussed marketing events in which VR is incorporated into a real-world setting, such as an expo. However, virtual environments provide a unique space where geographically dispersed participants can potentially meet and interact. Some gamified activities can be as pleasant in VR as they are in the real world and may not require real-world components to yield positive results. Consider, for example, the phenomenon of VR golf. The US National Golf Foundation estimates that there are 4 million virtual golf participants, and about half of them have never played golf the old-fashioned way – outside on a course! An event held entirely in VR does not have the same constraints as a real-world event (e.g., weather, cost, time required from the attendees to take part, accessibility issues). The event can also still feature social interactions, which might be beneficial and increase experience enjoyment. While in some ways, social interactions in virtual environments might break immersion, there are benefits to including those interactions in VR. In that vein, some researchers suggest that brands must choose whether to focus on creating a more immersive or a more social VR experience. Both have benefits, but given that they are at odds with each other, it would be unwise to invest in both. This decision must be driven by the insights about the target audience: would they prefer an interactive social experience or a private immersive one? The decision should go hand in hand with brand positioning and communications, as for some brands a social interaction element might be more suitable than for others. For example, compare an energy drink brand with a high-end jewelry brand and whether social interaction would comparably benefit both brands. While creating a custom-made event space in VR might seem pricey and predicated on consumers’ ownership of specialized equipment, in reality, there are convenient, “ready-straight-out-of-the-box” solutions. For example, Mozilla Hubs offers 3D virtual “rooms” that can be “visited” from a regular computer or smartphone. On entry, participants get to choose their avatar. The environment enables different forms of social interaction, from voice functionality to a text-based chat. The space can be decorated

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with various 2D and 3D visual “art” – in this way, promotional banners and brandrelated images can be displayed, or a 3D model of the brand product can be presented. One can also select a background music or brand-related audio to complement the experience. Expert Opinion 12 Tupac Martir – Founder and Creative Director, Satore Studio, Lisbon, Portugal I do believe that events can take place entirely in VR, but you need to have an engaging experience, and to do that well, you need to think outside the real world. For instance, I remember being invited to a concert in VR. When I entered the virtual space for the concert, I realized that they had made their laws of physics exactly the same as those of the real world. So, I was stuck behind a huge dinosaur, and I could not see the show because they had given me physical characteristics of a human. I thought, “Why do I have the physics of a human? Why can I not just fly around and decide where I want to see the show from?” From the moment the user puts that headset on, the user is not bound by anything. So, there should be no limitations like those of the real world. As a creator, you decide if you want to make the space five by five, two by two, one by one, and so on, and you allow the user to fly or not to fly (or any other action). It is your decision as a creator to make those things, and for that, you are only bound by your own creativity. It is not just about what you have in real life, like two legs that only allow you to walk around. You are in VR! You are supposed to be whatever you want to be! Thus, you get to decide what the “laws of physics” of the experience are meant to be, and you decide the rules of the game as you are creating the world. Do not let the physical limitations of the real world hamper your creativity with events!

Chapter 12 Checklist – – –

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Different types of events can be enhanced by VR, from small B2B events (e.g., investor presentation) to large business-to-consumer (B2C) demos (e.g., at an expo). Both VR and non-VR features have to be considered when planning the event. Different audiences might require a different approach; for example, if consumers are likely to attend the event as a group, group experiences (vs. individual ones) should be considered. Some events can be hosted entirely in VR, allowing marketers to bring geographically dispersed audiences together.

References Campfire NYC. (2022). HBO Westworld. https://campfirenyc.com/work/hbo-westworld-season-1 Choi, C., Yoo, S. W., Park, J., & Greenwell, T. C. (2020). Virtual reality and consumer behavior: Constraints, negotiation, negotiation-efficacy, and participation in virtual golf. Physical Culture and Sport. Studies and Research, 88(1), 1–10. Comte Champagne. (2019). https://360.champagne.fr/

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Hudson, S., Matson-Barkat, S., Pallamin, N., & Jegou, G. (2019). With or without you? Interaction and immersion in a virtual reality experience. Journal of Business Research, 100, 459–468. Kim, M. J., Lee, C. K., & Jung, T. (2020). Exploring consumer behavior in virtual reality tourism using an extended stimulus-organism-response model. Journal of Travel Research, 59(1), 69–89. Lee, J., Kim, J., & Choi, J. Y. (2019). The adoption of virtual reality devices: The technology acceptance model integrating enjoyment, social interaction, and strength of the social ties. Telematics and Informatics, 39, 37–48. Mozilla Hubs. (2022). https://hubs.mozilla.com/ Pleyers, G., & Poncin, I. (2020). Non-immersive virtual reality technologies in real estate: How customer experience drives attitudes toward properties and the service provider. Journal of Retailing and Consumer Services, 57, 102175. Shen, J., Wang, Y., Chen, C., Nelson, M. R., & Yao, M. Z. (2020). Using virtual reality to promote the university brand: When do telepresence and system immersion matter?. Journal of Marketing Communications, 26(4), 362–393. Slevitch, L., Chandrasekera, T., & Sealy, M. D. (2022). Comparison of virtual reality visualizations with traditional visualizations in hotel settings. Journal of Hospitality & Tourism Research, 46(1), 212–237. Van Kerrebroeck, H., Brengman, M., & Willems, K. (2017). Escaping the crowd: An experimental study on the impact of a Virtual Reality experience in a shopping mall. Computers in Human Behavior, 77, 437–450. Van Kerrebroeck, H., Brengman, M., & Willems, K. (2017). When brands come to life: Experimental research on the vividness effect of virtual reality in transformational marketing communications. Virtual Reality, 21(4), 177–191. V-Cult. (2022). https://www.v-cult.com/en/ Wen, H., & Leung, X. Y. (2021). Virtual wine tours and wine tasting: The influence of offline and online embodiment integration on wine purchase decisions. Tourism Management, 83, 104250. Yung, R., Khoo-Lattimore, C., Prayag, G., & Surovaya, E. (2021). Around the world in less than a day: Virtual reality, destination image and perceived destination choice risk in family tourism. Tourism Recreation Research, 46(1), 3–18.

Part IV: Incorporating VR Into Your Customer Journey

Chapter 13 Pre-VR: Reaching Customers In this chapter, we exemplify avenues for promoting VR experiences, including 360 digital advertising. Further, we discuss how to deliver appropriately tailored VR experiences to different consumers by utilizing marketing intelligence. We look at variations in modality richness and elicited telepresence as a way of “tailored standardization” of your brand’s VR experiences. Lastly, this chapter recommends techniques for crafting your brand’s VR experience instructions.

So, after careful planning, testing, and consideration of all the necessary factors for successful VR in the marketing domain, you have created a VR experience . . . you are surely excited for the possibilities! Seeing your customers flocking to the experience, seeing them talk about it both online and offline, seeing your sales and/or other indicators of performance going up . . . Yes, you might be excited, but let’s not be hasty! More to the point: how do you get your target audience interested in it, engaged, and excited? After all, if they are not into it or do not even engage in the experience in the first place, then none of those great outcomes will manifest! Not to worry, though! There are some approaches you can take to get your customers just as excited as you are about your VR.

Using “Samples” to Get Customers Excited: Captured Content and 360 Ads Giving your audience a “taster” or “teaser” of what their VR experience might look like can be realized via regular images and video (i.e., non-360) that adopt a firstperson perspective. In fact, many VR platforms allow for first-person capture of experiences as they would be seen within a headset, so capturing that content is as easy as recording someone’s experience. Such content could be posted to social media, used in advertisements, or otherwise promoted to your customers as you might disseminate other kinds of content. In this vein, you might consider working with an influencer – a gamer, perhaps, or someone in your target audience with a following – who can record their experience in VR and share with their followers. While such a partnership might require a bit more additional investment, marketers have been realizing the undeniable power of influencers to spread the word for years, and the same could be achieved for your VR experience. Beyond that, social media platforms can be used to present 360 environments, as we have discussed previously in this book. For example, Facebook enables 360 ads, a https://doi.org/10.1515/9783110980561-014

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technique that, according to the tech-giant, can increase page views on relevant posts. Uploading a 360 image on Facebook creates a more interactive experience for customers who can either tilt their smartphone to “look around” in the 360 environment or use keyboard/mouse controls to do this on a computer. The Facebook ads tutorial suggests that this approach gives your audience “a tour of your business” and might “entice them to visit.” The tutorial also suggests infusing this interactive experience with gamified components, by “hiding Easter eggs” in a 360 image such that a consumer would need to look around to find a promotional or discount code placed within the virtual environment. Attention-grabbing properties of 360 content get the target audience intrigued by the VR experience. Make sure that any promotions designed to generate interest in your VR contain a clear call to action (CTA). For example, the audience might be prompted to book tickets to an on-site VR event or to map their travel to the VR popup in their city. When CTA is inserted right inside the promotional content, customers are more likely to follow through on their intentions to directly engage in your VR experience. You might even consider including a little incentive to do so (i.e., a 10 percent discount for booking straight from the promotion). Lastly, when promoting your VR experience, make sure to represent it accurately. Obviously, it does no good to devise an elaborate communications campaign promising a super-engaging and immersive VR if your organization is only able (or willing) to invest in simpler VR solutions. In such cases, there would be a mismatch between your communications and the experience, which would then lead to a negative gap between customer expectations and reality. Remember: it is better for customers to be pleasantly surprised by your experience, not the other way around!

Instructions for VR Use If you anticipate that customers will be experiencing VR individually on their personal devices, it is critical that the instructions for such use are made as clear as possible. As VR headsets, mobile apps, and browser-based VR are still relatively new to many consumers, your goal is to put users at ease and help them navigate the experience. It is helpful to highlight that engaging with VR is simple, fun, and requires little effort on the viewer’s part. The instructions themselves are best written in an easy-to-read and easy-tounderstand manner. This means using clearly visible, sufficiently large fonts as well as simple vocabulary. Some words might be more linguistically complex than others, and it is best to avoid any specialized terms that could be unfamiliar for your audience. You should also be cognizant of users who may have low literacy skills, color vision deficiencies, low fluency in the given language, or other barriers to information processing. In these instances, use of universally recognizable icons and avoidance of

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color coding as a sole means of marking information and elements in the environment can help those users have a good experience. Be sure to include instructions on any customizable options (how to turn on the audio, how to switch between computer/headset modes, how to change font size, etc.). These instructions should be presented early in the experience and made very clear to users, but they should also not interfere with the experience once it gets going. For example, hiding these options behind a settings or options icon in a corner of the screen can ensure that those options are easily accessible without interfering with the visual plane. When a VR experience is available to customers “on-site” (e.g., in your brand’s flagship store), consider creating posters that feature a step-by-step guide for using VR headsets, or a scannable QR code for accessing VR from personal mobile devices. Figure 10 shows an example of such a poster designed for a tourism organization in Scotland. It is wise to pretest your instructions and the experience itself on a small group of target consumers who are not avid VR users. Soliciting their feedback on the clarity of instructions via a brief questionnaire or during a focus group can make a big difference in whether a VR marketing initiative is successful. From those feedback sessions, you can make adjustments to ensure that the experience is as seamless as possible!

Tailoring VR for Your Audiences While we have discussed your customers’ VR readiness in Chapter 5, that is just the first step in ensuring that you have the right VR experiences for your audience! As a known marketing cliche suggests, one size does not fit all. In this spirit, when introducing a VR touchpoint in your customer journey, you might want to consider how to tailor your VR to different customer groups. Previously, tailored VR was most commonly discussed in medical research, and not as much is known in marketing context. However, marketing applications can offer consumer insights important for determining optimal VR features (e.g., a tailored level of immersion). For example, your audience might contain some verbalizers (those who primarily absorb information through words/text) or visualizers (those who mainly absorb information through visual stimuli such as images). Interestingly, research suggests that increased telepresence leads to more positive results for verbalizers, but not visualizers. It appears that visualizers do not need additional imagination aid, and therefore can be targeted by VR experiences that are inducing telepresence to a lesser extent. Similarly, whether your VR experience needs to provide high or low modality richness might also depend on your target consumers. Modality richness refers to the array of visual, audio, verbal, and contextual information in the virtual environment. The more different information of different types is presented in VR, the higher the modality richness of your VR experience. Consumers’ level of involvement drives

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modality richness benefits in VR marketing. Those with low involvement are more sensitive to modality richness. For this group, high richness leads to higher purchasing intentions. Customers with high involvement, however, are not persuaded by mere modality richness. Rather, their strong prior involvement has much more pronounced effects on their product perceptions and purchasing intentions. –

Which practical solutions enable targeting different consumer groups with different VR experiences? If customers “visit” VR in a marketer-controlled environment, customization can be implemented fairly easily. For example, one can envision two VR headsets with different preloaded versions of an experience, one aimed at verbalizers and one aimed at visualizers. Customers can be invited to participate in a “fun quiz” with the aid of a tablet prior to embarking on “a VR adventure tailored” for them. Table 5 contains possible questionnaire items that can be used when assessing VR users’ verbalizer/visualizer disposition. If, on the other hand, your participants will access brand VR on their personally owned devices, there are practical digital solutions that enable delivery of a tailored experience. For instance, a website- or an app-integrated chatbot can identify a customer’s level of involvement. By simply asking “Is this product important to you?”/“Does this product matter to you?” and having consumers select one of the predetermined answer options (“not really” to “very much”), a bot can infer consumers’ involvement (from low Table 5: Questionnaire Items for Assessing Verbalizer/Visualizer Disposition. Please indicate the extent to which these statements apply to you . . . I generally prefer to use a diagram rather them a written set of instructions.

 – Always False to  – Always True

I like to “doodle” (i.e., draw pictures or patterns while thinking about something else or when I am bored).

 – Always False to  – Always True

I find it helps to think in terms of mental pictures when doing many things.

 – Always False to  – Always True

After I meet someone for the first time, I can usually remember what they look like, but not much about them.

 – Always False to  – Always True

I prefer activities that don’t require a lot of reading.

 – Always False to  – Always True

I can never seem to find the right word when I need it.

 – Always False to  – Always True

When I’m trying to learn something new, I’d rather watch a demonstration than read how to do it.

 – Always False to  – Always True

✶

Note: High average value corresponds to a visualizer disposition, and a low average score implies a verbalizer disposition.

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to high) and decide whether to share a link to a VR experience offering higher (or lower) modality richness. –

So far, we have discussed tailoring VR experiences for different customer groups. Is it possible to deliver an individually tailored VR experience? With simulated VR experiences in particular, it is possible to provide in-stream tailoring through gamification. You might be familiar with this approach through increasingly popular interactive movies and TV shows on Netflix. Those shows allow viewers to “choose their own adventure” by making a series of branched choices. For example, a viewer might be asked which staircase the movie protagonist should take or what they should say to another character. While setting up such a tailored experience might seem complex, in reality, a number of “decision branches” might lead to the same events, minimizing the amount of content that is necessary to produce. In video-gaming literature, this technique is named adaptive gamification. Much research in this area revolves around matching viewers’ characteristics, from age or personality traits, to choosing options and outcomes within the game. In a marketing context, the choices can be as simple as selecting a product the consumer is most interested in and a type of VR content. For example, imagine a VR experience developed by a tea brand. Consumers might be first prompted to select their preferred style of tea (green, black, or herbal). Next, they can be asked whether they would like to opt into an educational experience to learn how expert tea blenders decide on the new flavors and aromas or a fun experience that entails a thrilling flight above the tea growing region. Such simple customization allows matching consumer preferences for more impactful outcomes.

Expert Opinion 13 Natalie Cregan-Evans – Former Marketing Manager for Igloo Visions, Shropshire, United Kingdom, Now Marketing Program Manager at Virtalis It’s important to consider your audience when creating VR experiences. Although it’s becoming more common, not everyone has experienced VR and might be nervous about trying it out. Some people might get “VR sickness,” so you need to think about the content – how quickly does it move, is it disorienting, especially for newcomers to VR? Tailoring your VR experience to the type of customer you have is important. For instance, HMDs will not fit younger children and so designing a different type of VR experience, such as through our Igloos (CAVEs), will be more suitable for them. Also consider how many people you want to get through an experience, and this will be really critical for designing CAVE experiences. You should allow consumers to go through the experience on their time in order to have the desired impact. So, outside of designing the experience for a number of people, you should also consider the group size going through together as well.

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Figure 10: Poster with VR Instructions.

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Chapter 13 Checklist – – – –

It is possible to share a “taster” of your VR experience on social media platforms, which can get your target audience engaged and excited for VR. If you anticipate that customers will be experiencing VR individually on their personal devices, the instructions must be made as clear as possible. VR experiences can be tailored to the individual consumer or a subgroup among your target audience (e.g., verbalizers vs. visualizers). Customizable “decision branches” with commonalities among choices can be created to personalize the experience while not requiring extensive additional content.

References Araujo, T. (2018). Living up to the chatbot hype: The influence of anthropomorphic design cues and communicative agency framing on conversational agent and company perceptions. Computers in Human Behavior, 85, 183–189. Belanche, D., Flavián, C., & Pérez-Rueda, A. (2017). Understanding interactive online advertising: Congruence and product involvement in highly and lowly arousing, skippable video ads. Journal of Interactive Marketing, 37(1), 75–88. Böckle, M., Novak, J., & Bick, M. (2017). Towards adaptive gamification: A synthesis of current developments. In Proceedings of the 25th European Conference on Information Systems (ECIS), Guimarães, Portugal, June 5–10, 2017. https://aisel.aisnet.org/ecis2017_rp/11 Facebook (2022a). https://www.facebook.com/business/ads/ad-formats Facebook (2022b). https://www.facebook.com/business/a/creative-tips-for-360-photos Hilken, T., de Ruyter, K., Chylinski, M., Mahr, D., & Keeling, D. I. (2017). Augmenting the eye of the beholder: Exploring the strategic potential of augmented reality to enhance online service experiences. Journal of the Academy of Marketing Science, 45(6), 884–905. Jin, S. A. A. (2009). The roles of modality richness and involvement in shopping behavior in 3D virtual stores. Journal of Interactive Marketing, 23(3), 234–246. Klock, A. C. T., Gasparini, I., Pimenta, M. S., & Hamari, J. (2020). Tailored gamification: A review of literature. International Journal of Human-Computer Studies, 144, 102495. Kostyk, A., Leonhardt, J. M., & Niculescu, M. (2021). Processing fluency scale development for consumer research. International Journal of Market Research, 63(3), 353–367. Lecza, A. (2018) A Complete Guide to Facebook 360 Photos. https://learn.g2.com/facebook-360-photo Loureiro, S. M. C., Bilro, R. G., & de Aires Angelino, F. J. (2020). Virtual reality and gamification in marketing higher education: A review and research agenda. Spanish Journal of Marketing-ESIC. van Veelen, N., Boonekamp, R. C., Schoonderwoerd, T. A. J., van Emmerik, M. L., Nijdam, M. J., Bruinsma, B., . . . & Vermetten, E. (2021). Tailored immersion: Implementing personalized components into virtual reality for veterans with post-traumatic stress disorder. Frontiers Virtual Reality, 2: 740795. doi: 10.3389/frvir

Chapter 14 Post-VR: Managing the Relationship Of course, managers are not merely concerned with customers’ immediate responses to VR – instead, they hope VR will be a memorable and long-reaching experience for the users. Managerially, this means long-term customer responses (loyalty, repatronage, WOM, and so forth). In this chapter, we discuss the ways in which VR can be used as a viable mechanism for WOM as well as for CRM and sustainable competitive advantage. Getting customers to have a fun, enjoyable, and exciting experience in VR can lead them to talk about the experience with others in natural and influential ways, which can lead additional participants to the VR experience – and potentially more customers. Further, considering brand storytelling, these experiences also help to expand customers’ emotional connections with the brand as the positive feelings that VR generates are associated with the brand, thereby expanding the brand’s emotional space and strengthening the brand’s long-term position in the marketplace. Customers then not only want to talk about it with others but also want to keep coming back for more. This offers great potential for CRM – customers may wish to repeat the same experience or seek out other ways of interacting with the brand outside of VR, including purchasing products offered by the brand. This, then, improves customer lifetime value (CLV). We discuss ways in which managers can leverage the power of VR for long-term customer relationships and keep their customers coming back for more.

CRM Most marketers are familiar with the idea that long-term relationships with customers are important. After all, we do all the work to attract customers – advertising, appealing or even exciting servicescapes, and so forth – and hopefully, they buy from us. However, we do not just want them to come in and make a single purchase. We want them to keep coming back again and again! Building a loyal customer base over the long term leads to a stronger stream of repeat purchases without the acquisition costs associated with gaining new customers, which ultimately enhances brand’s performance. However, more conventional approaches to customer relationship management, while good in concept, often do not lead to the kind of sustainable competitive advantage that companies and organizations hope to foster. Consider your own involvements in these kinds of programs as a consumer. How many of us have innumerable “buy nine, get the next one free” stamp cards in our wallets and purses for sandwich and coffee shops? How many of us have been accosted in stores and at registers to apply for rewards programs or (gasp!) credit cards? How many of us unknowingly have earned “rewards” at a certain store just waiting for us to come back and shop, only to discover with some pleasant surprise that we are getting a few dollars, pounds, euros, etc., off our transaction?

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More broadly, how many of us have really understood the value of these kinds of programs or thought, “wow, this is something that no one else does!” While some of these efforts are argued to lead to more customer loyalty behaviors (e.g., having a branded credit card leads to higher average annual spending), other customers may be turned off interacting with brands in the future due to aggressive credit efforts (come on, we have all thought, “Ugh . . . I get so tired of them asking me to apply for their credit card”). Other customers might be enticed to apply for these cards, but this strategy can lead to problems such as increased debt burdens for lower-income customers, lower-than-anticipated loan repayment for retailers and brands, and reduced employee morale. Even aside from the negative feelings associated with aggressive sales tactics, many of these loyalty programs simply fall flat in terms of long-term customer engagement. Enter the possibilities of VR! Given all the unique and compelling ways in which VR can immerse and engage customers, as we have discussed in the chapters leading up to this one, VR offers marketers the potential to build a new kind of CRM, one in which the customer and the brand co-create in new ways to increase value or write a brand’s story into the future together. Further, if VR experiences are compelling enough, they could serve as an inherent draw for customers to come back to your brand. Rather than relying on debt-inducing credit cards or complex and potentially confusing reward systems to win repatronage, brands can provide consumers with more intrinsic motivation to return. This might be particularly true when VR experiences connect with customers on a deeper, empathetic, emotional, and value-laden level.

What Managing the Relationship Means Before we discuss how VR can turbocharge CRM efforts, we must first consider CRM and what managing customer relationships means. The overarching goal of CRM programs is to maximize customer lifetime value, or CLV–that is, the total worth of a customer to a given business or organization over the life of their relationship. As many marketers know, strategically, it is more profitable to maintain current customers than it is to pay to acquire new ones, and CLV offers a great indicator of just how profitable a customer is to the firm. Commonly, marketers consider a variety of post-transactional indicators of longterm customer-brand relationships. We discuss several of these in turn.

VR and WOM As stated elsewhere, VR is a unique and exciting space for customer experiences and interactions with brands. Given that VR has a special propensity for creating excitement,

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it is likely to generate a great deal of buzz. Examples of ways VR can be shared include traditional WOM, eWOM with social media comments, casting of live or recorded VR experiences, sharing pictures within VR platforms, sharing posts that include VR elements, and getting friends to buy VR equipment or visit locations where VR experiences take place. Marketers should, therefore, make it easy for their customers to spread the word. Integrating social media within VR experiences, for example, could facilitate sharing of content or feedback on the heels of the experience. Marketers could offer special promotions to customers who bring others to the VR experience, which can both increase usership in the experience and increase incentives for current users to engage in WOM. Certain features of VR can increase the likelihood of positive WOM. For instance, an increased sense of presence within VR was linked to stronger intentions to recommend the brand to others in a study that focused on University campus brands. Interestingly, some ordinarily controversial VR features can nevertheless facilitate customer WOM. For example, potential tourists might be dissuaded from future visits if they feel like the VR experience was of such high quality that it entirely replaced the real thing. Yet, this perceived authenticity and similarity between real and virtual is irrelevant to their willingness to recommend the experience to others. After all, if an experience is particularly good, we are likely to suggest it to our friends and colleagues! Lastly, evidence suggests that VR makes eWOM more powerful: specifically, in an experiment that considered effects of online reviews on hotel booking intentions, researchers found that the effect of the online reviews alone was weaker than the joint effect of VR and online reviews. In this way, VR has the potential to amplify positive eWOM.

VR and Repatronage in V-Commerce Chapter 10 took a deeper dive into v-commerce, so we do not wish to rehash that discussion here. However, one of the important components of v-commerce – as with retailing in general – is getting customers to come back to shop in the future. After all, why create a detailed and exciting virtual store for customers to only shop in it once? V-commerce can be more profitable and therefore boost CLV to a greater extent when customers keep shopping in virtual stores over longer periods of time. When customers have good experiences in v-commerce (as with any retail experience), they will be more likely to continue shopping there in the future. In addition to the typical attributes of any shopping experience that increase repatronage – ease of the shopping experience, appeal of the atmosphere, good service, product variety, and so forth – marketers have to be cognizant of potential detractors unique to VR. For example, if the virtual store is gorgeous but buggy or plagued by lags, the customer may have favored the store otherwise but would be significantly and negatively affected by the technical issues. Further, if a customer experiences cybersickness, that

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negative and potentially persistent feeling may cast a shadow over an otherwise great experience. Thus, providing a comfortable virtual environment that functions properly is just as important as the conventional retail attributes. Of course, unlike brick-and-mortar stores, in virtual stores, concerns about cleanliness or customer service may be more easily managed. Virtual sales agents, for example, do not pose as much potential concern around lack of friendliness and helpfulness, and depending on the dynamicity of the environment (see Chapter 7), the cleanliness of the store can be easily managed through software. Marketers can also perform floor resets or reorganization of merchandise displays much faster and with fewer resources than in brick-and-mortar environments, which can help increase the novelty and excitement factor of virtual shopping and keep customers coming back more frequently than they otherwise might. Post-purchase, VR might also be helpful in reassuring the customers of their choice. For example, customers often experience post-purchase dissonance (often called buyer’s remorse) in a variety of situations, which can lead to negative feelings toward a brand, an inclination to return purchases, and a potential resistance to purchasing from the brand in the future. These outcomes, of course, are not favorable for marketers, so it would be important to anticipate potential post-purchase dissonance in v-commerce, as well. However, research has found that virtual environments can help reduce post-purchase dissonance, especially among customers who have a higher need for control and a lower sense of uneasiness around communication in the digital realm. Thus, v-commerce might offer a comparative advantage to more conventional shopping environments when it comes to post-purchase dissonance, especially if the environment offers a good deal of interactivity and dynamicity, and if the marketer is able to quell any fears or concerns about interactions within the virtual store. Finally, v-commerce could help to promote shopping among other retail channels. Customers may be more inclined to visit physical store locations, for example, or shop a brand’s offerings on websites and mobile. Thus, v-commerce should be considered as part of an omnichannel strategy rather than a standalone experience.

VR and Brand Loyalty Brand loyalty can be enhanced with VR due to the emotional connections that VR can help to foster beyond what brands ordinarily offer. This was illustrated in Chapter 9 as we discussed brand storytelling and the potential for VR to contribute to that domain. To augment that discussion, consider the potential for VR to keep the thread between a brand and its customers stronger than via other avenues. That is, in the absence of VR as part of the brand strategy, how is that thread maintained? Brands, of course, have traditionally maintained that thread through promotion. Advertisements, direct marketing, social media, and similar platforms have allowed brands and customers to

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stay in contact in between transactional touchpoints, which (of course) fostered long-term customer relationships. In a sense, these efforts “fill the gap” between direct customer-brand interactions. However, VR can take that “filling the gap” function to the next level, especially with platforms that are, by their nature, more continuous. For example, if your brand hosts or takes on an important role in a virtual world, your customers have a continuous means of interacting with your brand even outside of direct transactional situations. In that context, the brand becomes part of the customer’s life, both in the real world and the virtual world, in a way that other kinds of media or experiences cannot facilitate. Of course, if you do not have the resources or capabilities for a full-on virtual world, even simpler forms of VR (e.g., simulations or games) offer additional touchpoints that strengthen the thread of the customer-brand relationship over time. Either way, smart integration of VR into brand strategy can enhance brand loyalty via more intentional opportunities for customer-brand interaction. Further research also shows that when consumers use VR (vs. traditional media) to help them make a decision, they are more satisfied and report higher loyalty. For instance, when evaluating a hotel at a vacation destination, consumers can look at images of the room or could use 360 VR modes to consider what their future stay would be like. Studies show that using VR (vs. regular images) increased satisfaction after the actual stay at the hotel. Moreover, these consumers also indicated a higher intention to stay at the same hotel again.

VR and Brand Community Aside from our discussion of brand community within the context of co-creation (see Chapter 11), how can VR help to build brand community? Consider, once again, the case of virtual worlds and metaverses. Prior to VR, brand community was fostered in a variety of ways. Brand fans would (and still do) organize meet-ups or special events, for example, that could bring a brand’s most loyal customers together. Consider H.O.G. (Harley Owners Group) rallies. The brand – Harley-Davidson – is actively involved in these rallies, and there is a system of chapters for H.O.G. membership depending on where a customer lives. Many marketers may only be able to dream of the kind of brand loyalty that Harley-Davidson has been able to generate through the H.O.G. The brand is, of course, able to benefit from a high-involvement product with a strong lifestyle element, one that many people share as part of their subcultural identity. However, virtual worlds and metaverses have changed the game. Now, brands of all kinds can create exciting experiences for their customers, which can lead to unique potential for brand communities that might not have otherwise existed. Of course, these experiences may not replace other platforms for brand community, such as social media pages in which

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brand fans can interact, share information, and so forth, but VR does offer the chance for brands to take it to the next level. Further, meet-ups such as H.O.G. rallies have traditionally taken place in person, requiring travel and accommodations. By contrast, VR users can congregate in virtual spaces no matter where they are physically. Users can customize avatars and participate in events such as concerts and festivals. These new community experiences are limited only by technological capabilities and marketers’ imagination, rather than by physical boundaries. Thus, VR offers the potential for marketers to tap into massive segments of users who may have historically been excluded from brand community events due to travel-related constraints (e.g., they typically cannot get off work, arrange care for dependents, or have physical or financial difficulties around travel).

VR and Memory Memory is a key part of managing consumer relationships. Customers will remember (whether accurately or inaccurately) their interactions with brands, and over time, those memories fuel customer perceptions, intentions, and behaviors related to those brands. As the brands that are more memorable are more likely to remain in the evoked set (i.e., the set of brands that comes to mind when a consumer thinks of a product category or situation), it behooves marketers to create memorable experiences. How might this be achieved? While research in the area of VR and memory is scant, some initial evidence provides guidance on how to make VR function more effectively in terms of memory. For example, getting customers to think at a more abstract, high level (vs. a more concrete, low level) prior to the experience can make the experience more positive for them overall. The researchers found that among users who had visited the Eiffel Tower in the past, those who were in a more abstract mindset were better able to fondly remember that past travel while presently experiencing the Eiffel Tower in VR, which subsequently increased their intentions to visit the site in the future as well as their intentions to encourage others to do the same. Thus, marketers might be able to better connect to the customer journey if they can get customers to think more abstractly. Recall from Chapter 8 that memory can be semantic (stored as knowledge in the brain, much like information is held in an encyclopedia, dictionary, or thesaurus) or episodic (stored like pictures or recorded video of personal experiences). Emerging evidence on VR experiences within the context of tourism indicates that VR can help create long-lasting semantic memories, which appear to strengthen over time, and that VR can assist in building episodic memories among customers without prior brand experience. In this way, VR can help to create experience-fueled memories among users who have not otherwise experienced the brand, helping to fill a key gap in customers’ “recorded information” about the brand. However, recent findings also

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indicate that episodic memory formation interferes with semantic memory formation and that the formation of episodic memories may lead to greater error in recall later. Additionally, scientists also found that semantic memory confidence was a key driver of intentions to visit the given site. However, while semantic memory was found to be robust to inaccuracy over time, users’ confidence in that memory waned. Thus, marketers should plan for brand interactions after the experience to maintain consumer confidence in semantic memory, which appears to be key toward connecting the experience to future customer-brand interactions. Thus, while episodic memory is beneficial in some cases, especially among users who have not interacted with the brand before, it appears that marketers may realize more benefits by focusing on the creation and reinforcement of semantic memory. Marketers should be cognizant of how VR can influence memory and affect post-VR interactions.

Integrating VR into CRM Clearly, VR carries positive and far-reaching implications for CRM, and your brand can create a lot of excitement and engagement in unique ways by integrating VR into its strategy. However, as with other components of marketing or brand strategies, VR should not be incorporated in willy-nilly fashion. Rather, when planning for VR as part of CRM, consider the following questions: –

Which of your customers are more apt to become long-term patrons of your brand? This question might seem obvious on the surface. If your target market is composed mainly of consumers who are potentially averse to the latest technology, then you might think VR would not be a good choice. Meanwhile, if your target market is techsavvy, you might think VR would be a great way to engage them in unique ways. However, consider factors beyond mere “tech-savviness.” For example, many brands are on a constantly evolving quest to connect with customers who, while part of the target market, are geographically removed from physical brand artifacts (e.g., brick-and-mortar stores) and transactional capabilities. While brands can aim to reach those customers via e-commerce – encouraging them to shop online when they cannot physically access a store location – the physical and psychological (!) distance of online shopping can impose a rather formidable barrier to keeping the brand in those customers’ evoked sets. Here is where the possibilities of VR can help: if a customer makes a purchase and loves the brand but lives far away from the brand’s store locations, shopping or brand interaction in VR environments as opposed to the more conventional e-commerce can increase the appeal of long-term long-distance patronage.

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–

What are the opportunities for the brand community to contribute to long-term customer-brand relationships? In this chapter, we discussed the role that the brand community plays in VR. However, before you create a massive virtual universe with all kinds of events or interactions planned for your customers, consider the ways in which your customers use your brand, and think about commonalities among your target consumers that could unite them in relation to the brand. Some brands have strong fandoms or potential for community by their nature. Nintendo, for example, has created several franchises that resonate with gamers all over the world (e.g., Super Mario, the Legend of Zelda). A virtual world might create a natural draw for users to come together in a way that would be unique to these franchises. This, in turn, could create additional opportunities to game together, exchange fan theories, shop merchandise, and otherwise contribute to the overall brand community. Other brands built on the purpose of entertainment would likely find success with virtual worlds, especially among brands that already have a strong and lasting sense of community (e.g., Disney). Meanwhile, for other kinds of brands, social connection might be difficult to achieve, especially for products of a more personal nature or for products with purely functional and/or mundane purposes. Thus, on the surface, virtual worlds built around a single brand or its products may not do much to directly foster brand community. However, marketers in those cases should not totally dismiss the possibility of virtual worlds, especially if they are able to collaborate with the creator of a virtual world to integrate their brands into those worlds in natural and compelling ways. Brands may also consider sponsorships within virtual worlds, which might include activities such as sponsoring virtual events or having booths at virtual festivals. These actions can still help to build community, even in a more indirect sense, and potentially get customers to think about brands in different ways over a longer period. – How do you plan to connect your VR experience(s) to the broader customer journey? With the excitement, novelty, and potential of VR, it is easy to become too focused on creating a single compelling experience without considering how the customer will enter the experience and where the customer will go once the experience concludes. Think how the VR experience you are planning can be best integrated into the customer’s overall relationship with your brand. After the experience, is there an opportunity for the customer to interact with your brand directly in the real world? If the experience is run in the store, how do you plan to keep customers connected to the brand after the experience is over? In broader retail spaces, such as large stores or shopping centers, you might have a product display or a pop-up store next to the VR experience. If your experience is more remote – say, available to be completed at home using a headset – then you might consider connecting the experience to an online store or to a brand community page. Either way, you should encourage customers to talk about the experience online, which can help to generate buzz around the

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experience as well as your brand, and foster longer-term conversations among you and your customers. You should also consider the implications of VR for memory, as described above, since memory plays a major role in the customer journey. Given the evidence that an abstract mindset can lead to more positive outcomes in both short and long terms, you can use this to your advantage to tap into customers’ past experiences with your brand in addition to facilitating future interactions. Much prior research has investigated ways of getting customers into an abstract mindset, which can include certain kinds of messaging (i.e., focusing on the bigger picture) or altering psychological distance. Customers themselves might be more prone to think abstractly versus concretely as a general trait, which may stem from factors such as motivation to achieve goals and dreams (a so-called promotion focus) or, on the opposite end, motivation to safeguard against risk (a prevention focus); education (i.e., more education tends to lead to broader, more abstract mindsets), and age (i.e., older customers may be more likely to think abstractly than younger customers). Thus, through knowing your customers and using messaging strategically, you can anticipate customer mindsets and possibly shift some customers into a more abstract mindset, even if temporarily. However, as discussed in this chapter, memory is not dynamic. Thus, consider how VR might affect your customers’ semantic and episodic memories and what those effects mean for future interactions. Given that episodic memories come with experience and that VR can offer a suitable substitute for real-world direct experiences with brands, a focus on episodic memory can help draw in potential new customers. On the other hand, among current or past customers – especially those with a lot of prior brand experience – a focus on semantic memory may be more effective. You should also plan to have follow-up interactions after VR experiences to maintain customer confidence in their semantic memory as that confidence level appears to be key in fueling continued intentions to interact with the brand. Expert Opinion 14 João Rodrigues – Executive Director for Cyango, Lisbon, Portugal VR is the gateway to new digital worlds and applications where customers can have magnificent ‘wow’ experiences. At Cyango, we ensure that VR content delivers value to the clients and ultimately the customers that take part in the VR experiences. By using 360-degree virtual content, businesses can tap into the power of immersive technology and stand out from their competitors. Virtual tours are an excellent and complete example of delivering storytelling experiences that help businesses improve brand awareness, sales, and customer relationship management. When clients build virtual experiences with interactions and complement these visual elements with exciting storytelling, then the potential to sell or generate leads increases drastically. Developing these VR experiences can automatically build a brand’s awareness and salience by creating and delivering valuable content using immersive experiences. Since virtual experiences can also be connected to e-commerce services, the possibilities for VR to manage customer relationships are endless. These VR experiences can drive purchases more quickly than ever before. While there is still much progress to be made, it’s already possible to have a seamless shopping experience within the VR environment.

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In particular, storytelling Virtual Tours are a fantastic tool to convert a lead to purchase while the user is engaged in the experience and can see the product or service before buying it. In other words, this is a way to visualize the product or service more easily. Within the VR experience, customers can hover over objects or icons that allow them to purchase these objects or an experience within the VR content itself. As a result, customers are able to make more informed choice and more purchase decisions than merely shopping online and evaluating products or services from imagery and descriptions. For clients, Cyango is an easy-to-use creative tool where firms can manage customer relationships using VR. When starting the company, we wanted to make the process of creating VR experiences easier. That’s true today where the process of creating VR content for firms is simple. With content, Cyango’s editing software is very affordable, as we believe in democratizing access to tools that help build virtual experiences without the need to write any type of code. Clients can create multiple scene types like video panoramas and livestreaming, or merely create 3D environments to show objects or spaces. For example, these environments can be spaces like an art gallery, or provide a space for visualizing objects more clearly, like a 3D model of a product. Integrating multiple 3D objects can also be any easy way to re-create historic places that don’t exist anymore. Users would be able to navigate these historic places as if they did exist. In the editing process, clients can insert hotspots with detailed information that users can click on. They can also embed webpages in 3D environments, such as vcommerce channels, or even animations to grab users’ attention, and so much more.

Chapter 14 Checklist –

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– – –

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VR offers many benefits beyond the experience, including the potential for greater brand loyalty, WOM, repatronage, and brand community in addition to potentially lower negative post-interaction processes (e.g., buyer’s remorse). VR can create greater CLV through enhanced CRM potential – in other words, VR can keep customers coming back more frequently, which improves efficiency and profitability. VR adds to omnichannel strategy potential: v-commerce is a unique way of getting customers to keep shopping your brand’s offerings, whether those future transactions take place in virtual stores or in other retail channels. The emotional connections that VR can foster can build both brand loyalty and brand community. VR can affect customer memory (semantic and episodic) in different ways depending on customers’ prior brand experiences. VR experiences that contribute to semantic memory (especially among current customers) may lead to longer-lasting accurate memories, which can bolster behavioral intentions when customers remain confident in those memories. VR experiences can create episodic memories among users who have not otherwise experienced the brand, which offers the potential for new customer capture (although episodic memory is more prone to recall error).

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References Bruneau, V., Swaen, V., & Zidda, P. (2018). Are loyalty program members really engaged? Measuring customer engagement with loyalty programs. Journal of Business Research, 91, 144–158. Corkery, M., & Silver-Greenberg, J. (2017). Profits from store-branded credit cards hide depth of retailers’ troubles. Last accessed July 12, 2022, from https://www.nytimes.com/2017/05/11/business/dealbook/ retailer-credit-cards-macys-losses.html Deng, X., Unnava, H. R., & Lee, H. (2019). “Too true to be good?” when virtual reality decreases interest in actual reality. Journal of Business Research, 100, 561–570. Harley-Davidson. (2022). H.O.G. rallies and events. Last accessed July 21, 2022, from https://www.harleydavidson.com/us/en/content/hog/rallies.html Javornik, A., Papagiannidis, S., Cowan, K., & Alamanos, E. “We will always have Paris”: The impact of construal level on enjoyment, behavioral intentions and memory of past travel in virtual reality. Working paper. Kostyk, A., Dessart, L., & Cowan, K. Consumer memories of VR brand experiences. Working paper. Liao, T. (2017). Online shopping post-payment dissonance: Dissonance reduction strategy using online consumer social experiences. International Journal of Information Management, 37(6), 520–538. McLean, G., & Barhorst, J. B. (2021). Living the experience before you go . . . but did it meet expectations? The role of virtual reality during hotel bookings. Journal of Travel Research, 61(6), 1233–1251. Shen, J., Wang, Y., Chen, C., Nelson, M. R., & Yao, M. Z. (2020). Using virtual reality to promote the university brand: When do telepresence and system immersion matter? Journal of Marketing Communications, 26(4), 362–393. Zeng, G., Cao, X., Lin, Z., & Xiao, S. H. (2020). When online reviews meet virtual reality: Effects on consumer hotel booking. Annals of Tourism Research, 81, 102860.

Conclusion Industry investments in VR are growing annually, and many brands are launching their own VR initiatives – to try, if nothing else, to capitalize on the growing buzz. In some instances, entire establishments are built around VR experiences. For example, Dreamscape is a highly-rated VR center in Dallas, Texas, that offers a variety of fully immersive virtual experiences as a means of entertainment. Similar venues have arisen in many cities internationally and really help to showcase the “wow” factor of VR. Yet, managers might be hesitant to spend their resources on VR – after all, could it all be just about buzz and gimmicks? Is it necessary to extend marketing efforts into the virtual realm? This book was set to showcase that VR can – and should! – be used strategically to aid in brands’ marketing efforts. Whether one is set out to improve customer attitudes, grow engagement, or tell their brand’s story, VR offers practical solutions to these objectives. It can be incorporated in marketing events (and some events can be entirely shifted to VR), and used as a viable retail channel in the context of vcommerce. Understanding target consumers well – and this book offers ample tools and suggestions for such consumer research – can help marketers to design optimal VR experiences, and seamlessly incorporate them into consumers’ journey. Ultimately, VR is here to stay, and forward-thinking managers are capitalizing on everything that it has to offer. As new developments improve technology affordances, marketers will be able to increasingly achieve more in virtual reality. While at the beginning of this book we assured the reader that VR marketing can be successfully realized without breaking the bank, and the most advanced VR solutions are not always necessary for achieving marketing objectives, it is worth noting that accessibility of VR solutions is increasing. For example, VR headsets for personal use are becoming more affordable, and new solutions are developed to overcome the originally-ableist nature of VR and make it suitable for wider audiences. As this trend continues, the possibilities for creative marketers will be growing. What is next? Perhaps one day our customers will be primarily shopping from the comforts of their own homes, with VR brand ambassadors assisting them along the way. Perhaps most sales pitches will shift in the bright rooms of virtual offices, where the sun is always shining through the windows onto the walls decorated with the latest NFT art. Not only skipping a drive to a business meeting or a shopping mall would be better for the planet, but it might also make interactions between consumers and brands more authentic, personal, customizable, and empowering.

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Expert Opinion 15 John Mould – Commercial Development Manager, ST Engineering Antycip, London, UK Virtual environment technologies are constantly evolving. Currently the metaverse is taking shape and drawing organizations and private individuals to explore the possibilities of socializing, shopping, and conducting business over this new medium. The metaverse will change the way we engage in the years to come. VR headsets (HMDs) are taking advantage of the latest developments, offering a multitude of costeffective models that can be used for home gaming purposes and professional level solutions. These solutions step up the fidelity and resolution of the virtual environments. Some of the new features found in those headsets include so-called bionic displays: high resolution display panels positioned before each eye. Occupying the primary field of view, “bionic displays” can replace the more pixelated devices of the past, while secondary lower resolution panels take care of the wider field of vision. This innovation allows for defining detail and including finer text within the virtual environment. Ultimately, it will deliver more convincing video and computer-generated visual content. Furthermore, such headsets take user interaction to the next level by incorporating optical tracking that captures the movements of users’ real hands (as opposed to the hand-held controllers). These trackers recognize the orientation and all the various joints upon users’ fingers, translating hand gestures to initiate interactions such as controlling menus in a VR environment or manipulating an object. In the realm of projection-based VR technologies, one of the greatest leaps forward comes in the form of projectors that can operate at 360Hz. The display device can deliver its video content from up to three separate sources that are connected simultaneously. This “multiview” capability enables the audience to wear 3D glasses that can be synchronized to receive one of the video sources while filtering out the other two. Separating left and right eye images results in an impressive crisp high-resolution 3D visual. Imagine walking into a museum and picking up a pair of 3D glasses to complement your visit. You could traverse through the virtual streets of London re-created as they appeared in the past, but another visitor standing nearby and looking at the same display could see the London of the future instead. Both of you can explore the virtual worlds using the same hardware, but each having a different reality presented and a unique experience that is specifically tailored to your personal preferences. This is how we cooperate in the real word as we walk around an object and decide how we view it. The power of this technology is the ability to collaborate and to share the same virtual world with others, but more importantly to enable a sense of presence by allowing user control and customization. The benefits do not end here. Audiences could have various tailored content delivered to their eyes, for example, personalized subtitles in different languages. Unlike wearing a VR headset that may isolate our facial expressions and natural body language, viewers can use lightweight active 3D glasses to gauge the reactions of others as they communicate and share. In the past, one of the limitations of exploring a virtual environment has been the restriction of physical space. For example, in a VR CAVE a user could move around a limited amount before coming into contact with the display screen surfaces. Following popular Hollywood movies like Ready Player One, omni-directional treadmills can combine with a visual display allowing the freedom to explore VR environments with fewer space limitations. These new platforms understand where the user is positioned upon their surface and anticipate when the user moves and when to slow down to provide a more realistic and natural motion. Multiple omnidirectional treadmills can be connected to enable, for instance, a group of tourists to take walks in exotic or fictional locations together. In summary the above innovations and technologies offer just a snapshot in time of what is emerging and how it enhances our capabilities today and into the future. I can envision our future houses featuring full walls covered in the next generation of direct view LED tiles that will enable us to “see” into a virtual environment. We can choose a photorealistic tranquil video view of a beach or a forest,

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and then we will be able to gesture and take control of these displays to use them for home entertainment, home automation, gaming, and video chats. We can decide what data we present to our eyes and then other family members will be able to take control tailoring a multiview capability to deliver their chosen content upon the same display simultaneously, and avoiding the challenges of who gets to dominate what content is streamed to our houses.

Appendix Examples of VR production specifications

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Appendix

List of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10

VR Head-Mounted Display 6 Smartphone Viewers for VR 6 Under Armour “ice gym” CAVE 7 Immersion Framework for Influencing Consumer Persuasion Information Hotspots in VR 26 Developing VR Production Specifications 32 Cowan and Ketron’s (2019) Dual Model of Involvement for VR The Four Values of Engagement 73 A Spectrum of Realism to Fantasy in VR 94 Poster with VR Instructions 132

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List of Tables Table 1 Table 2 Table 3 Table 4 Table 5

Survey Questions for Testing Flow in Virtual Environments 20 Technology Readiness Consumer Survey 52 Forms of VR Based on Dynamicity and Interactivity 70 Hierarchies of Attitude Components 80 Questionnaire Items for Assessing Verbalizer/Visualizer Disposition

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Index adaptive gamification 131 advanced VR 8–9, 50 affect-behavior-belief sequence 80–82 Alzayat, A. 101, 103 anthropomorphic object 95 attitudes – affect-behavior-belief sequence 80–82 – affect, enhancing 85 – behavior-belief-affect sequence 81 – belief-affect-behavior sequence 80, 82 – belief-behavior-affect sequence 80, 82 – beliefs, changing 84–85 – components 79–81 – definition 79 – enhancement with VR 84–85 – flow and immersion 85 – information processing and 83–84 – Martir opinion on 86 – memory systems and 81–83 audio. See sounds auditory cues 38, 42 augmented reality (AR) 5 authenticity 14, 27–28, 38, 74, 120 autotelic touch 37 “avant garde” layout 104 avatars 16, 18–19, 29, 60, 70, 72, 85, 89, 92–93, 95–96, 102, 105, 113–114, 121, 140 behavioral value 70, 73, 75 behavior-belief-affect sequence 80–81 belief-affect-behavior sequence 80, 82 belief-behavior-affect sequence 80, 82 bionic displays 147 brand attitudes. See attitudes brand communities 93, 111, 114, 139–140, 142 brand identity 62, 75, 104 brand loyalty 8, 74, 138–139 brand meaning 112–113 brand storytelling. See storytelling, brand brick-and-mortar retail 90, 100, 138, 141 buyer’s remorse 138 call to action (CTA) 128 Carpenter, M. 106 cause-related VR experiences 91–92

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Cave Automatic Virtual Environments (CAVEs) 7–9, 16–17, 21, 41, 74, 76, 97, 131, 147 central route (customer involvement) 58 chunks 81 clutter 81 CLV. See customer lifetime value (CLV) co-creation 33, 59, 71, 81, 92, 109–114, 139 – aims 113–114 – brand communities and 111, 114 – brand meaning 112–113 – co-presence/social presence 111, 114 – from customer-brand interactions 112–114 – deeper engagement with consumers 113 – definition 59, 109 – fantasy VR and 112 – Kastenholz opinion on 114 – in marketing 109 – motivation for 111 – service-dominant logic and 109–110 cognitive depletion 61 cognitive involvement 15, 17, 70 cognitive processing 83 computer-generated virtual environment 24–25, 30–31 consumer engagement. See engagement, VR content, VR. See VR content co-presence 16, 21, 111 COVID-19 pandemic 14, 16, 19, 106 Cregan-Evans, N. – consumer engagement 76 – immersion 21 – pre-VR 131 CRM. See customer relationship management (CRM) customer-brand interactions 95, 112–114, 141 customer disengagement 76 customer involvement. See involvement, customer customer lifetime value (CLV) 136 customer relationship management (CRM) 1, 135–136, 141–143 customers’ VR readiness 1, 49–53 – adoption process 49 – device ownership 50–51 – Gilbert opinion on 53 – improvement of 52 – independent judgment making 50–51

156

Index

– technology readiness 49, 51–52 customization 18–19, 30, 60, 72, 113–114, 129–131, 147 Cyango 26, 143–144 cybersickness 9, 21, 137–138 degrees of freedom 5, 7–8, 33–34 dialogic engagement 69–70 digital floor sweeping 25 digital retail environments 100 direct experiences 82, 143 dual process theories 58–59 dynamicity 26, 70–76, 138 Elaboration Likelihood Model (ELM) 58 engagement, VR – behavioral value 70, 73, 75 – benefits of 74–75 – and brand identity/goals 75 – Cregan-Evans opinion on 76 – definition 69 – dialogic 69–70 – dynamicity 26, 70–76, 138 – enhancement 75–76 – experiential value 70, 73–75 – flow 71–75 – immersion 71–74 – interactivity 14, 59–60, 62, 70–73, 75–76, 138 – vs. other media engagement 71–73 – overview 69–70 – presence 71–74 – social value 70, 73–76 – utilitarian value 70, 73–74, 101 episodic memory 82–83, 140–141, 143 eWOM 137 experiential value 70, 73 Facebook ads 127–128 fantasy VR 89, 92–96, 112 – brand storytelling via 93 – vs. realistic VR 94–96 field of view 5–7, 13, 147 first-person 29, 91, 93, 127 Fisher, D. 88 flow 17 – avatars and 18–19 – and engagement 71–75 – immersion and 17–18, 20, 85 – sensory inputs for generation of 40, 42

gamification 25, 95, 120, 131 Gap, Inc. 88 Gilbert, R. 53 Graphic Assets 24 graphics 24 – computer-generated virtual environment 24–25, 30–31 – illusions 28–29 – image quality 27 – real world footage filming 24–26, 31 grocery shoppers 104 head-mounted display (HMD) 1, 5–6, 9, 13–16, 26, 41, 71, 113, 119, 131, 147 hearing sense 38, 43 hedonic brands 59, 62 hedonic products 101, 104 hedonic sensory cues 84 hedonic value 101 heuristic route (customer involvement) 58 heuristic-systematic model (HSM) 58 high definition/resolution image 27 high involvement, customer 57, 59–62, 80, 82, 111, 130, 139 HMD. See head-mounted display (HMD) home improvement store 104 HSM. See heuristic-systematic model (HSM) idealized avatars 18 Igloo 21, 76, 131 illusions 28–29 image quality 27 immersion 33, 60, 71–74, 76, 85, 112 – avatars and 18–19 – Cregan-Evans opinion on 21 – definition 13–14, 40 – enhancement 19 – environment 15 – features 13–14 – and flow 17–18, 20, 85 – framework 19–21 – outcomes of 15–16 – vs. presence 16–18 – sensory inputs for generation of 40, 42 impulse buying 81 influencer 127 information asymmetry 90, 94 information hotspots 26 information processing 81–82

Index

– and attitudes formation 83–84 innovativeness 49, 51 instrumental touch 37, 103 interactive control features 7 interactive holograms 92 interactivity 14, 59–60, 62, 70–73, 75–76, 138 involvement, customer – brand identity and 62 – competition and 63 – definition 55 – dual process theories 58–59 – high involvement 57, 59–62, 80, 82, 111, 130, 139 – level of involvement 58–59, 61, 129–130 – low involvement 59–60, 62, 80, 82, 130 – Martir opinion on 63–64 – offering and 61 – overview 55–56 – product involvement 56–57 – purchase involvement 57–58 – target customers 61–62 – types 56–58 – in VR 59–63 Kastenholz, C. 114 Krasonikolakis, I. 104 lateral exchange markets 103 Lee, S. H. M. 101, 103 long-term memory 82 low definition/resolution image 27 low involvement 59–60, 62, 80, 82, 130 Martir, T. – consumer attitudes 86 – customer involvement 63–64 – VR-based events 122 memory systems 81–83, 140–141, 143 Meta 1, 53 metaverses 1, 5, 18, 70–71, 85, 93, 99, 110, 112, 114, 139, 147 modality richness 129–130 modern retail 100 moods 79 Mould, J. – sensory elements 43 – VR technologies 9, 147–148 movement tracking 7 Murchie, A.

157

– storytelling 96–97 – VR content 33–34 narrative 30, 32–33 National Geographic VR experience 83 need recognition 99 networked economy 103 nodes 82 non-360 VR 127–128 non-VR elements 120–121 online shopping 100 optimism 49, 51 OVR 39, 44 peripheral route (customer involvement) 58 persuasion 80, 83 Peukert, C. 101 place illusion 28 plausibility illusion 28 positive WOM 137 post-purchase dissonance 138 post-VR (customer relationship management) 61, 135–136 – brand communities 139–140, 142 – brand loyalty 138–139 – broader customer journey, VR to 142–143 – goal of 136 – memory systems 140–141 – repatronage in V-commerce 137–138 – Rodrigues opinion on 143–144 – VR integration into CRM 141–143 – word-of-mouth (WOM) 135–137 “pragmatic” layout 104 pragmatic needs 113 presence 25, 31, 33, 71–74 – co-presence 16, 111 – immersion vs. 16–18 – self-presence 16, 18 – social presence 16–18, 111, 114 – spatial presence 16, 59–60, 63 – telepresence 16 pre-VR (reaching customers) 127 – Cregan-Evans opinion on 131 – first-person capture 127 – non-360 VR 127–128 – tailoring VR for audiences 129–131 – 360 ads 127–128

158

Index

– using “samples,” 127–128 – using social media 127–128 – VR usage instructions 128–129, 132–133 product development 112 product diagnosticity 101 product involvement 56–57 projection-based VR technologies 147 promotion 122, 128, 137–138, 143 purchase involvement 57–58 realistic VR 89–91 – brand storytelling via 91–92 – vs. fantasy VR 94–96 real world footage 25–26, 31 refresh rates 29 REI 91 retail environments 100 return on investment (ROI) 8–9, 50 Rodrigues, J. 143–144 scent sense 37–39, 41–44 self-presence 16, 18 semantic memory 82–83, 140–141, 143 sensory cues 41–42, 84 sensory inputs/elements 39–40 – for immersion and flow generation 40, 42 – integration in VR 41–42 – technological requirements 40–41 sensory marketing – benefits of 38–39 – definition 36 – hearing 38, 43 – Mould opinion on 43 – overview 36–38 – scent 37–39, 41–44 – taste 38 – touch 37, 42–43 – visual 36, 39, 42 – Wisniewski opinion on 43–44 sensory mask 39, 41 sensory memory 81 service-dominant logic 109–110 short-term memory 81–82 simple audio 28 smell sense. See scent sense sociability 113–114 social interactions 100, 102–103, 121 social media 127–128 – eWOM 137

social presence 16–18, 111, 114 social value 70, 74 sounds 28, 31 – illusions 28–29 spatialized audio 28 spatial presence 16, 59–60, 63 spatial realism 28 stereoscopy 7–8 storytelling, brand 25, 32, 40, 42, 88–89, 135 – co-creation 91–92 – and customers’ imaginations 96 – and emotional connections 95 – functional experience 94–95 – importance 88–89 – information asymmetry and 94 – Murchie opinion on 96–97 – realistic VR vs. fantasy VR 94–96 – sensory marketing and 39 – shopping environment 102–103 – via fantasy VR 93 – via realistic VR 91–92 – virtual tours 143–144 Swarovski’s virtual atelier 74, 101 systematic route (customer involvement) 58 tailoring VR experiences 129–131 taste sense 38–39, 44 tech-savviness 141 telepresence 16, 21, 59, 129 temporal realism 29 temporary memory 81 third-person perspective 29 3D VR, 7–8, 33 360 ads, 127–128 360 VR, 14, 25, 34, 50, 71, 73, 84–85, 92, 110–111, 139, 143 touch sense 15, 36–37, 39, 42–43 two-pronged approach 90 update rates 29 usage instructions, VR 128–129, 132–133 utilitarian brands 60, 62 utilitarian value 70, 73–76, 101 V-commerce 99–106 – advantages 105 – applications 101–103

Index

– Buy+ 99 – C2C environments 103, 111 – Carpenter opinion on 106 – customers response to 103 – features 104 – hedonic value 101, 103 – immersive environments 102, 104 – implementation 104–105 – individual characteristics and 103 – vs. other retail environments 99–101 – vs. physical stores 103 – post-purchase 137 – product characteristics 101–102 – repatronage in 137–138 – social interactions 100, 102–103 – utilitarian value 101 – virtual stores and 101–102, 104–105 verbalizers 129–130 virtual advisors 18–19 Virtual Cocoon 39 Virtual Reality Accessibility Checks 53 virtual shop assistant 105 virtual shopping. See V-commerce virtual showroom 106 virtual stores 101–102, 104–105, 137–138. See also V-commerce virtual tours 143–144 virtual world 5–7, 14, 16, 18, 28, 30, 33, 39, 43–44, 50, 60, 70–72, 74, 85, 89, 93, 95, 99, 103, 110, 112–114, 139, 142, 147 visual content. See graphics visualizers 129–130 visual sense 36, 39, 42 VR 144 – advanced 9 – CAVEs. See Cave Automatic Virtual Environments (CAVEs) – degrees of freedom 5, 7–8, 33–34 – device ownership 50–51 – field of view 5–7, 13, 147 – hardware 9 – headsets 7, 16, 21, 33–34, 39–40, 50–51, 76, 85, 92, 99, 103, 111, 117–118, 120–121, 128–130, 147 – interactive control features 7 – marketing 8–9 – movement tracking 7 – overview 5–8 – production specifications 32, 149–150 – smartphone viewers for 5–6

159

– software 9–10 – stereoscopy 7–8 – “the best,” 8 – 3D VR 7–8, 33 VR180 34 VR-based events 117–122 – custom-made event 121 – designing 118–122 – features 120 – fully within VR 121–122 – head-mounted display (HMD) for 119 – Martir opinion on 122 – non-VR elements and 120–121 – objectives 118–119 – target audience 119 VR content 24 – accessibility 29–30, 53 – graphics 24–26 – in house and outsource 31–32 – illusions 28–29 – image quality 27 – integration 30–33 – Murchie opinion on 33–34 – narrative 30, 32–33 – sounds 28 VR experiences 15, 24, 32, 82–83, 85 – cause-related 91–92 – fantasy 89, 92–93, 112 – image quality 27 – and involvement 56 – off-site/on-site 41–42 – outsource 31–32 – post-VR (relationship management) 135–144 – pre-VR (reaching customers) 127–134 – realistic 89–91 – resources for 8 – sensory cue for 42 – sensory inputs in 39–40 – tactile sensations to 121 – using “samples” for 127–128 – VR platforms for 63 VR HMDs. See head-mounted display (HMD) Wisniewski, A. 43–44 word-of-mouth (WOM) 8, 59–60, 100, 102, 113, 119, 135–137 working memory 81–82 XR Access 53